SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
__________________________
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 1-11596
__________
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 58-1954497
(State or other jurisdiction (IRS Employer
of incorporation or organization Identification Number)
1940 N.W. 67th Place, Gainesville, FL 32653
(Address of principal executive offices) (Zip Code)
(352) 373-4200
(Registrant's telephone number)
N/A
____________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
______ ______
Indicate the number of shares outstanding of each of the
issuer's classes of Common Stock, as of the close of the latest
practical date.
Class Outstanding at August 13, 1999
_____ ________________________________
Common Stock, $.001 Par Value 20,362,702
_____________________________ __________
(excluding 988,000 shares
held as treasury stock)
_________________________
=================================================================
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PERMA-FIX ENVIRONMENTAL SERVICES, INC.
INDEX
Page No.
________
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1999 and December 31,
1998 . . . . . . . . . . . . . . . . 2
Consolidated Statements of Opera-
tions - Three Months and Six
Months Ended June 30, 1999
and 1998. . . . . . . . . . . . . . . 4
Consolidated Statements of Cash
Flows - Six Months Ended
June 30, 1999 and 1998. . . . . . . . 5
Consolidated Statements of Stock-
holders Equity - Six Months
Ended June 30, 1999 . . . . . . . . . 6
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . 19
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . 27
Item 2. Changes in Securities and Use
of Proceeds . . . . . . . . . . . . . . 27
Item 5. Other Information. . . . . . . . . . . . . 28
Item 6. Exhibits and Reports on Form 8-K . . . . . 31
</TABLE>
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PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
PART I, ITEM 1
The consolidated financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the Company believes the
disclosures which are made are adequate to make the information
presented not misleading. Further, the consolidated financial
statements reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to
present fairly the financial position and results of operations as
of and for the periods indicated.
It is suggested that these consolidated financial statements
be read in conjunction with the consolidated financial statements
and the notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998.
The results of operations for the six months ended June 30,
1999, are not necessarily indicative of results to be expected for
the fiscal year ending December 31, 1999.
1
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<TABLE>
<CAPTION>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
June 30,
1999 December 31,
(Amounts in Thousands, Except for Share Amounts) (Unaudited) 1998
_____________________________________________________________________________
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 482 $ 776
Restricted cash equivalents and investments 1,043 111
Accounts receivable, net of allowance for doubtful
accounts of $1,426 and $313, respectively 11,133 5,950
Inventories 160 145
Prepaid expenses 820 471
Other receivables 153 11
Assets of discontinued operations 498 489
_______ ______
Total current assets 14,289 7,953
Property and equipment:
Buildings and land 12,180 5,804
Equipment 10,860 8,606
Vehicles 1,459 941
Leasehold improvements 16 16
Office furniture and equipment 988 782
Construction in progress 2,325 1,592
_______ _______
27,828 17,741
Less accumulated depreciation (6,546) (5,836)
_______ _______
Net property and equipment 21,282 11,905
Intangibles and other assets:
Permits, net of accumulated amortization of
$1,248 and $1,088, respectively 9,883 3,661
Goodwill, net of accumulated amortization of
$852 and $751, respectively 7,507 4,698
Other assets 602 531
_______ _______
Total assets $ 53,563 $ 28,748
======= =======
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS, CONTINUED
June 30,
1999 December 31,
(Amounts in Thousands, Except for Share Amounts) (Unaudited) 1998
_____________________________________________________________________________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,661 $ 2,422
Accrued expenses 7,726 3,369
Revolving loan and term note facility 938 625
Current portion of long-term debt 1,280 302
Current liabilities of discontinued operations 719 863
_______ _______
Total current liabilities 15,324 7,581
Environmental accruals 4,744 520
Accrued closure costs 948 715
Long-term debt, less current portion 11,299 2,087
Long term liabilities of discontinued operations 1,433 1,892
_______ _______
Total long-term liabilities 18,424 5,214
Commitments and contingencies (see Note 5) - -
Stockholders' equity:
Preferred Stock, $.001 par value; 2,000,000 shares
authorized, 5,287 and 9,850 shares issued and
outstanding, respectively - -
Common Stock, $.001 par value; 50,000,000 shares
authorized, 21,246,442 and 13,215,093 shares
issued, including 988,000 and 943,000 shares
held as treasury stock, respectively 21 13
Redeemable warrants - 140
Additional paid-in capital 43,096 39,769
Accumulated deficit (21,440) (22,157)
_______ _______
21,677 17,765
Less Common Stock in treasury at cost; 988,000
and 943,000 shares issued and outstanding (1,862) (1,812)
_______ _______
Total stockholders' equity 19,815 15,953
_______ _______
Total liabilities and stockholders' equity $ 53,563 $ 28,748
======= =======
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(Amounts in Thousands, __________________ _________________
Except for Share Amounts) 1999 1998 1999 1998
______________________________________________________________________________
<S> <C> <C> <C> <C>
Net revenues $ 10,573 $ 7,678 $ 18,385 $ 14,226
Cost of goods sold 6,819 5,238 12,109 10,025
_______ _______ ________ _______
Gross profit 3,754 2,440 6,276 4,201
Selling, general and admini-
strative expenses 2,295 1,679 4,133 3,234
Depreciation and amortization 597 527 1,116 1,035
_______ ______ ________ ______
Income (loss) from
operations 862 234 1,027 (68)
Other income (expense):
Interest income 11 9 18 17
Interest expense (91) (142) (118) (269)
Other (6) 115 (20) 132
_______ _______ _______ ______
Net income (loss) 776 216 907 (188)
Preferred Stock dividends (73) (89) (190) (176)
_______ _______ _______ ______
Net income (loss) applicable
to Common Stock $ 703 $ 127 $ 717 $ (364)
======= ======= ======= ======
_____________________________________________________________
Net income (loss) per share
Basic $ .04 $ .01 $ .05 $ (.03)
====== ====== ====== ======
Fully diluted $ .04 $ .01 $ .05 $ (.03)
====== ====== ====== ======
Number of shares and Common Stock
equivalents used in computing net
income (loss) per share:
Basic 16,570 11,965 14,483 11,836
======= ======= ======== =======
Fully diluted 20,254 18,006 18,175 11,836
====== ====== ======== =======
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements
4
<PAGE>
<TABLE>
<CAPTION>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
(Amounts in Thousands, ___________________
Except for Share Amounts) 1999 1998
_____________________________________________________________________________
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) from continuing operations $ 907 $ (188)
Adjustments to reconcile net income (loss)
to cash provided by operations:
Depreciation and amortization 1,116 1,035
Provision for bad debt and other reserves 12 19
Loss on sale of plant, property and equipment 3 -
Changes in assets and liabilities, net of
effects from business acquisitions:
Accounts receivable (1,118) 136
Prepaid expenses, inventories and other assets (432) 930
Accounts payable and accrued expenses 84 (461)
______ _____
Net cash provided by continuing operations 572 1,471
Net cash used by discontinued operations (551) (417)
Cash flows from investing activities:
Purchases of property and equipment, net (895) (1,027)
Proceeds from sale of plant, property and
equipment 14 -
Change in restricted cash, net 82 (16)
Cash used for acquisition consideration (1,000) -
Net cash used for acquisition settlements (1,616) -
Net cash used by discontinued operations (40) -
______ ______
Net cash used in investing activities (3,455) (1,043)
Cash flows from financing activities:
Borrowings of revolving loan and term note
facility 3,279 262
Principal repayments on long-term debt (134) (113)
Purchase of treasury stock (50) -
Proceeds from issuance of stock 66 55
Net cash used by discontinued operations (17) (30)
_______ ______
Net cash provided by financing activities 3,144 174
Increase (decrease) in cash and cash equivalents (290) 185
Cash and cash equivalents at beginning of period
including discontinued operations of $0, and
$12, respectively 776 326
______ ______
Cash and cash equivalents at end of period,
including discontinued operations of $4,
and $3 respectively $ 486 $ 511
======= ======
___________________________________________________________________
Supplemental disclosure:
Interest and dividends paid $ 422 $ 351
Non cash investing and financing activities:
Issuance of Common Stock for services 15 218
Issuance of stock for payment of dividends 114 183
Long-term debt incurred for purchase of
property and equipment 221 330
Long-term debt incurred for acquisition 4,700 -
Issuance of stock for acquisition 3,000 -
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited, for the six months ended June 30, 1999)
Preferred Stock Common Stock
Amounts in Thousand, ____________________ ____________________
Except for Share Amounts) Shares Amount Shares Amount
________________________________________________________________________________
<S> <C> <C> <C> <C>
Balance at December 31, 1998 9,850 $ - 13,215,093 $ 13
Net income - - - -
Issuance of Common Stock for
Preferred Stock dividend - - 85,802 -
Issuance of Common Stock in
exchange for warrants - - 200,000 -
Issuance of Common stock for
acquisition - - 1,500,000 2
Issuance of stock for cash
and services - - 32,185 -
Conversion of Preferred Stock
to Common (4,563) - 6,119,135 6
Redemption of Common Stock
to Treasury Stock - - - -
Exercise of warrants - - 62,227 -
Option Exercise - - 32,000 -
Expiration of redeemable
warrants - - - -
______ ______ __________ ________
Balance at June 30, 1999 5,287 $ - 21,246,442 $ 21
====== ====== ========== ========
<PAGE>
Common
Additional Stock
Redeemable Paid-In Accumulated Held in
Warrants Capital Deficit Treasury
________________________________________________
<S> <C> <C> <C> <C>
$ 140 $ 39,769 $ (22,157) $ (1,812)
- - 717 -
- 114 - -
- - - -
- 2,998 - -
- 37 - -
- (6) - -
- - - (50)
- 11 - -
- 33 - -
(140) 140 - -
________ _________ __________ ________
$ - $ 43,096 $ (21,440) $ (1,862)
======== ========= ========== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
6
<PAGE>
<PAGE>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
Reference is made herein to the notes to consolidated
financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 1998.
1. Summary of Significant Accounting Policies
__________________________________________
Our accounting policies are as set forth in the notes to
consolidated financial statements referred to above.
The Company adopted Financial Accounting Standards Board
Statement No. 128, "Earnings per Share" ("SFAS No. 128") effective
December 31, 1997. SFAS No. 128 requires presentation of both
Basic Earnings per share ("Basic EPS") and Diluted Earnings per
share ("Diluted EPS"). Basic EPS is based on the weighted average
number of shares of Common Stock outstanding during the year.
Diluted EPS also includes the dilutive effect of common stock
equivalents or potential common shares. Potential common shares
include 1,333,597 in stock options, 6,225,351 in warrants and
3,129,772 shares underlying the Convertible Preferred Stock at the
minimum conversion price. Diluted loss per share for the six
months ended June 30, 1998, does not include Common Stock
equivalents as their effect would be anti-dilutive.
In June, 1998 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("FAS 133"). FAS 133
requires companies to recognize all derivative contracts as either assets
or liabilities in the balance sheet and to measure them at fair value.
FAS 133 is effective for periods beginning after June 15, 1999.
Historically, we have not entered into derivative contracts. Accordingly,
FAS 133 is not expected to affect our financial statements.
2. Discontinued Operations
_______________________
On January 27, 1997, an explosion and resulting tank fire
occurred at the PFM facility, a hazardous waste storage, processing
and blending facility, located in Memphis, Tennessee, which
resulted in damage to certain hazardous waste storage tanks located
on the facility and caused certain limited contamination at the
facility. Given the loss of both the existing line of business and
its related customer base, we reported the Memphis segment as a
discontinued operation, pursuant to Paragraph 13 of APB 30. The
fuel blending activities were discontinued on the date of the
incident, January 27, 1997.
The accrued environmental and closure costs related to PFM total
$1,943,000 as of June 30, 1999, a decrease of $558,000 from the
December 31, 1998, accrual balance. This reduction was principally a
result of the specific costs related to general closure and remedial
activities, including groundwater remediation, and agency and
investigative activities ($222,000), and the general operating losses,
including indirect labor, materials and supplies, incurred in conjunction
with the above actions ($336,000). The general operating losses do not
reflect management fees charged by the corporation, but does include
interest expense of $144,000 for the quarter ended June 30, 1999,
specifically identified to such operations, including that debt
specifically incurred under the Company's revolving and term loan
facility. The Company's revolving and term loan debt is recorded on a
consolidated basis and therefore, the revolving and term loan debt
specifically attributable to PFM is not recorded as liabilities of
discontinued operations. The remaining environmental and closure
liability represents the best estimate of the cost to complete the
groundwater remediation at the site of approximately $892,000, the costs
to complete the facility closure activities over the next five (5) to ten
(10) year period (including agency and investigative activities, and
future operating losses during such closure period) totaling
approximately $826,000, and the potential PRP liability of $225,000.
7
<PAGE>
3. Proposed Acquisition.
____________________
On May 27, 1999, (i) Perma-Fix Environmental Services, Inc.
(the "Company"), Chemical Conservation Corporation; a Florida
corporation ("Chemical Florida"); Chemical Conservation of Georgia,
Inc., a Georgia corporation ("Chemical Georgia"); The Thomas P.
Sullivan Living Trust, dated September 6, 1978 ("TPS Trust"); The
Ann L. Sullivan Living Trust, dated September 6, 1978 ("ALS
Trust"); Thomas P. Sullivan, an individual ("TPS"); and Ann L.
Sullivan, an individual, entered into a Stock Purchase Agreement
("Chem-Con Stock Purchase Agreement"), wherein the Company agreed
to purchase all of the outstanding capital stock of Chemical
Florida and Chemical Georgia from the ALS Trust pursuant to the
terms of the Chem-Con Stock Purchase Agreement, and (ii) the
Company, Chem-Met Services, Inc., a Michigan corporation
("Chem-Met"), the TPS Trust, the ALS Trust, TPS and ALS entered
into a Stock Purchase Agreement ("Chem-Met Stock Purchase
Agreement"), whereby the Company agreed to purchase all of the
outstanding capital stock of Chem-Met from the TPS Trust pursuant
to the terms of the Chem-Met Stock Purchase Agreement. The
Chem-Con Stock Purchase Agreement and the Chem-Met Stock Purchase
Agreement are collectively referred to as the "Stock Purchase
Agreements." Chemical Florida and Chemical Georgia are
collectively referred to as "Chem-Con." TPS and ALS are husband
and wife.
On May 27, 1999, the Stock Purchase Agreements and related
transaction documents ("Documents") were executed and placed into
escrow pending satisfaction of certain conditions precedent to
closing. On June 1, 1999, the conditions precedent to closing of
the Stock Purchase Agreement were completed, the Stock Purchase
Agreements were consummated and the Documents were released from
escrow.
Under the terms of the Stock Purchase Agreements, the purchase
price paid by the Company in connection with the Chem-Con/Chem-Met
acquisition was $8,700,000, consisting of (i) $1,000,000 in cash
paid at closing, (ii) three promissory notes ("Promissory Notes"),
in the aggregate amount of $4,700,000, to be paid in equal monthly
installments of principal and interest of approximately $90,000
over five years and having an interest rate of 5.5% for the first
three years and 7% for the remaining two years, with payment of
such Promissory Notes being guaranteed by Chem-Met under a
non-recourse guaranty, which non-recourse guaranty is secured by
certain real estate owned by Chem-Met, and (iii) $3,000,000 paid in
the form of 1,500,000 shares of Perma-Fix Common Stock, par value
$.001 per share ("Common Stock"), paid to the ALS Trust at closing;
however, if the ALS Trust owns any of such shares of Common Stock
at the end of eighteen (18) months from the June 1, 1999, closing
date (the "Guarantee Period") and the market value (as determined
below) per share of Common Stock at the end of the Guarantee Period
is less than $2.00 per share, the Company shall pay the ALS Trust,
within ten (10) business days after the end of the Guarantee
Period, an amount equal to the sum determined by multiplying the
number of shares of Common Stock issued to the ALS Trust under the
Stock Purchase Agreements that are still owned by the ALS Trust at
the end of the Guarantee Period by $2.00 less the market value (as
determined below) of such shares of Common Stock owned by the ALS
Trust at the end of the Guarantee Period, with such amount, if any,
payable by the Company to the ALS Trust, at the Company's option,
in cash or in Common Stock or a combination thereof.
Notwithstanding anything to the contrary, the aggregate number of
shares of Common Stock issued or issuable under the Stock Purchase
Agreements for any reason whatsoever shall not exceed eighteen
percent (18%) of the number of issued and outstanding shares of
Common Stock on the date immediately preceding the June 1, 1999,
closing date. The market value of each share of Common Stock at
the end of the Guarantee Period shall be determined based on the
average of the closing sale price per share of Common Stock as
reported on the NASDAQ SmallCap Market ("NASDAQ") for the five (5)
consecutive trading days ending with the trading day immediately
prior to the end of the Guarantee Period. Under the Company's loan
agreement, the Company may only pay any such amount due the ALS
Trust at the end of the Guarantee Period in Common Stock unless the
lender agrees that the Company may satisfy all or part of such in
cash.
The cash portion of the purchase price for Chem-Con and
Chem-Met was obtained through borrowing from the Company's primary
lender, Congress Financial Corporation (Florida) ("Congress"), as
described below. The Company anticipates that the Promissory Notes
will be paid with working capital generated from operations and/or
borrowing under the Company's revolving credit facility with
8
<PAGE>
Congress. In connection with the closing, using funds borrowed from
Congress, the Company paid an aggregate of approximately $3,843,000
to satisfy certain obligations of Chem-Met.
The acquisition was accounted for using the purchase method
effective June 1, 1999, and accordingly, the assets and liabilities
as of this date are included in the accompanying consolidated
financial statements. As of June 1, 1999, the Company has
performed a preliminary purchase price allocation based upon
information available as of this date. Accordingly, the purchase
price has been preliminarily allocated to the net assets acquired
and net liabilities assumed based on their estimated fair values.
Included in this preliminary allocation were acquired assets of
approximately $13,996,000 and assumed liabilities of approximately
$14,535,000, against total consideration of $8,700,000. This
preliminary allocation has resulted in goodwill and intangible
permits of $2,911,000 and $6,328,000, respectively. The goodwill
and intangible permits are being amortized on a straight line basis
over 20 years. The preliminary purchase price allocation is
subject to completing the valuation of certain assets, which have
not been finalized, and may or may not result in a change to the
estimated fair market values assigned. The results of the acquired
businesses have been included in the consolidated financial
statements since the date of acquisition. The audited combined net
revenues of Chem-Con for the fiscal year ended September 30, 1998,
were, in the aggregate, approximately $21.8 million.
We accrued for the estimated closure costs, determined
pursuant to RCRA guidelines, for the three regulated facilities
acquired. This accrual, recorded at $218,000, represents the
potential future liability to close and remediate such facilities,
should such a cessation of operations ever occur. We also
recognized long-term environmental accruals totaling $4,319,000.
This amount represents management's best estimate of the long-term
costs to remove contaminated soil and to undergo groundwater
remediation activities at two of the Chem-Con acquired facilities,
Valdosta, Georgia and Detroit, Michigan. Both facilities have
pursued remedial activities for the last five years with additional
studies forthcoming and potential groundwater restoration could
extend for a period of ten years. No insurance or third party
recovery was taken into account in determining our cost estimates
or reserve, nor do our cost estimates or reserve reflect any
discount for present value purposes.
At the date of acquisition, we also initiated the payoff of a
Small Business Administration (SBA) loan, in the full amount of
$971,000. Prior to the acquisition, as required by the SBA loan
agreement the previous owners had placed approximately $331,000 of
restricted cash into an SBA trust account. Pursuant to the
acquisition and terms of the SBA loan agreement, we placed the
remaining payoff amount ($640,000) into the SBA trust account,
thereby fully funding the loan repayment. The SBA loan repayment
process requires various filings and notifications which take
approximately sixty days, at which time funds are withdrawn from
the trust account. As of June 30, 1999, such funds were reflected
as restricted cash and the corresponding liability in accrued
expenses. The restricted cash was withdrawn and SBA loan repaid on
August 1, 1999.
The principal businesses of Chem-Con and Chem-Met are the
collection, treatment, and recycling of industrial and hazardous
waste, including waste oils, water and miscellaneous solid waste.
Chemical Florida operates a permitted treatment and storage
facility and transfer station that also serves as the base for a
private trucking fleet; Chemical Georgia treats hazardous waste and
recycles solvents and Chem-Met treats and stabilizes inorganic
wastes and maintains a government services division that is focused
principally on the Defense Revitalization and Marketing Services
market. The Company intends to continue using the Chem-Con and
Chem-Met facilities for substantially the same purposes as such
were being used prior to the acquisition by the Company.
The following unaudited pro forma information presents the
consolidated statement of operations of the company as if the
acquisition had taken place on January 1, 1998. Chem-Con and Chem-
Met were on a September 30 fiscal year-end and therefore, their
results for the year ended September 30, 1998, have been
9
<PAGE>
consolidated with our results for the year ended December 31, 1998.
Correspondingly, Chem-Con and Chem-Met's results for the six months
ended March 31, 1999 and 1998, have been consolidated with our
results for the six months ended June 30, 1999 (excluding the Chem-
Con results for June 1999 included therein) and 1998.
<TABLE>
<CAPTION>
Six Months Ended
Year Ended June 30,
(Amounts in thousands, December 31, ________________
except per share amounts) 1998 1999 1998
________________________________________________________________
<S> <C> <C> <C>
Net revenues $ 52,352 $27,036 $24,981
Net income (loss) applicable
to Common Stock (1,046) (5) 75
Net income (loss) per share (.08) - .01
Weighted average number of common
shares outstanding 13,528 15,983 13,336
</TABLE>
These unaudited pro forma results have been prepared for
comparative purposes only and include certain adjustments, such as
additional amortization expense as a result of goodwill and
intangible permits and increased interest expense on acquisition
related debt. They do not purport to be indicative of the results
of operations that actually would have resulted on the date
indicated, or which may result in the future.
<TABLE>
<CAPTION
4. Long-Term Debt
______________
Long-term debt consists of the following at June 30, 1999, and
December 31, 1998 (in thousands):
June 30,
1999 December 31,
(Unaudited) 1998
____________ ____________
<S> <C> <C>
Revolving loan facility dated January 15,
1998, as amended May 27, 1999, collater-
alized by eligible accounts receivable
subject to monthly borrowing base cal-
culation, variable interest paid
monthly at prime rate plus 1 3/4. $ 3,642 $ 97
Term loan agreement dated January 15, 1998,
as amended May 27, 1999, payable in
monthly principal installments of $78,
balance due in June 2002, variable
interest paid monthly at prime rate
plus 1 3/4. 3,672 1,927
Three promissory notes dated May 27, 1999,
payable in equal monthly installments
of principal and interest of $90 over
60 months, due June 2004, interest at
5.5% for first three years and 7%
for remaining two years. 4,700 -
Various capital lease and promissory note
obligations, payable 1999 to 2004,
interest at rates ranging from 7.5% to
13.0%. 1,503 990
_______ ________
13,517 3,014
Less current portion of revolving loan and
term note facility 938 625
Less current portion of long-term debt 1,280 302
_______ ________
$11,299 $ 2,087
======= ========
</TABLE>
On January 15, 1998, the Company, as parent and guarantor,
and all direct and indirect subsidiaries of the Company, as co-
borrowers and cross-guarantors, entered into a Loan and Security
Agreement ("Agreement") with Congress Financial Corporation
(Florida) as lender ("Congress"). The Agreement initially provided
for a term loan in the amount of $2,500,000, which required
principal repayments based on a four-year level principal
amortization over a term of 36 months, with monthly principal
payments of $52,000. Payments commenced on February 1, 1998, with
a final balloon payment in the amount of approximately $573,000 due
on January 14, 2001. The Agreement also provided for a revolving
loan facility in the amount of $4,500,000. At any point in time
the aggregate available borrowings under the facility are subject
to the maximum credit availability as determined through a monthly
borrowing base calculation, as updated for certain information on
a weekly basis, equal to 80% of eligible accounts receivable
10
<PAGE>
accounts of the Company as defined in the Agreement. The
termination date on the revolving loan facility was also the third
anniversary of the closing date. The Company incurred
approximately $230,000 in financing fees relative to the
solicitation and closing of this original loan agreement
(principally commitment, legal and closing fees) which are being
amortized over the term of the Agreement.
Pursuant to the Agreement, the term loan and revolving loan
both bear interest at a floating rate equal to the prime rate plus
1 3/4%. The loans also contain certain closing, management and
unused line fees payable throughout the term. The loans are
subject to a 3.0% prepayment fee in the first year, 1.5% in the
second and 1.0% in the third year of the original Agreement dated
January 15, 1998.
In connection with the acquisition of Chemical Conservation
Corporation, Chemical Conservation of Georgia and Chem-Met
Services, Inc. (" Chem-Con") on May 27, 1999, Congress, the
Company, and the Company's subsidiaries, including Chem-Con entered
into an Amendment and Joinder to Loan and Security Agreement (the
"Loan Amendment") dated May 27, 1999, pursuant to which the Loan
and Security Agreement ("Original Loan Agreement") among Congress,
the Company and the Company's subsidiaries was amended to provide,
among other things, (i) the credit line being increased from
$7,000,000 to $11,000,000, with the revolving line of credit
portion being determined as the maximum credit of $11,000,000, less
the term loan balance, with the exact amount that can be borrowed
under the revolving line of credit not to exceed eighty percent
(80%) of the Net Amount of Eligible Accounts (as defined in the
Original Loan Agreement) less certain reserves; (ii) the term loan
portion of the Original Loan Agreement being increased from its
current balance of approximately $1,600,000 to $3,750,000 and it
shall be subject to a four year amortization schedule payable over
three years at an interest rate of 1.75% over prime; (iii) the term
of the Original Loan Agreement, as amended, will be extended for
three years from the date of the acquisition, subject to earlier
termination pursuant to the terms of the Original Loan Agreement,
as amended; (iv) Chemical Florida, Chemical Georgia and Chem-Met
being added as co-borrowers under the Original Loan Agreement, as
amended; (v) the interest rate on the revolving line of credit will
continue at 1.75% over prime, with a rate adjustment to 1.5% if
1999 net income applicable to Common Stock of the Company is equal
to or greater than $1,500,000 for either fiscal year ended
December 31, 1999 or 2000; (vi) the monthly service fee shall
increase from $1,700 to $2,000; (vii) government receivables will
be limited to 20% of eligible accounts receivable; and (viii)
certain obligations of Chem-Met shall be paid at closing of the
acquisition of Chem-Con and Chem-Met. The Loan Amendment became
effective on June 1, 1999, when the Stock Purchase Agreements were
consummated. Payments under the term loan commenced on June 1,
1999, with monthly principal payments of approximately $78,000 and
a final balloon payment in the amount of $938,000 on June 1, 2002.
The Company incurred approximately $40,000 in additional financing
fees relating to the closing of this amendment, which is being
amortized over the remaining term of the agreement.
Under the terms of the Original Loan Agreement, as amended,
the Company has agreed to maintain an Adjusted Net Worth (as
defined in the Original Loan Agreement) of not less than $3,000,000
throughout the term of the Original Loan Agreement, as amended.
The Company has agreed that it will not pay any dividends on any
shares of capital stock of the Company, except that dividends may
be paid on the Company's shares of Preferred Stock outstanding as
of the date of the Loan Amendment (collectively, "Excepted
Preferred Stock") under the terms of the applicable Excepted
Preferred Stock and if and when declared by the Board of Directors
of the Company pursuant to Delaware General Corporation Law. As
security for the payment and performance of the Original Loan
Agreement, as amended, the Company and its subsidiaries (including
Chem-Con and Chem-Met) have granted a first security interest in
all accounts receivable, inventory, general intangibles, equipment
and certain of their other assets, as well as the mortgage on two
facilities owned by subsidiaries of the Company, and except for
certain real property owned by Chem-Met, for which a first security
interest is held by the TPS Trust and the ALS Trust as security for
Chem-Met's non-recourse guaranty of the payment of the Promissory
Notes. All other terms and conditions of the original loan remain
unchanged.
11
<PAGE>
As of June 30, 1999, borrowings under the revolving loan
agreement were approximately $3,642,000, an increase of $3,545,000
over the December 31, 1998, balance of $97,000. This increase
represents $2,799,000 funded pursuant to the Chem-Con acquisition
on June 1, 1999, and $746,000 for general working capital needs
which is typical during increased revenue periods. The balance
under the Congress term loan at June 30, 1999, was $3,672,000, an
increase of $1,745,000 over the December 31, 1998, balance of
$1,927,000. This increase represents $2,083,000 funded pursuant to
the Chem-Con acquisition on June 1, 1999, partially offset by
scheduled repayments of $338,000. We funded through the revolving
and term loan a total of $4,882,000 pursuant to the Chem-Con
acquisition excluding legal, professional and other closing fees,
of which $2,651,000 represented the repayment of certain debt
obligations, $1,192,000 represented payment of certain settlement
obligations and $1,000,000 of the cash consideration as paid to the
former owners of Chem-Con. As of June 30, 1999, the Company's
borrowing availability under the Congress credit facility, based on
its then outstanding eligible accounts receivable, was approximately
$3,062,000.
Pursuant to the terms of the Stock Purchase Agreements in
connection with the acquisition of Chem-Con, a portion of the
consideration was paid in the form of three promissory notes, in
the aggregate amount of $4,700,000 payable to the former owners of
the Company. The promissory notes are paid in equal monthly
installments of principal and interest of approximately $90,000
over five years with the first installment due on July 1, 1999, and
having an interest rate of 5.5% for the first three years and 7%
for the remaining two years. The current portion of the three
promissory notes total $846,000 at June 30, 1999. Payment of such
promissory notes are guaranteed by Chem-Met under a non-recourse
guaranty, which non-recourse guaranty is secured by certain real
estate owned by Chem-Met. See Note 3 for further discussion of the
above referenced acquisition.
As further discussed in Note 2, the long-term debt, other than
revolving and term loan debt, associated with the discontinued PFM
operation is excluded from the above and is recorded in the
Liabilities of Discontinued Operations total. The PFM debt
obligations total $11,000, all of which is current.
5. Commitments and Contingencies
_____________________________
Hazardous Waste
In connection with our waste management services, we handle
both hazardous and non-hazardous waste which we transport to our
own or other facilities for destruction or disposal. As a result
of disposing of hazardous substances, in the event any cleanup is
required, we could be a potentially responsible party for the costs
of the cleanup notwithstanding any absence of fault on our part.
Legal
In the normal course of conducting its business, we are
involved in various litigation. There has been no material changes
in legal proceedings from those disclosed previously in the
Company's Form 10-K for year ended December 31, 1998. We are not
a party to any litigation or governmental proceeding which our
management believes could result in any judgements or fines against
us that would have a material adverse affect on the Company's
financial position, liquidity or results of operations.
Permits
We are subject to various regulatory requirements, including
the procurement of requisite licenses and permits at our
facilities. These licenses and permits are subject to periodic
renewal without which our operations would be adversely affected.
We anticipate that, once a license or permit is issued with respect
to a facility, the license or permit will be renewed at the end of
its term if the facility's operations are in compliance with the
applicable regulatory requirements.
Accrued Closure Costs and Environmental Liabilities
We maintain closure cost funds to insure the proper
decommissioning of our RCRA facilities upon cessation of
operations. Additionally, in the course of owning and operating
12
<PAGE>
on-site treatment, storage and disposal facilities, we are subject
to corrective action proceedings to restore soil and/or groundwater
to its original state. These activities are governed by federal,
state and local regulations and we maintain the appropriate
accruals for restoration. We have recorded accrued liabilities for
estimated closure costs and identified environmental remediation
costs. See Note 3 for discussion of the accrued closure costs and
long-term environmental accruals recorded in conjunction with the
Chem-Con acquisition.
Insurance
We believe we maintain insurance coverage adequate for our
needs and which is similar to, or greater than, the coverage
maintained by other companies of our size in the industry. There
can be no assurances, however, that liabilities which may be
incurred by us will be covered by our insurance or that the dollar
amount of such liabilities which are covered will not exceed our
policy limits. Under our insurance contracts, we usually accept
self-insured retentions which we believe appropriate for our
specific business risks. We are required by EPA regulations to
carry environmental impairment liability insurance providing
coverage for damages on a claims-made basis in amounts of at least
$1 million per occurrence and $2 million per year in the aggregate.
To meet the requirements of customers, we have exceeded these
coverage amounts.
6. Business Segment Information
____________________________
Pursuant to FAS 131, we define an operating segment as:
* A business activity from which we may earn revenue and
incur expenses;
* Whose operating results are regularly reviewed by our
chief operating division maker to make decisions about
resources to be allocated to the segment and assess its
performance; and
* For which discrete financial information is available.
We have thirteen operating segments which are defined as each
separate facility or location that we operate. We clearly view
each facility as a separate segment and make decisions based on the
activity and profitability of that particular location. These
segments however, exclude the Corporate headquarters which does not
generate revenue and Perma-Fix of Memphis, Inc. which is reported
elsewhere as a discontinued operation. See Note 2 regarding
discontinued operations.
Pursuant to FAS 131 we have aggregated two or more operating
segments into two reportable segments to ease in the presentation
and understanding of our business. We used the following criteria
to aggregate our segments:
* The nature of our products and services;
* The nature of the production processes;
* The type or class of customer for our products and
services;
* The methods used to distribute our products or provide
our services; and
* The nature of the regulatory environment.
Our reportable segments are defined as follows:
The Waste Management Services segment, which provides on-and-
off site treatment, storage, processing and disposal of hazardous
and non-hazardous industrial and commercial, mixed waste, and
wastewater through our seven TSD facilities; Perma-Fix Treatment
Services, Inc., Perma-Fix of Dayton, Inc., Perma-Fix of Ft.
Lauderdale, Inc., Perma-Fix of Florida, Inc, Chem-Met Services,
Inc., Chem-Met Government Services, Chemical Conservation
Corporation and Chem-Con of Georgia, Inc. We provide through Perma-
Fix Inc. and Perma-Fix of New Mexico, Inc. on-site waste treatment
services to convert certain types of characteristic hazardous
wastes into non-hazardous waste. We also provide through
Reclamation Systems, Inc. and Industrial Waste Management, Inc. the
supply and management of non-hazardous and hazardous waste to be
used by cement plants as a substitute fuel or raw material source
and the resell of by-product materials generated at cement plants
for environmental applications.
13
<PAGE>
The Consulting Engineering Services segment provides environmental
engineering and regulatory compliance services through Schreiber, Yonley
& Associates, Inc. and Mintech, Inc. These engineering groups provide
oversight management of environmental restoration projects, air and soil
sampling and compliance and training activities, as well as, engineering
support as needed by our other segment.
<TABLE>
<CAPTION>
The table below shows certain financial information by business
segment for quarter ended June 30, 1999 and quarter ended June 30, 1998
and excludes the results of operations of the discontinued operations.
Segment Reporting Quarter Ended 06/30/99
Waste Segment
Services Engineering Total
________ ___________ ________
<S> <C> <C> <C>
Revenue from external customers $9,640 $993 $10,573
Intercompany revenues 1,190 98 1,288
Interest income 11 - 11
Interest expense 92 23 115
Depreciation and amortization 573 20 593
Segment profit (loss) 1,170 19 1,189
Segment assets(1) 49,735 2,119 51,854
Expenditures for segment assets 564 2 566
Consolidated
Corp(2) Memphis(3) Total
_______ __________ ___________
<S> <C> <C> <C>
$ - $ - $ 10,573
- - 1,288
- - 11
(24) - 91
4 - 597
(486) - 703
1,211 498 53,563
88 - 654
Segment Reporting Quarter Ended 06/30/98
Waste Segment
Services Engineering Total
________ ___________ ________
<S> <C> <C> <C>
Revenue from external customers $ 6,550 $1,128 $ 7,678
Intercompany revenues 75 109 184
Interest income 9 - 9
Interest expense 125 8 133
Depreciation and amortization 504 19 523
Segment profit (loss) 419 108 527
Segment assets(1) 24,104 2,410 26,514
Expenditures for segment assets 402 3 405
Consolidated
Corp(2) Memphis(3) Total
_______ __________ ___________
<S> <C> <C> <C>
$ - $ - $ 7,678
- - 184
- - 9
9 - 142
4 - 527
(400) - 127
3,961 459 30,934
- - 405
<FN>
(1) Segment assets have been adjusted for intercompany accounts to
reflect actual assets for each segment.
(2) Amounts reflect the activity for corporate headquarters.
(3) Amounts reflect the activity for Perma-Fix of Memphis, Inc.,
which is a discontinued operation, not included in the segment
information (See Note 2).
</FN>
</TABLE>
<TABLE>
<CAPTION>
The table below shows certain financial information by business
segment for the six months ended June 30, 1999 and the six months
ended June 30, 1998 and excludes the results of oeprations of the
discontinued operations.
Segment Reporting Six Months Ended 06/30/99
Waste Segment
Services Engineering Total
________ ___________ _______
<S> <C> <C> <C>
Revenue from external customers $16,241 $2,144 $18,385
Intercompany revenues 1,283 191 1,474
Interest income 16 - 16
Interest expense 133 43 176
Depreciation and amortization 1,067 40 1,107
Segment profit (loss) 1,440 96 1,536
Segment assets(1) 49,735 2,119 51,854
Expenditures for segment assets 1,009 15 1,024
Consolidated
Corp(2) Memphis(3) Total
_______ __________ ___________
<S> <C> <C> <C>
$ - $ - $ 18,385
- - 1,474
2 - 18
(58) - 118
9 - 1,116
(819) - 717
1,211 498 53,563
93 - 1,117
14
<PAGE>
Segment Reporting Six Months Ended 06/30/98
Waste Segment
Services Engineering Total
________ ___________ _________
<S> <C> <C> <C>
Revenue from external customers $12,047 $2,179 $14,226
Intercompany revenues 158 235 393
Interest income 17 - 17
Interest expense 225 27 252
Depreciation and amortization 986 41 1,027
Segment profit (loss) 292 88 380
Segment assets(1) 24,104 2,410 26,514
Expenditures for segment assets 1,353 4 1,357
Consolidated
Corp(2) Memphis(3) Total
_______ __________ ___________
<S> <C> <C> <C>
$ - $ - $ 14,226
- - 393
- - 17
17 - 269
8 - 1,035
(744) - (364)
3,961 459 30,934
- - 1,357
<FN>
(1) Segment assets have been adjusted for intercompany accounts to
reflect actual assets for each segment.
(2) Amounts reflect the activity for corporate headquarters.
(3) Amounts reflect the activity for Perma-Fix of Memphis, Inc.,
which is a discontinued operation, not included in the segment
information (See Note 2).
</FN>
</TABLE>
7. Stock
_____
On April 20, 1999, the Company and RBB Bank Aktiengesellschaft
("RBB Bank") entered into an agreement to restructure the Company's
Convertible Preferred Stock held by RBB Bank, which totaled
approximately $9.5 million. Under the restructuring the Company and
RBB Bank agreed to the following:
1. RBB Bank converted, pursuant to existing terms of the
Convertible Preferred Stock, $4.6 million of the Convertible
Preferred Stock into approximately 6.1 million shares of the
Company's Common Stock, which was completed in May 1999.
2. The Company was granted the right to purchase at a stated
value ($1,000 per share) $750,000 of the Convertible
Preferred Stock, which was subsequently purchased on July 15,
1999.
3. The terms of the balance of the Convertible Preferred Stock
(approximately $4.2 million) was changed, as follows:
a. Not subject to conversion for 12 months from the date of
the restructuring ("Lock-Up Period");
b. For one (1) year from the end of the Lock-Up Period, any
conversion of the Convertible Preferred Stock would be
subject to a minimum conversion price of $1.50 per share
of Common Stock; and
c. The Company will be granted the option to redeem the
shares of the Convertible Preferred Stock at 110% of the
stated value ($1,000 per share) for the first twelve
months from the date of restructuring and RBB Bank may
not convert such shares redeemed during such twelve month
period, and thereafter the Company has the option to
redeem the Convertible Preferred Stock at 120% of the
stated value ($1,000 per share) of the Convertible
Preferred Stock and upon notice of such redemption RBB
Bank will have the right to exercise its conversion
rights pursuant to the then current terms of the
Convertible Preferred Stock.
4. The Company is required to register with the Commission the
Common Stock issuable upon conversion of the Convertible
Preferred Stock by January 31, 2000. The Company agreed that
if a registration statement covering such Common Stock is not
declared effective by the Commission by January 31, 2000, the
Company agrees to pay to RBB Bank a penalty in an amount
equal to two percent (2%) of the product of (a) the number
of shares of such Convertible Preferred Stock then
outstanding times (b) $1,000, payable in cash. The Company
agreed that for each month thereafter which terminates
without such registration statement being declared effective
by the Commission before the end of the last day thereof, the
Company shall pay to RBB Bank a penalty in an amount equal
to two percent (2%) of the product of (a) the number of
shares of Convertible Preferred Stock then outstanding times
(b) $1,000, payable in cash.
5. The remaining terms of the Convertible Preferred Stock will
remain unchanged.
15
<PAGE>
The restructuring was accomplished through two exchange
agreements ("First Exchange Agreement" and "Second Exchange
Agreement") which are further described as follows:
First Exchange Agreement
On July 15, 1999, the Company and RBB Bank entered into (i) an
Exchange Agreement, dated July 15, 1999 ("Series 3 Exchange
Agreement"), pursuant to which the 1,769 outstanding shares of
Series 3 Preferred, all of which were held by RBB Bank, were
exchanged for an equal number of shares of newly created Series 11
Class K Convertible Preferred Stock par value $.001 per share
("Series 11 Preferred"); (ii) an Exchange Agreement, dated July 15,
1999 ("Series 8 Exchange Agreement"), pursuant to which the
outstanding shares of Series 8 Preferred, all of which were held by
RBB Bank, were exchanged for an equal number of shares of newly
created Series 12 Class L Convertible Preferred Stock, par value
$.001 per share ("Series 12 Preferred"); and (iii) an Exchange
Agreement, dated July 15, 1999 ("Series 10 Exchange Agreement"),
pursuant to which the outstanding shares of Series 10 Preferred
Stock, all of which were held by RBB Bank, were exchanged for an
equal number of shares of newly created Series 13 Class M
Convertible Preferred Stock, par value $.001 per share ("Series 13
Preferred").
The Series 8 Preferred was redeemable by the Company (a)
within four (4) years from June 9, 1997 at $1,300 per share when
the average of the closing bid price of the Common Stock for ten
(10) consecutive days is in excess of $4.00 per share as quoted on
the NASDAQ and (b) at $1,000 per share after four years from
June 9, 1997. The Company had to provide thirty (30) days notice
to the Series 8 Preferred holder prior to any date stipulated by
the Company for redemption and at such time, the Series 8 Preferred
holder has the option of converting the shares which are to be
redeemed.
Under the terms of the Series 12 Preferred, the Company is
permitted to redeem up to 300 shares of Series 12 Preferred for
$1,000 per share, or an aggregate of $300,000, provided that any
such redemption must occur within 120 days of issuance of the
Series 12 Preferred. On July 15, 1999, the Company redeemed 300
shares of Series 12 Preferred leaving 616 shares of Series 12
Preferred issued and outstanding.
The Series 10 was not redeemable by the Company. Under the
terms of the Series 13 Preferred, the Company is permitted to
redeem up to 450 shares of Series 13 Preferred for $1,000 per
share, or an aggregate of $450,000, provided that any such
redemption must occur within 120 days of issuance of the Series 13
Preferred. On July 15, 1999, the Company redeemed 450 shares of
Series 13 Preferred leaving 1,802 shares of Series 13 Preferred
issued and outstanding.
In addition to the different redemption terms for the Series
12 Preferred and the Series 13 Preferred described above, the
Series 11 Preferred, Series 12 Preferred and Series 13 Preferred
(collectively, the "Exchange Preferred") each contain provisions,
described hereafter, which are different from those provisions in
the Series 3 Preferred, Series 8 Preferred and Series 10 Preferred,
as applicable.
* RBB Bank may make no conversions of the Exchange
Preferred for 12 months from July 15, 1999.
* Each of the Exchange Preferred has a minimum conversion
price of $1.50 per share for a 24 month period from
July 15, 1999.
* For 12 months from July 15, 1999, the Company may redeem
at any time and from time to time any of the Exchange
Preferred held by RBB Bank at 110% of its "stated value"
of $1,000 per share. Thereafter, the Company may redeem
at any time and from time to time any of such Exchange
Preferred at 120% of its "stated value" of $1,000 per
share. After 12 months from July 15, 1999, upon any
notice of redemption, RBB shall have only 5 business days
to exercise its conversion rights regarding the redeemed
16
<PAGE>
shares. For 12 months from July 15, 1999, RBB Bank
cannot elect to convert shares of Exchange Preferred even
if the Company redeems such shares of Exchange Preferred.
Second Exchange Agreements
On August 3, 1999, the Company and RBB Bank entered into (i)
an Exchange Agreement, dated August 3, 1999 ("Series 11 Exchange
Agreement"), pursuant to which the 1,769 outstanding shares of
Series 11 Preferred, all of which were held by RBB Bank, were
exchanged for an equal number of shares of newly created Series 14
Class N Convertible Preferred Stock par value $.001 per share
("Series 14 Preferred"); (ii) an Exchange Agreement, dated August
3, 1999 ("Series 12 Exchange Agreement"), pursuant to which the 616
outstanding shares of Series 12 Preferred, all of which were held
by RBB Bank, were exchanged for an equal number of shares of newly
created Series 15 Class O Convertible Preferred Stock, par value
$.001 per share ("Series 15 Preferred"); and (iii) an Exchange
Agreement, dated August 3, 1999 ("Series 13 Exchange Agreement"),
pursuant to which the 1,802 outstanding shares of Series 13
Preferred Stock, all of which were held by RBB Bank, were exchanged
for an equal number of shares of newly created Series 16 Class P
Convertible Preferred Stock, par value $.001 per share ("Series 16
Preferred").
The exchanges of the Series 14 Preferred, Series 15 Preferred,
and Series 16 Preferred (collectively, the "Second Exchange
Preferred") to RBB Bank were made in private placements under
Section 4(2) and/or Section 3(a)(9) of the Securities Act. The
terms of each of the Second Exchange Preferred are substantially
identical to the particular Exchange Preferred for which each was
exchanged except that the July 15 dates as described above in
connection with the Exchange Preferred were changed to April 20.
Therefore, (i) RBB Bank may make no conversions of the Second
Exchange Preferred for 12 months from April 20, 1999; (ii) each of
the Second Exchange Preferred has a minimum conversion price of
$1.50 per share for a 24 month period from April 20, 1999; and
(iii) for 12 months from April 20, 1999, the Company may redeem at
any time and from time to time any of the Second Exchange Preferred
held by RBB Bank at 110% of its "stated value" of $1,000 per share.
Thereafter, the Company may redeem at any time and from time to
time any of such Second Exchange Preferred at 120% of its "stated
value" of $1,000 per share. After 12 months from April 20, 1999,
upon any notice of redemption, RBB shall have only 5 business days
to exercise its conversion rights regarding the redeemed shares.
During the 12 months after April 20, 1999, RBB Bank cannot elect to
convert shares of Second Exchange Preferred even if the Company
redeems such shares of Second Exchange Preferred.
During May 1999, the Company issued to RBB Bank
Aktiengesellschaft ("RBB Bank"), located in Graz, Austria, 6,119,135
shares in the aggregate of the Company's Common Stock relating to
conversion of certain series of the Company's Preferred Stock in
accordance with the terms of such Preferred Stock, summarized as
follows:
(i) During May 1999, the Company issued to RBB Bank
Aktiengesellschaft ("RBB Bank"), 3,090,563 shares of Common Stock
to reflect RBB Bank's conversion on April 20, 1999, of 2,231 shares
of the Company's Series 3 Class C Convertible Preferred Stock
("Series 3 Preferred") pursuant to the terms of the Series 3
Preferred. The issuance of the Common Stock was made in a private
placement pursuant to an exemption from registration under Section
4(2) and/or Section 3(a)9 of the Securities Act. As of the
conclusion of the described conversion, there were 1,769 shares of
Series 3 Preferred remaining outstanding, all of which were held by
RBB Bank.
(ii) During May 1999, the Company issued to RBB Bank 2,057,143
shares of Common Stock to reflect RBB Bank's conversion on
April 20, 1999, of 1,584 shares of the Company's Series 8 Class H
Convertible Preferred Stock ("Series 8 Preferred") pursuant to the
terms of the Series 8 Preferred. The issuance of the Common Stock
was made in a private placement pursuant to an exemption from
registration under Section 4(2) and/or Section 3(a)9 of the
Securities Act. As of the conclusion of the described conversion,
there were 916 shares of Series 8 Preferred remaining outstanding,
all of which were held by RBB Bank.
17
<PAGE>
(iii) During May 1999, the Company issued to RBB Bank 971,429
shares of Common Stock to reflect RBB Bank's conversion on
April 20, 1999, of 748 shares of the Company's Series 10 Class J
Convertible Preferred Stock ("Series 10 Preferred") pursuant to the
terms of the Series 10 Preferred. The issuance of the Common Stock
was made in a private placement pursuant to an exemption from
registration under Section 4(2) and/or Section 3(a)9 of the
Securities Act. As of the conclusion of the described conversion,
there were 2,252 shares of Series 10 Preferred remaining
outstanding, all of which were held by RBB Bank.
During May 1999, the Company issued certain shareholders of
Chem-Con, 1,500,000 shares of the Company's Common Stock relating
to the acquisition of Chem-Con. See Note 3 for further discussion
of the above referenced acquisition.
18
<PAGE>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART I, ITEM 2
Forward-Looking Statements
Certain statements contained within this report may be deemed
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (collectively, the
"Private Securities Litigation Reform Act of 1995"). All
statements in this report other than statements of historical fact
are forward-looking statements that are subject to known and
unknown risks, uncertainties and other factors which could cause
actual results and performance of the Company to differ materially
from such statements. The words "believe," "expect," "anticipate,"
"intend," "will," and similar expressions identify forward-looking
statements. Forward-looking statements contained herein relate to,
among other things, (i) ability to fund capital expenditures by a
combination of lease financing and/or internally generated funds,
(ii) the ability to integrate the Chem-Con companies in a cost
effective and efficient manner, (iii) anticipated financial
performance, (iv) ability to comply with the Company's general
working capital requirements, (v) ability to retain or receive
certain permits or patents, (vi) ability to be able to continue to
borrow under the Company's revolving line of credit, (vii) ability
to generate sufficient cash flow from operations to fund all costs
of operations and remediation of certain formerly leased property
in Dayton, Ohio, and the Company's facilities in Memphis,
Tennessee, Valdosta, Georgia, and Detroit, Michigan, (viii) ability
to remediate certain contaminated sites for projected amounts, (ix)
the government's acceptance of the Company's offer regarding
settlement of claims involving the WR Drum Site, and (x) all other
statements which are not statements of historical fact. While the
Company believes the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance such
expectations will prove to have been correct. There are a variety
of factors which could cause future outcomes to differ materially
from those described in this report, including, but not limited to,
(i) general economic conditions, (ii) material reduction in
revenues, (iii) inability to collect in a timely manner a material
amount of receivables, (iv) increased competitive pressures, (v)
the ability to maintain and obtain required permits and approvals
to conduct operations, (vi) the ability to develop new and existing
technologies in the conduct of operations, (vii) overcapacity in
the environmental industry, (viii) discovery of additional
contamination or expanded contamination at a certain Dayton, Ohio,
property formerly leased by the Company or the Company's facilities
at Memphis, Tennessee, Valdosta, Georgia and Detroit, Michigan,
which would result in a material increase in remediation
expenditures, (ix) determination that PFM is the source of
chlorinated compounds at the Allen Well Field, (x) changes in
federal, state and local laws and regulations, especially
environmental regulations, or in interpretation of such, (xi)
potential increases in equipment, maintenance, operating or labor
costs, (xii) management retention and development, (xiii) the
requirement to use internally generated funds for purposes not
presently anticipated, (xiv) inability to operate profitably, or if
unable to become profitable, the inability to secure additional
liquidity in the form of additional equity or debt. The Company
undertakes no obligations to update publicly any forward-looking
statement, whether as a result of new information, future events or
otherwise.
19
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<TABLE>
<CAPTION>
Results of Operations
The table below should be used when reviewing management's
discussion and analysis for the six months ended June 30, 1999 and
1998:
Three Months Ended
June 30
___________________________________
Consolidated 1999 % 1998 %
____________ ______ _____ ______ _____
<S> <C> <C> <C> <C>
Net Revenues $10,573 100.0 $7,678 100.0
Cost of Goods Sold 6,819 64.5 5,238 68.2
______ _____ ______ _____
Gross Profit 3,754 35.5 2,440 31.8
Selling, General &
Administrative 2,295 21.7 1,679 21.9
Depreciation/Amortization 597 5.6 527 6.9
______ _____ ______ _____
Income (Loss) from
Operations $ 862 8.2 $ 234 3.0
====== ===== ====== =====
Interest Expense $ (91) (0.9) $ (142) (1.8)
Preferred Stock Dividends (73) (0.7) (89) (1.1)
Six Months Ended
June 30
___________________________________
1999 % 1998 %
______ _____ ______ _____
<S> <C> <C> <C> <C>
$18,385 100.0 $14,226 100.0
12,109 65.9 10,025 70.4
______ _____ ______ _____
6,276 34.1 4,201 29.6
4,133 22.5 3,234 22.7
1,116 6.1 1,035 7.3
______ _____ ______ _____
$ 1,027 5.5 $ (68) (.4)
====== ===== ====== =====
$ (118) (0.6) $ (269) (1.9)
(190) (1.0) (176) (1.2)
</TABLE>
Summary - Three and Six Months Ended June 30, 1999 and 1998
___________________________________________________________
We provide services through two reportable operating segments.
The Waste Management Services segment is engaged in on-and off-site
treatment, storage, disposal and processing of a wide variety of
by-products and industrial and hazardous wastes. This segment
competes for materials and services with numerous regional and
national competitors to provide comprehensive and cost-effective
Waste Management Services to a wide variety of customers in the
Midwest, Southeast and Southwest regions of the country. We
operate and maintain facilities and businesses in the waste by-
product brokerage, on-site treatment and stabilization, and off-
site blending, treatment and disposal industries. Effective June 1,
1999, we acquired three additional facilities, with similar lines
of business as those currently operating within this waste
management services segment. The facilities acquired were Chemical
Conservation Corporation, Chemical Conservation of Georgia and
Chem-Met Services, Inc. (Chem-Con) which are further described in
Note 3 to Notes to Consolidated Financial Statements. Our
Consulting Engineering segment provides a wide variety of
environmental related consulting and engineering services to
industry and government. Through our wholly-owned subsidiaries in
Tulsa, Oklahoma and St. Louis, Missouri, the Consulting Engineering
segment provides oversight management of environmental restoration
projects, air and soil sampling, compliance reporting, surface and
subsurface water treatment design for removal of pollutants, and
various compliance and training activities.
Consolidated net revenues increased to $10,573,000 from
$7,678,000 for the quarter ended June 30, 1999, as compared to the
same quarter in 1998. This increase of $2,895,000 or 37.7% is
attributable to the Waste Management Services segment which
experienced an increase in revenues of $3,090,000, including
approximately $2,345,000 of additional revenue resulting from the
Chem-Con acquisition on June 1, 1999. This waste management
services increase for the quarter was partially offset by a
reduction in revenue of $195,000 from the consulting engineering
segment. Consolidated net revenues increased to $18,385,000 from
$14,226,000 for the six month period ended June 30, 1999. This
increase of $4,159,000 or 29.2% is again attributable to the waste
management services segment which experienced an increase in
revenues of $4,194,000, including the above reference Chem-Con
revenue for the month of June 1999. We recognized revenue growth
across all of the operating facilities, which were partially offset
by reductions in certain of the offsite/service related operations.
Cost of goods sold for the Company increased $1,581,000 or
30.2% for the quarter ended June 30, 1999, as compared to the
quarter ended June 30, 1998. This consolidated increase in cost of
20
<PAGE>
goods sold reflects principally the increased operating, disposal
and transportation costs, corresponding to the increased revenue of
37.7% as discussed above. The resulting gross profit for the
quarter ended June 30, 1999, increased $1,314,000 to $3,754,000,
which as a percentage of revenue is 35.5%, reflecting an increase
over the corresponding quarter in 1998 percentage of revenue of
31.8%. Cost of goods sold also increased $2,084,000 or 20.8% for
the six month period ended June 30, 1999, as compared to the six
month period ended June 30, 1998. As with the quarter, this
increase is a direct result of the increased revenue of 29.2%, as
discussed above. The resulting gross profit for the six months of
1999 increased $2,075,000 to $6,276,000, which as a percentage of
revenue is 34.1%, also reflecting an increase over the
corresponding six month period of 1998 percentage of revenue of
29.6%. This increase in gross margins for the quarter and six
month period ended June 30, 1999, occurred within both the waste
management and consulting services segments, and reflects the
improved pricing structures we have been able to achieve, along
with the continued focus on cost reductions.
Selling, general and administrative expenses increased
$616,000 or 36.7% for the quarter ended June 30, 1999, as compared
to the quarter ended June 30, 1998. However, as a percentage of
revenue, selling, general and administrative expense decreased to
21.7% for the quarter ended June 30, 1999, compared to 21.9% for
the same period in 1998. Selling, general and administrative
expenses also increased for the six month period of 1999, as
compared to 1998, by $899,000 or 27.8%. However, as a percentage
of revenue, selling, general and administrative expense decreased
to 22.5% for the six month period ended June 30, 1999, compared to
22.7% for the same period of 1998. The increase in the total
selling, general, and administrative expenses is partially due to
the addition of Chem-Con which contributed $339,000 of this
increase, in addition to the increased expenses associated with the
our additional sales and marketing efforts as we continue to
refocus the business segments into new environmental markets, such
as nuclear and mixed waste, and the additional administrative
overhead associated with our research and development efforts. We
have continued to expense in the current period all research and
development costs associated with the development of various
technologies which we aggressively pursued during 1999.
Depreciation and amortization expense for the six month period
ended June 30, 1999, reflects an increase of $81,000 as compared to
the same period of 1998. This increase is attributable to the
acquisition of Chem-Con, effective June 1, 1999, for which
depreciation of $44,000 and amortization expense of $38,000 were
recorded during June of 1999. This acquisition also accounted for
the change in the quarter ended June 30, 1999.
Interest expense decreased $51,000 from the quarter ended
June 30, 1999, as compared to the corresponding period of 1998,
excluding discontinued operations. Interest expense also decreased
by $151,000 for the six month period ending June 30, 1999, as
compared to the corresponding period of 1998, excluding
discontinued operations. The decrease in interest expense for both
the quarter and six month periods of 1999 are a direct result of
the reduced borrowing levels on the Congress Financial Corporation
revolving loan and term note. During the last half of 1998, the
revolving loan had been paid down to a minimal balance. However,
in conjunction with the acquisition of Chem-Con, certain debt was
consolidated into the Congress Financial Corporation revolving loan
and term debt and additional borrowing were made to fund certain
settlements and repayments in conjunction with the acquisition,
which resulted in increased borrowing levels effective June 1999.
See Notes 3 and 4 to Notes to Consolidated Financial Statements for
additional disclosure on the Chem-Con acquisition and Congress
Financial Corporation debt. Interest expense for discontinued
operations was $144,000 for the six month period ended June 30,
1999, specifically identified to such operations, including that
debt specifically incurred under the Company's revolving note and
term loan facility. See Note 2 to Notes to Consolidated Financial
Statements regarding discontinued operations.
Preferred Stock dividends increased $14,000 for the six month
period ended June 30, 1999, as compared to the corresponding period
of 1998. This increase is due to the issuance and subsequent
dividends of the Series 10 Class J Convertible Preferred Stock
which were issued in June of 1998. However, for the quarter ended
June 30, 1999, Preferred Stock dividends decreased by $16,000 to
21
<PAGE>
$73,000, as compared to $89,000 for the quarter ended June 30,
1998. This decrease in the second quarter of 1999 is a result of
the conversion of $4,563,000 of the Convertible Preferred Stock
into Common Stock on April 20, 1999, of the total of $9,850,000
outstanding prior to such conversion.
Discontinued Operations
On January 27, 1997, an explosion and resulting tank fire
occurred at the Perma-Fix of Memphis, Inc. ("PFM") facility, a
hazardous waste storage, processing and blending facility, which
resulted in damage to certain hazardous waste storage tanks located
on the facility and caused certain limited contamination at the
facility. As a result of the significant disruption and the cost to
rebuild and operate this segment, the Company made a strategic
decision, in February 1998, to discontinue its fuel blending
operations at PFM. The fuel blending operations represented the
principal line of business for PFM prior to this event, which
included a separate class of customers, and its discontinuance has
required PFM to attempt to develop new markets and customers,
through the utilization of the facility as a storage facility under
its RCRA permit and as a transfer facility.
Liquidity and Capital Resources of the Company
At June 30, 1999, the Company had cash and cash equivalents of
$486,000, including $4,000 from discontinued operations. This cash
and cash equivalents total reflects a decrease of $290,000 from
December 31, 1998, as a result of net cash provided by continuing
operations of $572,000, offset by cash used by discontinued
operation of $551,000, cash used in investing activities of
$3,455,000 (principally purchases of equipment, net totaling
$895,000 and the net cash used to fund the acquisition totaling
$2,616,000) and cash provided by financing activities of
$3,144,000 (principally additional borrowing under the revolving
loan and term note facility pursuant to the acquisition). Accounts
receivable, net of allowances for doubtful accounts, totaled
$11,133,000, an increase of $5,183,000 over the December 31, 1998,
balance of $5,950,000. This increase in accounts receivable
represents the addition of the Chem-Con receivables as acquired
effective June 1, 1999, in the amount of $4,146,000 and the
increase of $1,037,000 resulting from the increased revenues during
the second quarter of 1999.
On January 15, 1998, the Company, as parent and guarantor,
and all direct and indirect subsidiaries of the Company, as co-
borrowers and cross-guarantors, entered into a Loan and Security
Agreement ("Agreement") with Congress Financial Corporation
(Florida) as lender ("Congress"). The Agreement provides for a
term loan in the amount of $2,500,000, which requires principal
repayments based on a four-year level principal amortization over
a term of 36 months, with monthly principal payments of $52,000.
Payments commenced on February 1, 1998, with a final balloon
payment in the amount of approximately $573,000 due on January 14,
2001. The Agreement also provides for a revolving loan facility in
the amount of $4,500,000. At any point in time the aggregate
available borrowings under the facility are subject to the maximum
credit availability as determined through a monthly borrowing base
calculation, as updated for certain information on a weekly basis,
equal to 80% of eligible accounts receivable accounts of the
Company as defined in the Agreement. The termination date on the
revolving loan facility is also the third anniversary of the
closing date. The Company incurred approximately $230,000 in
financing fees relative to the solicitation and closing of this
loan agreement (principally commitment, legal and closing fees)
which are being amortized over the term of the Agreement.
Pursuant to the Agreement, the term loan and revolving loan
both bear interest at a floating rate equal to the prime rate plus
1 3/4%. The loans also contain certain closing, management and
unused line fees payable throughout the term. The loans are
subject to a 3.0% prepayment fee in the first year, 1.5% in the
second and 1.0% in the third year of the Agreement.
In connection with the acquisition of Chemical Conservation
Corporation, Chemical Conservation of Georgia and Chem-Met
Services, Inc. (" Chem-Con") on May 27, 1999, Congress, the
Company, and the Company's subsidiaries, including Chem-Con entered
into an Amendment and Joinder to Loan and Security Agreement (the
"Loan Amendment") dated May 27, 1999, pursuant to which the Loan
and Security Agreement ("Original Loan Agreement") among Congress,
the Company and the Company's subsidiaries was amended to provide,
among other things, (i) the credit line being increased from
22
<PAGE>
$7,000,000 to $11,000,000, with the revolving line of credit
portion being determined as the maximum credit of $11,000,000, less
the term loan balance, with the exact amount that can be borrowed
under the revolving line of credit not to exceed eighty percent
(80%) of the Net Amount of Eligible Accounts (as defined in the
Original Loan Agreement) less certain reserves; (ii) the term loan
portion of the Original Loan Agreement being increased from its
current balance of approximately $1,600,000 to $3,750,000 and it
shall be subject to a four year amortization schedule payable over
three years at an interest rate of 1.75% over prime; (iii) the term
of the Original Loan Agreement, as amended, will be extended for
three years from the date of the acquisition, subject to earlier
termination pursuant to the terms of the Original Loan Agreement,
as amended; (iv) Chemical Florida, Chemical Georgia and Chem-Met
being added as co-borrowers under the Original Loan Agreement, as
amended; (v) the interest rate on the revolving line of credit will
continue at 1.75% over prime, with a rate adjustment to 1.5% if
1999 net income applicable to Common Stock of the Company is equal
to or greater than $1,500,000 for either fiscal year ended December
31, 1999 or 2000; (vi) the monthly service fee shall increase from
$1,700 to $2,000; (vii) government receivables will be limited to
20% of eligible accounts receivable; and (viii) certain obligations
of Chem-Met shall be paid at closing of the acquisition of
Chem-Con and Chem-Met. The Loan Amendment became effective on
June 1, 1999, when the Stock Purchase Agreements were consummated.
Payments under the term loan commenced on June 1, 1999, with
monthly principal payments of approximately $78,000 and a final
balloon payment in the amount of $938,000 on June 1, 2002. The
Company incurred approximately $40,000 in additional financing fees
relating to the closing of this amendment, which is being amortized
over the remaining term of the agreement.
As of June 30, 1999, borrowings under the revolving loan
agreement were approximately $3,642,000, an increase of $3,545,000
over the December 31, 1998, balance of $97,000. This increase
represents $2,799,000 funded pursuant to the Chem-Con acquisition
on June 1, 1999, and $746,000 for general working capital needs
which is typical during increased revenue periods. The balance
under the Congress term loan at June 30, 1999, was $3,672,000, an
increase of $1,745,000 over the December 31, 1998, balance of
$1,927,000. This increase represents $2,083,000 funded pursuant to
the Chem-Con acquisition on June 1, 1999, partially offset by
scheduled repayments of $338,000. We funded through the revolving
and term loan a total of $4,882,000 pursuant to the Chem-Con
acquisition excluding legal, professional and other closing fees,
of which $2,651,000 represented the repayment of certain debt
obligations, $1,192,000 represented payment of certain settlement
obligations and $1,000,000 of the cash consideration as paid to the
former owners of Chem-Con. As of June 30, 1999, the Company's
borrowing availability under the Congress credit facility, based on
its then outstanding eligible accounts receivable, was
approximately $3,062,000.
Pursuant to the terms of the Stock Purchase Agreements in
connection with the acquisition of Chem-Con, a portion of the
consideration was paid in the form of three promissory notes, in
the aggregate amount of $4,700,000 payable to the former owners of
the Company. The promissory notes are paid in equal monthly
installments of principal and interest of approximately $90,000
over five years with the first installment due on July 1, 1999.
The three promissory notes have an interest rate of 5.5% for the
first three years and 7% for the remaining two years. Payment of
such promissory notes are guaranteed by Chem-Met under a non-
recourse guaranty, which non-recourse guaranty is secured by
certain real estate owned by Chem-Met. See Note 3 for further
discussion of the above referenced acquisition.
At June 30, 1999, we had $13,517,000 in aggregate principal
amounts of outstanding debt, related to continuing operations, as
compared to $3,014,000 at December 31, 1998. This increase in
outstanding debt of $10,503,000 reflects the net borrowings on the
Congress Financial Corporation revolving loan and term note
facility of $5,290,000 principally related to the Chem-Con
acquisition as discussed above, $4,700,000 in the form of three new
promissory notes in payment of a portion of the consideration for
the Chem-Con acquisition as discussed above, approximately $425,000
in various capital lease obligations assumed in conjunction with
the acquisition of Chem-Con and $221,000 of debt related to new
capital equipment at several of our existing facilities. As of
June 30, 1999, we had $11,000 in aggregate principal amounts of
outstanding debt related to PFM discontinued operations, all of
which is classified as current.
23
<PAGE>
Our net purchases of new capital equipment for continuing
operations for the three and six month period ended June 30, 1999,
totaled approximately $654,000 and $1,117,000, respectively, of
which $89,000 and $132,000, respectively, was financed. We have
budgeted capital expenditures of $2,500,000 for 1999 related to the
original Perma-Fix locations, which includes completion of certain
current projects, as well as other identified capital and permit
compliance purchases. We have not completed as of yet a capital
asset budget for the Chem-Con facilities for the reminder of 1999.
However, we do not foresee significant capital asset requirements
in the short term. We anticipate funding the remainder of these
capital expenditures by a combination of lease financing with
lenders other than the equipment financing arrangement discussed
above, and/or internally generated funds.
Our working capital position at June 30, 1999, was a deficit
of $1,035,000, as compared to capital of $372,000 at December 31,
1998, which reflects a decrease in this position of $1,407,000
during this first six months of 1999. This reduced working capital
position is principally a result of the impact of the Chem-Con
acquisition. The consideration was paid in the form of cash, notes
and debt, with the cash portion being $1,000,000, a portion of
which came from current cash and a portion funded through the
Congress long term revolving loan. The Congress term loan was also
increased by $2,083,000 pursuant to this acquisition, which
resulted in an increase of $313,000 in the current portion of the
term loan debt. Additionally, as of June 30, 1999, the acquired
Chem-Con companies had a deficit working capital position of
approximately $360,000. See Note 3 to Notes to Consolidated
Financial Statements for further discussion on this acquisition.
On April 20, 1999, the Company and RBB Bank Aktiengesellschaft
("RBB Bank") entered into an agreement to restructure the Company's
Convertible Preferred Stock held by RBB Bank, which totaled
approximately $9.5 million. The restructuring was accomplished
through two exchange agreements ("First Exchange Agreement" and
"Second Exchange Agreement") which are further described in Note 7
to Notes to Consolidated Financial Statements and in "Part II-Item
5. Other Information". Under the restructuring the Company and RBB
Bank :
1. RBB Bank converted, pursuant to existing terms of the
Convertible Preferred Stock, $4.6 million of the Convertible
Preferred Stock into approximately 6.1 million shares of the
Company's Common Stock, which was completed in May 1999.
2. The Company was granted the right to purchase at a stated
value ($1,000 per share) $750,000 of the Convertible Preferred
Stock, which was subsequently purchased on July 15, 1999.
3. The terms of the balance of the Convertible Preferred Stock
(approximately $4.2 million) was changed, as follows:
a. Not subject to conversion for 12 months from the date of
the restructuring ("Lock-Up Period");
b. For one (1) year from the end of the Lock-Up Period, any
conversion of the Convertible Preferred Stock would be
subject to a minimum conversion price of $1.50 per share
of Common Stock; and
c. The Company will be granted the option to redeem the
shares of the Convertible preferred stock at 110% of
the stated value ($1,000 per share) for the first twelve
months from the date of restructuring and RBB Bank may
not convert such shares redeemed during such twelve
month period, and thereafter the Company has the option
to redeem the Convertible Preferred Stock at 120% of
the stated value ($1,000 per share) of the Convertible
preferred stock and upon notice of such redemption RBB
Bank will have the right to exercise its conversion
rights pursuant to the then current terms of the
Convertible Preferred Stock.
4. The Company is required to register with the Commission the
Common Stock issuable upon conversion of the Convertible
Preferred Stock by January 31, 2000. The Company agreed that
if a registration statement covering such Common Stock is not
declared effective by the Commission by January 31, 2000, the
Company agrees to pay to RBB Bank a penalty in an amount equal
to two percent (2%) of the product of (a) the number of shares
24
<PAGE>
of such Convertible Preferred Stock then outstanding times (b)
$1,000, payable in cash. The Company agreed that for each
month thereafter which terminates without such registration
statement being declared effective by the Commission before
the end of the last day thereof, the Company shall pay to RBB
Bank a penalty in an amount equal to two percent (2%) of the
product of (a) the number of shares of Convertible Preferred
Stock then outstanding times (b) $1,000, payable in cash.
5. The remaining terms of the Convertible Preferred Stock will
remain unchanged.
The Company financed the redemption of $750,000 of
Convertible Preferred Stock through borrowings under its revolving
credit facility. See "Part II-Item 5. Other Information".
As discussed above, on June 1, 1999, the Company purchased all
of the outstanding stock of Chem-Con and paid $8.7 million, as
follows: (i) $1 million in cash, (ii) five (5) year promissory
notes totaling the original principal amount of $4.7 million,
bearing an annual rate of interest of 5.5% for the first three
years and 7% for the last two years, with principal and accrued
interest payable in monthly installments of approximately $90,000
each, and (iii) $3 million payable in the form of 1.5 million
shares of the Company's Common Stock based on each share having an
agreed value of $2.00. If the average of the closing price of the
Company's Common Stock as quoted on the NASDAQ for the five (5)
trading days immediately preceding the date eighteen (18) months
after June 1, 1999 ("Valuation Date") is less than $2.00 per share,
the Company is to pay in cash or Common Stock or a combination
thereof, at the Company's option, the difference between $3 million
and the value of the 1.5 million shares of Common Stock based on
the five (5) trading day average as quoted on the NASDAQ
immediately preceding the Valuation Date. Under the Company's loan
agreement, the Company may pay such amount, if any, only in Common
Stock unless the lender agrees that the Company may satisfy such in
whole or in part in cash. However, the Company is not to issue in
connection with the acquisition of Chem-Con more than 18% of the
outstanding shares of Common Stock at the closing of the
acquisition of Chem-Con.
The Company funded the cash portion of the purchase price for
Chem-Con through borrowings under its revolving credit facility as
discussed above and will fund the payment of the promissary notes
issued as a part of the purchase price by borrowings under its
revolving credit facility and/or working capital generated from
operations.
In addition, the Company arranged with its lenders to include
within its revolving credit facility Chem-Con and, as a result,
increased its credit facility from approximately $7 million to
approximately $11 million, and used the expanded credit facility
(a) to pay certain claims against Chem-Con totaling approximately
$1,192,000 million and (b) to replace approximately $2,651,000
million of Chem-Con existing credit facilities.
Environmental Contingencies
The Company is engaged in the Waste Management Services
segment of the pollution control industry. As a participant in the
on-site treatment, storage and disposal market and the off-site
treatment and services market, the Company is subject to rigorous
federal, state and local regulations. These regulations mandate
strict compliance and therefore are a cost and concern to the
Company. The Company makes every reasonable attempt to maintain
complete compliance with these regulations; however, even with a
diligent commitment, the Company, as with many of its competitors,
may be required to pay fines for violations or investigate and
potentially remediate its waste management facilities.
The Company routinely uses third party disposal companies, who
ultimately destroy or secure landfill residual materials generated
at its facilities or at a client's site. The Company, compared to
its competitors, disposes of significantly less hazardous or
industrial by-products from its operations due to rendering
material non-hazardous, discharging treated wastewaters to
publicly-owned treatment works and/or processing wastes into
saleable products. In the past, numerous third party disposal
sites have improperly managed wastes and consequently require
remedial action; consequently, any party utilizing these sites may
be liable for some or all of the remedial costs. Despite the
25
<PAGE>
Company's aggressive compliance and auditing procedures for
disposal of wastes, the Company could, in the future, be notified
that it is a PRP at a remedial action site, which could have a
material adverse effect on the Company.
During January 1998, PFM was notified by the EPA that it
believed that PFM was a PRP regarding the remediation of a site
owned and operated by W.R. Drum, Inc. ("WR Drum") in Memphis,
Tennessee (the "Drum Site"), as further discussed in Item 3 "Legal
Proceedings" in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998. During the third quarter of 1998, the
government agreed to PFM's offer to pay $225,000 ($150,000 payable
at closing and the balance payable over a twelve month period) to
settle any potential liability regarding this Drum Site. During
January 1999, the Company executed a "Partial Consent Decree"
pursuant to this settlement, which settlement is subject to
approval of the court. It is anticipated that the settlement will
be approved and the initial payment of $150,000 will be made during
the third quarter of 1999. However, there are no assurances that
the settlement will be approved by the court.
In addition to budgeted capital expenditures of $2,500,000 for
1999 at the TSD facilities, which are necessary to maintain permit
compliance and improve operations, as discussed above in this
Management's Discussion and Analysis, we have also budgeted for
1999 an additional $437,000 in environmental expenditures to comply
with federal, state and local regulations in connection with
remediation of certain contaminates at two locations. The two
locations where these expenditures will be made are a parcel of
property leased by a predecessor to PFD in Dayton, Ohio (EPS), a
former RCRA storage facility as operated by the former owners of
PFD, and PFM's facility in Memphis, Tennessee. We have estimated
the expenditures for 1999 to be approximately $222,000 at the EPS
site and $215,000 at the PFM location of which $39,000 and $88,000
were spent during the first six months of 1999, respectively.
Additional funds will be required for the next five to ten years to
properly investigate and remediate these sites. We expect to fund
these expenses to remediate these two sites from funds generated
internally, however, no assurances can be made that we will be able
to do so.
We also recognized long-term environmental accruals totaling
$4,319,000 related to the Chem-Con facilities acquired effective
June 1, 1999, of which we anticipate spending approximately
$432,000 over the next twelve months. This amount represents
management's best estimate of the long-term costs to remove
contaminated soil and to undergo groundwater remediation activities
at two of the Chem-Con acquired facilities, Valdosta, Georgia and
Detroit, Michigan. Both facilities have pursued remedial
activities for the last five years with additional studies
forthcoming and potential groundwater restoration could extend for
a period of ten years. No insurance or third party recovery was
taken into account in determining our cost estimates or reserve,
nor do our cost estimates or reserve reflect any discount for
present value purposes.
Recent Accounting Pronouncements
In June, 1998 the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("FAS 133"). FAS
133 requires companies to recognize all derivative contracts as
either assets or liabilities in the balance sheet and to measure
them at fair value. FAS 133 is effective for periods beginning
after June 15, 1999. Historically, we have not entered into
derivative contracts. Accordingly, FAS 133 is not expected to
affect our financial statements.
26
<PAGE>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
PART II - Other Information
Item 1. Legal Proceedings
_________________
There are no additional material legal proceedings pending
against the Company and/or its subsidiaries not previously reported
by the Company in Item 3 of its Form 10-K for the year ended
December 31, 1998, which Item 3 is incorporated herein by
reference.
Item 2. Changes in Securities and Use of Proceeds
_________________________________________
(c) During the quarter ended June 30, 1999, the Company sold
or entered into an agreement to sell, equity securities that were
not registered under the Securities Act of 1933, as amended (the
"Securities Act"), other than as previously reported, as such term
is defined under Rule 12b-2 of the Exchange Act of 1934, as amended
(the "Exchange Act"), as follows:
(i) During May 1999, the Company issued to RBB Bank
Aktiengesellschaft ("RBB Bank"), 3,090,563 shares of Common Stock
to reflect RBB Bank's conversion on April 20, 1999, of 2,231 shares
of the Company's Series 3 Class C Convertible Preferred Stock
("Series 3 Preferred") pursuant to the terms of the Series 3
Preferred. The issuance of the Common Stock was made in a private
placement pursuant to an exemption from registration under Section
4(2) and/or Section 3(a)9 of the Securities Act. As of the
conclusion of the described conversion, there were 1,769 shares of
Series 3 Preferred remaining outstanding, all of which were held by
RBB Bank.
(ii) During May 1999, the Company issued to RBB Bank 2,057,143
shares of Common Stock to reflect RBB Bank's conversion on
April 20, 1999, of 1,584 shares of the Company's Series 8 Class H
Convertible Preferred Stock ("Series 8 Preferred") pursuant to the
terms of the Series 8 Preferred. The issuance of the Common Stock
was made in a private placement pursuant to an exemption from
registration under Section 4(2) and/or Section 3(a)9 of the
Securities Act. As of the conclusion of the described conversion,
there were 916 shares of Series 8 Preferred remaining outstanding,
all of which were held by RBB Bank.
(iii) During May 1999, the Company issued to RBB Bank 971,429
shares of Common Stock to reflect RBB Bank's conversion on
April 20, 1999, of 748 shares of the Company's Series 10 Class J
Convertible Preferred Stock ("Series 10 Preferred") pursuant to the
terms of the Series 10 Preferred. The issuance of the Common Stock
was made in a private placement pursuant to an exemption from
registration under Section 4(2) and/or Section 3(a)9 of the
Securities Act. As of the conclusion of the described conversion,
there were 2,252 shares of Series 10 Preferred remaining
outstanding, all of which were held by RBB Bank.
(iv) On or about April 29, 1999, Jeffery M. Canouse, James P.
Canouse, and John C. Canouse (collectively, the "Canouses")
purchased 14,887, 20,020, and 12,320 shares of Common Stock,
respectively, or an aggregate of 47,227 shares of Common Stock.
These shares were purchased on a cashless basis pursuant to the
terms, as amended, of a certain warrant ("Carey Warrant") by the
Canouses tendering certain portions of the "in the money" Carey
Warrant as consideration for the exercise of other portions of the
Carey Warrant. The Carey Warrant had been originally issued to J.P.
Carey Enterprises, Inc., a provider of investment banking services
to the Company ("Carey"), allowing the purchase of 195,000 shares
of Common Stock for $0.73 per share and which was partially
assigned on January 5, 1998, to the Canouses, shareholders of
Carey, allowing each of them to purchase up to 39,000 shares of
Common Stock thereunder. The issuance to Carey was described in a
Form D which was filed with the Securities and Exchange Commission
("SEC") under Rule 506 on August 3, 1996. The shares of Common
Stock were issued to Canouses in a private placement under Section
27
<PAGE>
4(2) of the Act as the Canouses had access to the same kind of
information which would be included in a registration statement and
is a highly sophisticated investor. The shares issued to Canouses
are restricted shares which were issued with a restrictive legend,
however, such shares are covered by an effective registration
statement on Form S-3, No. 333-14513 ("1996 Registration
Statement"), filed with the SEC, effective November 13, 1996,
registering for re-offer or resale from time to time certain shares
of Common Stock including the 195,000 shares of Common Stock, to be
issued from time to time upon exercise of the Carey Warrant. On
January 29, 1998, a Third Supplement ("Third Supplement") to the
Prospectus dated November 13, 1996, contained within the 1996
Registration Statement ("Prospectus") was filed with the SEC, which
Third Supplement described, among other things, the assignment of
a portion of the Carey Warrant to Canouse. The Third Supplement
also served to supplement and amend the Selling Security Holders
table in the Prospectus by, among other things, (i) adding Canouse
as a Selling Shareholder; and (ii) adjusting the offering
information applicable to Carey, to account for the assignment by
Carey of the Carey Warrant. On June 4, 1999, a Fourth Supplement
("Fourth Supplement") to the Prospectus was filed with the SEC,
which Fourth Supplement described, among other things, the
amendment of the Carey Warrant to allow the holders thereof to
exercise such warrants on a cashless basis. The Fourth Supplement
also served to supplement and amend the Selling Security Holders
table in the Prospectus by, among other things, adjusting the
offering information applicable to the Canouses as Selling
Shareholders to account for their exercises of the Carey Warrant.
(v) On or about May 4, 1999, pursuant to the terms of a
certain Consulting Agreement ("Consulting Agreement") entered into
effective as of January 1, 1998, the Company issued 4,000 shares of
Common Stock in payment of accrued fees of $3,000 to Alfred C.
Warrington IV, an outside, independent consultant to the Company,
as consideration for certain consulting services rendered to the
Company by Warrington from January through March 1999. The
issuance of Common Stock pursuant to the Consulting Agreement was
a private placement under Section 4(2) of the Act and/or Rule 506
of Regulation D as promulgated under the Act. The Consulting
Agreement provides that Warrington will be paid $1,000 per month of
service to the Company, payable, at the option of Warrington (i)
all in cash, (ii) sixty-five percent in shares of Common Stock and
thirty-five percent in cash, or (iii) all in Common Stock. If
Warrington elects to receive part or all of his compensation in
Common Stock, such will be valued at seventy- five percent of its
"Fair Market Value" (as defined in the Consulting Agreement).
Warrington elected to receive all of his accrued compensation from
January 1999 through the end of March 1999 in Common Stock.
Warrington represented and warranted in the Consulting Agreement,
inter alia, as follows: (i) the Common Stock is being acquired for
Warrington's own account, and not on behalf of any other persons;
(ii) Warrington is acquiring the Common Stock to hold for
investment, and not with a view to the resale or distribution of
all or any part of the Common Stock; (iii) Warrington will not sell
or otherwise transfer the Common Stock in the absence of an
effective registration statement under the Act, or an opinion of
counsel satisfactory to the Company, that the transfer can be made
without violating the registration provisions of the Act and the
rules and regulations promulgated thereunder; (iv) Warrington is an
"accredited investor" as defined in Rule 501 of Regulation D as
promulgated under the Act; (v) Warrington has such knowledge,
sophistication and experience in financial and business matters
that he is capable of evaluating the merits and risks of the
acquisition of the Common Stock; (vi) Warrington fully understands
the nature, scope and duration of the limitations on transfer of
the Common Stock as contained in the Consulting Agreement, (vii)
Warrington understands that a restrictive legend as to
transferability will be placed upon the certificates for any of the
shares of Common Stock received by Warrington under the Consulting
Agreement and that stop transfer instructions will be given to the
Company's transfer agent regarding such certificates.
Item 5. Other Information
_________________
First Exchange Agreements
On July 15, 1999, the Company and RBB Bank entered into (i) an
Exchange Agreement, dated July 15, 1999 ("Series 3 Exchange
Agreement"), pursuant to which the 1,769 outstanding shares of
28
<PAGE>
Series 3 Preferred, all of which were held by RBB Bank, were
exchanged for an equal number of shares of newly created Series 11
Class K Convertible Preferred Stock par value $.001 per share
("Series 11 Preferred"); (ii) an Exchange Agreement, dated July 15,
1999 ("Series 8 Exchange Agreement"), pursuant to which the
outstanding shares of Series 8 Preferred, all of which were held by
RBB Bank, were exchanged for an equal number of shares of newly
created Series 12 Class L Convertible Preferred Stock, par value
$.001 per share ("Series 12 Preferred"); and (iii) an Exchange
Agreement, dated July 15, 1999 ("Series 10 Exchange Agreement"),
pursuant to which the outstanding shares of Series 10 Preferred
Stock, all of which were held by RBB Bank, were exchanged for an
equal number of shares of newly created Series 13 Class M
Convertible Preferred Stock, par value $.001 per share ("Series 13
Preferred").
The sales of the Series 11 Preferred, Series 12 Preferred, and
Series 13 Preferred to RBB Bank were made in private placements
under Section 4(2) and/or Section 3(a)(9) of the Securities Act.
The terms of the newly issued securities are substantially the same
as the series for which each was exchanged with the exception of
certain differences as described hereafter.
Redemption Terms of Series 8 Preferred and Series 12 Preferred
The Series 8 Preferred was redeemable by the Company (a)
within four (4) years from June 9, 1997 at $1,300 per share when
the average of the closing bid price of the Common Stock for ten
(10) consecutive days is in excess of $4.00 per share as quoted on
the NASDAQ and (b) at $1,000 per share after four years from
June 9, 1997. The Company had to provide thirty (30) days notice
to the Series 8 Preferred holder prior to any date stipulated by
the Company for redemption and at such time, the Series 8 Preferred
holder has the option of converting the shares which are to be
redeemed.
Under the terms of the Series 12 Preferred, the Company is
permitted to redeem up to 300 shares of Series 12 Preferred for
$1,000 per share, or an aggregate of $300,000, provided that any
such redemption must occur within 120 days of issuance of the
Series 12 Preferred. On July 15, 1999, the Company redeemed 300
shares of Series 12 Preferred leaving 616 shares of Series 12
Preferred issued and outstanding.
Redemption Terms of Series 10 Preferred and Series 13 Preferred
The Series 10 was not redeemable by the Company. Under the
terms of the Series 13 Preferred, the Company is permitted to
redeem up to 450 shares of Series 13 Preferred for $1,000 per
share, or an aggregate of $450,000, provided that any such
redemption must occur within 120 days of issuance of the Series 13
Preferred. On July 15, 1999, the Company redeemed 450 shares of
Series 13 Preferred leaving 1,802 shares of Series 13 Preferred
issued and outstanding.
Other Differences
In addition to the different redemption terms for the
Series 12 Preferred and the Series 13 Preferred described above,
the Series 11 Preferred, Series 12 Preferred and Series 13
Preferred (collectively, the "Exchange Preferred") each contain
provisions, described hereafter, which are different from those
provisions in the Series 3 Preferred, Series 8 Preferred and Series
10 Preferred, as applicable.
* RBB Bank may make no conversions of the Exchange
Preferred for 12 months from July 15, 1999.
* Each of the Exchange Preferred has a minimum conversion
price of $1.50 per share for a 24 month period from
July 15, 1999.
* For 12 months from July 15, 1999, the Company may redeem
at any time and from time to time any of the Exchange
Preferred held by RBB Bank at 110% of its "stated value"
29
<PAGE>
of $1,000 per share. Thereafter, the Company may redeem
at any time and from time to time any of such Exchange
Preferred at 120% of its "stated value" of $1,000 per
share. After 12 months from July 15, 1999, upon any
notice of redemption, RBB shall have only 5 business days
to exercise its conversion rights regarding the redeemed
shares. For 12 months from July 15, 1999, RBB Bank
cannot elect to convert shares of Exchange Preferred even
if the Company redeems such shares of Exchange Preferred.
Second Exchange Agreements
On August 3, 1999, the Company and RBB Bank entered into
(i) an Exchange Agreement, dated August 3, 1999 ("Series 11
Exchange Agreement"), pursuant to which the 1,769 outstanding
shares of Series 11 Preferred, all of which were held by RBB Bank,
were exchanged for an equal number of shares of newly created
Series 14 Class N Convertible Preferred Stock par value $.001 per
share ("Series 14 Preferred"); (ii) an Exchange Agreement, dated
August 3, 1999 ("Series 12 Exchange Agreement"), pursuant to which
the 616 outstanding shares of Series 12 Preferred, all of which
were held by RBB Bank, were exchanged for an equal number of shares
of newly created Series 15 Class O Convertible Preferred Stock, par
value $.001 per share ("Series 15 Preferred"); and (iii) an
Exchange Agreement, dated August 3, 1999 ("Series 13 Exchange
Agreement"), pursuant to which the 1,802 outstanding shares of
Series 13 Preferred Stock, all of which were held by RBB Bank, were
exchanged for an equal number of shares of newly created Series 16
Class P Convertible Preferred Stock, par value $.001 per share
("Series 16 Preferred").
The sales of the Series 14 Preferred, Series 15 Preferred, and
Series 16 Preferred (collectively, the "Second Exchange Preferred")
to RBB Bank were made in private placements under Section 4(2)
and/or Section 3(a)(9) of the Securities Act. The terms of each of
the Second Exchange Preferred are substantially identical to the
particular Exchange Preferred for which each was exchanged except
that the July 15 dates as described above in connection with the
Exchange Preferred were changed to April 20 and certain
registration rights were granted regarding the shares of Common
Stock issuable under the Second Exchange Preferred. Therefore, (i)
RBB Bank may make no conversions of the Second Exchange Preferred
for 12 months from April 20, 1999; (ii) each of the Second Exchange
Preferred has a minimum conversion price of $1.50 per share for a
24 month period from April 20, 1999; (iii) for 12 months from April
20, 1999, the Company may redeem at any time and from time to time
any of the Second Exchange Preferred held by RBB Bank at 110% of
its "stated value" of $1,000 per share; and (iv) if the Company
does not register with the Commission the Common Stock issuable
upon conversion of the Convertible Preferred Stock by January 31,
2000, the Company agrees to pay to RBB Bank a penalty in an amount
equal to two percent (2%) of the product of (a) the number of
shares of such Convertible Preferred Stock then outstanding times
(b) $1,000, payable in cash. The Company further agreed that for
each month thereafter which terminates without such registration
statement being declared effective by the Commission before the end
of the last day thereof, the Company shall pay to RBB Bank a
penalty in an amount equal to two percent (2%) of the product of
(a) the number of shares of Convertible Preferred Stock then
outstanding times (b) $1,000, payable in cash. After 12 months from
April 20, 1999, the Company may redeem at any time and from time to
time any of such Second Exchange Preferred at 120% of its "stated
value" of $1,000 per and, upon any notice of redemption, RBB shall
have only 5 business days to exercise its conversion rights
regarding the redeemed shares. During the 12 months after
April 20, 1999, RBB Bank cannot elect to convert shares of Second
Exchange Preferred even if the Company redeems such shares of
Second Exchange Preferred.
As of the date of this report, RBB Bank holds 6,891,427 shares
of Common Stock of, or approximately 33.8% of the outstanding
shares of Common Stock.
30
<PAGE>
Stockholder Proposals
The Company's 1998 Annual Meeting of Stockholders took place on
May 20, 1998, however, the Company anticipates that its 1999 Annual
Meeting of Stockholders will occur on November 4, 1999. Pursuant
to Rule 14a-5(f) as promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), stockholder proposals
submitted to the Company pursuant to Rule 14a-8 under the Exchange
Act, for inclusion in the Company's proxy materials for its 1999
Annual Meeting of Stockholders must be received by the Company a
reasonable time before the Company begins to print and mail its
proxy materials. Any stockholder proposal submitted with respect
to the Company's 1999 Annual Meeting of Stockholders which proposal
is received by the Company after such time will be considered
untimely for purposes of Rule 14a-4 and 14a-5 under the Exchange
Act and the Company may vote against such proposal using its
discretionary voting authority as authorized by proxy.
Item 6. Exhibits and Reports on Form 8-K
________________________________
(a) Exhibits
________
3(i) Restated Certificate of Incorporation, as amended, and
all Certificates of Designations.
4.1 Exchange Agreement exchanging 1,769 shares of Series 3
Class C Convertible Preferred Stock, Par Value $.001 per
share of Perma-Fix Environmental Services, Inc. for 1,769
shares of Series 11 Class K Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix Environmental
Services, Inc. dated July 15, 1999, between the Company
and RBB Bank Aktiengesellschaft.
4.2 Exchange Agreement exchanging 916 shares of Series 8
Class H Convertible Preferred Stock, Par Value $.001 per
share of Perma-Fix Environmental Services, Inc. for 916
shares of Series 12 Class L Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix Environmental
Services, Inc. dated July 15, 1999, between the Company
and RBB Bank Aktiengesellschaft.
4.3 Exchange Agreement exchanging 2,252 shares of Series 10
Class J Convertible Preferred Stock, Par Value $.001 per
share of Perma-Fix Environmental Services, Inc. for 2,252
shares of Series 13 Class Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix Environmental
Services, Inc. dated July 15, 1999, between the Company
and RBB Bank Aktiengesellschaft.
4.4 Certificate of Designations of Series 11 Class K
Convertible Preferred Stock, dated July 15, 1999, as
contained in Exhibit 3(i) herein.
4.5 Specimen copy of Certificate relating to the Series 11
Class K Convertible Preferred Stock.
4.6 Certificate of Designations of Series 12 Class L
Convertible Preferred Stock, dated July 15, 1999, as
contained in Exhibit 3(i) herein.
4.7 Specimen copy of Certificate relating to the Series 12
Class L Convertible Preferred Stock.
4.8 Certificate of Designations of Series 13 Class M
Convertible Preferred Stock, dated July 15, 1999, as
contained in Exhibit 3(i) herein.
4.9 Specimen copy of Certificate relating to the Series 13
Class M Convertible Preferred Stock.
31
<PAGE>
4.10 Exchange Agreement exchanging 1,769 shares of Series 11
Class K Convertible Preferred Stock, Par Value $.001 per
share of Perma-Fix Environmental Services, Inc. for 1,769
shares of Series 14 Class N Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix Environmental
Services, Inc. dated August 3, 1999, between the Company
and RBB Bank Aktiengesellschaft.
4.11 Exchange Agreement exchanging 616 shares of Series 12
Class L Convertible Preferred Stock, Par Value $.001 per
share of Perma-Fix Environmental Services, Inc. for 616
shares of Series 15 Class O Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix Environmental
Services, Inc. dated August 3, 1999, between the Company
and RBB Bank Aktiengesellschaft.
4.12 Exchange Agreement exchanging 1,802 shares of Series 13
Class M Convertible Preferred Stock, Par Value $.001 per
share of Perma-Fix Environmental Services, Inc. for 1,802
shares of Series 16 Class P Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix Environmental
Services, Inc. dated August 3, 1999, between the Company
and RBB Bank Aktiengesellschaft.
4.13 Certificate of Designations of Series 14 Class N
Convertible Preferred Stock, dated August 10, 1999, as
contained in Exhibit 3(i) herein.
4.14 Specimen copy of Certificate relating to the Series 14
Class N Convertible Preferred Stock.
4.15 Certificate of Designations of Series 15 Class O
Convertible Preferred Stock, dated August 10, 1999, as
contained in Exhibit 3(i) herein.
4.16 Specimen copy of Certificate relating to the Series 15
Class O Convertible Preferred Stock.
4.17 Certificate of Designations of Series 16 Class P
Convertible Preferred Stock, dated August 10, 1999, as
contained in Exhibit 3(i) herein.
4.18 Specimen copy of Certificate relating to the Series 16
Class P Convertible Preferred Stock.
27 Financial Data Sheet
(b) Reports on Form 8-K
___________________
A current report on Form 8-K (Item 5 - Other Events), dated
June 1, 1999, was filed by the Company reporting (i) the Company's
entry into a Stock Purchase Agreement ("Chem-Con Stock Purchase
Agreement") with Chemical Conservation Corporation; a Florida
corporation ("Chemical Florida"); Chemical Conservation of Georgia,
Inc., a Georgia corporation ("Chemical Georgia"); The Thomas P.
Sullivan Living Trust, dated September 6, 1978 ("TPS Trust"); The
Ann L. Sullivan Living Trust, dated September 6, 1978 ("ALS
Trust"); Thomas P. Sullivan, an individual ("TPS"); and Ann L.
Sullivan, an individual, wherein the Company agreed to purchase all
of the outstanding capital stock of Chemical Florida and Chemical
Georgia from the ALS Trust pursuant to the terms of the Chem-Con
Stock Purchase Agreement, and (ii) the Company's entry into a Stock
Purchase Agreement ("Chem-Met Stock Purchase Agreement") with Chem-
Met Services, Inc., a Michigan corporation ("Chem-Met"), the TPS
Trust, the ALS Trust, TPS and ALS wherein the Company agreed to
purchase all of the outstanding capital stock of Chem-Met from the
TPS Trust pursuant to the terms of the Chem-Met Stock Purchase
Agreement.
32
<PAGE>
A current report on Form 8-K (Item 5 - Other Events), dated
April 8, 1999, was filed by the Company reporting the amendment of
the letter of intent regarding the proposed acquisition of Chemical
Florida, Chemical Georgia and Chem-Met.
A current report on Form 8-K/A (Item 5 - Other Events), dated
June 1, 1999, was filed on August 16, 1999, by the Company
reporting (i) the audited combined financial statements of Chemical
Florida, Chemical Georgia and Chem-Met and the unaudited interim
combined financial statements of Chemical Florida, Chemical Georgia
and Chem-Met required by Rule 3-05(b) of Regulation S-X, as
promulgated pursuant to the Securities Act and the Securities
Exchange Act of 1934,as amended (the "Exchange Act") and (ii) the
unaudited pro forma financial information required by Article 11of
Regulation S-X, as promulgated pursuant to the Securities Act and
the Exchange Act.
33
<PAGE>
<PAGE>
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, thereunto duly authorized.
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.
Date: August 19, 1999 By: /s/ Louis F. Centofanti
_____________________________
Dr. Louis F. Centofanti
Chairman of the Board
Chief Executive Officer
By: /s/ Richard T. Kelecy
_____________________________
Richard T. Kelecy
34
<PAGE>
<PAGE>
EXHIBIT INDEX
_____________
Exhibit Sequential
Number Description Page No.
_______ ___________ __________
3(i) Restated Certificate of Incorporation,
as amended, and all Certificates of
Designations. 37
4.1 Exchange Agreement exchanging 1,769
shares of Series 3 Class C Convertible
Preferred Stock, Par Value $.001 per
share of Perma-Fix Environmental Services,
Inc. for 1,769 shares of Series 11
Class K Convertible Preferred Stock, Par
Value $.001 per share of Perma-Fix
Environmental Services, Inc. dated July 15,
1999, between the Company and RBB Bank
Aktiengesellschaft. 264
4.2 Exchange Agreement exchanging 916 shares
of Series 8 Class H Convertible Preferred
Stock, Par Value $.001 per share of Perma-
Fix Environmental Services, Inc. for 916
shares of Series 12 Class L Convertible
Preferred Stock, Par Value $.001 per share
of Perma-Fix Environmental Services, Inc.
dated July 15, 1999, between the Company
and RBB Bank Aktiengesellschaft. 285
4.3 Exchange Agreement exchanging 2,252 shares
of Series 10 Class J Convertible Preferred
Stock, Par Value $.001 per share of Perma-
Fix Environmental Services, Inc. for 2,252
shares of Series 13 Class Convertible
Preferred Stock, Par Value $.001 per share
of Perma-Fix Environmental Services, Inc.
dated July 15, 1999, between the Company
and RBB Bank Aktiengesellschaft. 306
4.4 Certificate of Designations of Series 11
Class K Convertible Preferred Stock, dated
July 15, 1999, as contained in Exhibit 3(i)
herein.
4.5 Specimen copy of Certificate relating to
the Series 11 Class K Convertible Preferred
Stock. 333
4.6 Certificate of Designations of Series 12
Class L Convertible Preferred Stock, dated
July 15, 1999, as contained in Exhibit 3(i)
herein.
4.7 Specimen copy of Certificate relating to the
Series 12 Class L Convertible Preferred Stock. 334
4.8 Certificate of Designations of Series 13
Class M Convertible Preferred Stock, dated
July 15, 1999, as contained in Exhibit 3(i)
herein.
4.9 Specimen copy of Certificate relating to the
Series 13 Class M Convertible Preferred Stock. 335
4.10 Exchange Agreement exchanging 1,769 shares of
Series 11 Class K Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix
Environmental Services, Inc. for 1,769 shares
of Series 14 Class N Convertible Preferred
Stock, Par Value $.001 per share of Perma-Fix
Environmental Services, Inc. dated August 3,
1999, between the Company and RBB Bank
Aktiengesellschaft. 336
4.11 Exchange Agreement exchanging 616 shares of
Series 12 Class L Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix
Environmental Services, Inc. for 616 shares of
Series 15 Class O Convertible Preferred Stock,
Par Value $.001 per share of Perma-Fix
Environmental Services, Inc. dated August 3,
1999, between the Company and RBB Bank
Aktiengesellschaft. 363
4.12 Exchange Agreement exchanging 1,802 shares
of Series 13 Class M Convertible Preferred
Stock, Par Value $.001 per share of Perma-
Fix Environmental Services, Inc. for 1,802
shares of Series 16 Class P Convertible
Preferred Stock, Par Value $.001 per share
of Perma-Fix Environmental Services, Inc.
dated August 3, 1999, between the Company
and RBB Bank Aktiengesellschaft. 377
<PAGE>
4.13 Certificate of Designations of Series 14
Class N Convertible Preferred Stock, dated
August 10, 1999, as contained in Exhibit
3(i) herein.
4.14 Specimen copy of Certificate relating to
the Series 14 Class N Convertible Preferred
Stock. 378
4.15 Certificate of Designations of Series 15
Class O Convertible Preferred Stock, dated
August 10, 1999, as contained in Exhibit
3(i) herein.
4.16 Specimen copy of Certificate relating to
the Series 15 Class O Convertible Preferred
Stock. 379
4.17 Certificate of Designations of Series 16
Class P Convertible Preferred Stock, dated
August 10, 1999, as contained in Exhibit
3(i) herein.
4.18 Specimen copy of Certificate relating to
the Series 16 Class P Convertible Preferred
Stock. 380
27 Financial Data Sheet 381
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 RESTATED CERTIFICATE OF "NATIONAL
ENVIRONMENTAL INDUSTRIES, LTD." FILED IN THIS OFFICE ON THE TWENTY-
SIXTH DAY OF NOVEMBER, A.D. 1991 AT 10 O'CLOCK A.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244151
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
NATIONAL ENVIRONMENTAL INDUSTRIES, LTD.
1. The present name of the corporation (hereinafter
called the "Corporation") is National Environmental Industries,
Ltd., and the date of filing the original certificate of
incorporation of the Corporation with the Secretary of State of the
State of Delaware is December 19, 1990.
2. The certificate of incorporation of the Corporation
is hereby amended by striking out Articles FOURTH through NINTH
thereof and by substituting in lieu thereof new Articles FOURTH
through NINTH as set forth in the Restated Certificate of
Incorporation hereinafter provided for.
3. The provisions of the certificate of incorporation
as heretofore amended and/or supplemented, and as herein amended,
are hereby restated and integrated into the single instrument which
is hereinafter set forth, and which is entitled Restated
Certificate of Incorporation of National Environmental Industries,
Ltd. without any further amendment other than the amendment
certified herein and without any discrepancy between the provisions
of the certificate of incorporation as heretofore amended and
supplemented and the provisions of the said single instrument
hereinafter set forth.
<PAGE>
4. The amendment and restatement of the certificate of
incorporation herein certified have been duly adopted by the
stockholders in accordance with the provisions of Sections 228, 242
and 245 of the General Corporation Law of the State of Delaware.
Prompt written notice of the adoption of the amendment and of the
restatement of the certificate of incorporation herein certified
has been given to those stockholders who have not consented in
writing thereto, as provided in Section 228 of the General
Corporation Law of the State of Delaware.
5. The certificate of incorporation of the Corporation,
as amended and restated herein, shall at the effective time of this
Restated Certificate of Incorporation, read as follows:
"Restated Certificate of Incorporation
of
National Environmental Industries, Ltd.
FIRST: The name of the Corporation is National
Environmental Industries, Ltd.
SECOND: The address of the Corporation's registered
office in the State of Delaware is 32 Loockerman Square, Suite L-
100, City of Dover, County of Dover. The name of its registered
agent at such address is The Prentice-Hall Corporation System, Inc.
2
<PAGE>
THIRD: The purpose of the Corporation is to engage in
any lawful act or activity for which a corporation may be organized
under the laws of the General Corporation Law of the State of
Delaware.
FOURTH: The total number of shares of capital stock
which the Corporation shall have authority to issue is Twenty-Two
Million (22,000,000) shares, of which Twenty Million (20,000,000)
shares shall be Common Stock, par value $.001 per share, and Two
Million (2,000,000) shares shall be Preferred Stock, $.001 par
value per share.
The Preferred Stock may be issued from time to time in
one or more series. The Board of Directors is hereby expressly
authorized to provide, by resolution or resolutions duly adopted by
it prior to issuance, for the creation of each such series and to
fix the designation and the powers, preferences, rights,
qualifications, limitations and restrictions relating to the shares
of each such series. The authority of the Board of Directors with
respect to each such series of Preferred Stock shall include, but
not be limited to, determining the following:
(a) the designation of such series, the number of shares
to constitute such series and the stated value if different
from the par value thereof;
(b) whether the shares of such series shall have voting
rights, in addition to any voting rights provided by law, and,
if so, the terms of such voting rights, which may be general
or limited;
3
<PAGE>
(c) the dividends, if any, payable on such series,
whether any such dividends shall be cumulative, and, if so,
from what dates, the conditions and dates upon which such
dividends shall be payable, and the preference or relation
which such dividends shall bear to the dividends payable on
any shares of stock of any other class or any other series of
Preferred Stock;
(d) whether the shares of such series shall be subject
to redemption by the Corporation, and, if so, the times,
prices and other conditions of such redemption;
(e) the amount or amounts payable upon shares of such
series upon, and the rights of the holders of such series in,
the voluntary or involuntary liquidation, dissolution or
winding up, or upon any distribution of the assets of the
Corporation;
(f) whether the shares of such series shall be subject
to the operation of a retirement or sinking fund and, if so,
the extent to and manner in which any such retirement or
sinking fund shall be applied to the purchase or redemption of
the shares of such series for retirement or other corporate
purposes and the terms and provisions relating to the
operation thereof;
4
<PAGE>
(g) whether the shares of such series shall be
convertible into, or exchangeable for, shares of stock of any
other class or any other series of Preferred Stock or any
other securities and, if so, the price or prices or the rate
or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of
conversion or exchange;
(h) the limitations and restrictions, if any, to be
effective while any shares of such series are outstanding upon
the payment of dividends or the making of other distributions
on, and upon the purchase, redemption or other acquisition by
the Corporation of, the Common Stock or shares of stock of any
other class or any other series of Preferred Stock;
(i) the conditions or restrictions, if any, upon the
creation of indebtedness of the Corporation or upon the issue
of any additional stock, including additional shares of such
series or of any other series of Preferred Stock or of any
other class; and
(j) any other powers, preferences and relative
participating, optional and other special rights, and any
qualifications, limitations and restrictions thereof.
The powers, preferences and relative, participating,
optional and other special rights of each series of Preferred
Stock, and the qualifications, limitations or restrictions thereof,
5
<PAGE>
if any, may differ from those of any and all other series at any
time outstanding. All shares of any one series of Preferred Stock
shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different
times may differ as to the dates from which dividends thereof shall
be cumulative.
FIFTH: Unless required by law or determined by the
chairman of the meeting to be advisable, the vote by stockholders
on any matter, including the election of directors, need not be by
written ballot.
SIXTH: The Corporation reserves the right to increase or
decrease its authorized capital stock, or any class or series
thereof, and to reclassify the same, and to amend, alter, change or
repeal any provision contained in the Certificate of Incorporation
under which the Corporation is organized or in any amendment
thereto, in the manner now or hereafter prescribed by law, and all
rights conferred upon stockholders in said Certificate of
Incorporation or any amendment thereto are granted subject to the
aforementioned reservation.
SEVENTH: The Board of Directors shall have the power at
any time, and from time to time, to adopt, amend and repeal any and
all By-Laws of the Corporation.
<PAGE>
EIGHTH: All persons who the Corporation is empowered to
indemnify pursuant to the provisions of Section 145 of the General
6
<PAGE>
Corporation Law of the State of Delaware (or any similar provision
or provisions of applicable law at the time in effect), shall be
indemnified by the Corporation to the full extent permitted
thereby. The foregoing right of indemnification shall not be
deemed to be exclusive of any other rights to which those seeking
indemnification maybe entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise. No repeal
or amendment of this Article EIGHTH shall adversely affect any
rights of any person pursuant to this Article Eighth which existed
at the time of such repeal or amendment with respect to acts or
omissions occurring prior to such repeal or amendment.
NINTH: No director of the Corporation shall be
personally liable to the Corporation or its stockholders for any
monetary damages for breaches of fiduciary duty as a director,
provided that this provisions shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) under Section 174 of the
General Corporation Law of the State of Delaware; or (iv) for any
transaction from which the director derived an improper personal
benefit. No repeal or amendment of this Article NINTH shall
adversely affect any rights of any person pursuant to this Article
7
<PAGE>
NINTH which existed at the time of such repeal or amendment with
respect to acts or omissions occurring prior to such repeal or
amendment."
IN WITNESS WHEREOF, we have signed this Certificate this
22nd day of November, 1991.
/s/ Louis Centofanti
____________________________________
President
ATTEST:
/s/ Carol A. Dixon
______________________
Secretary
8
<PAGE>
<PAGE>
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 AMENDMENT OF "NATIONAL ENVIRONMENTAL
INDUSTRIES, LTD.," CHANGING ITS NAME FROM "NATIONAL ENVIRONMENTAL
INDUSTRIES, LTD." TO "PERMA-FIX ENVIRONMENTAL SERVICES, INC.,"FILED
IN THIS OFFICE ON THE SEVENTEENTH DAY OF DECEMBER, A.D. 1991, AT
4:30 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244150
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
NATIONAL ENVIRONMENTAL INDUSTRIES, LTD.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is National Environmental Industries, Ltd.
2. The Restated Certificate of Incorporation is hereby
amended by striking out Article FIRST thereof and by substituting
in lieu of said Article FIRST the following new Article:
"FIRST: The name of the Corporation is
Perma-Fix Environmental Services, Inc."
3. The amendment of the Certificate of Incorporation
herein certified has been duly adopted in accordance with the
provisions of Sections 228 and 242 of the General Corporation Law
of the State of Delaware. Prompt written notice of the adoption of
the amendment herein certified has been given to those stockholders
who have not consented in writing thereto, as provided in Section
228 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, we have signed this Certificate this
16th day of December, 1991.
/s/ Louis Centofanti
______________________________
Louis Centofanti, President
ATTEST:
/s/ Mark Zwecker
_________________________
Mark Zwecker, Secretary
<PAGE>
<PAGE>
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 AMENDMENT OF "PERMA-FIX ENVIRONMENTAL
SERVICES, INC." FILED IN THIS OFFICE ON THE FOURTH DAY OF
SEPTEMBER, A.D. 1992, AT 11:30 O'CLOCK A.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244149
2249849 8100 Date: 05/24/1993
981311720
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Perma-Fix Environmental Services, Inc., a Delaware
corporation (the "Corporation"), does hereby certify:
That the amendment set forth below to the Corporation's
Restated Certificate of Incorporation, as amended, was duly adopted
in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware and written notice thereof
has been given as provided in Section 228 thereof:
I) The first paragraph of Article FOURTH of the
Corporation's Restated Certificate of Incorporation, as amended, is
hereby deleted and replaced in its entirety by the following:
Fourth: The total number of shares of capital
stock that the Corporation shall have authority to
issue is 22,000,000 shares of which 20,000,000
shares of the par value of $.001 per share shall be
designated Common Stock ("Common Stock"), and
2,000,000 shares of the par value of $.001 per
share shall be designated Preferred Stock.
As of September 4, 1992 (the "Effective Time"),
each share of Common Stock issued and outstanding
immediately prior to the Effective Time shall
automatically be changed and converted, without any
action on the part of the holder thereof, into
1/3.0236956 of a share of Common Stock and, in
connection with fractional interests in shares of
Common Stock of the Corporation, each holder whose
aggregate holdings of shares of Common stock prior
to the Effective Time amounted to less than
3.0236956, or to a number not evenly divisible by
<PAGE>
3.0236956 shares of Common Stock shall be entitled
to receive for such fractional interest, and at
such time, any such fractional interest in shares
of Common Stock of the Corporation shall be
converted into the right to receive, upon surrender
of the stock certificates formerly representing
shares of Common Stock of the Corporation, one
whole share of Common Stock.
<PAGE>
IN WITNESS whereof, Perma-Fix Environmental Services,
Inc. has caused this Certificate to be signed and attested to by
its duly authorized officers as of this first day of September,
1992.
Perma-Fix Environmental Services, Inc.
By: /s/ Louis Centofanti
_____________________________________
Dr. Louis F. Centofanti
President
ATTEST:
By: /s/ Mark Zwecker
___________________
Secretary
<PAGE>
<PAGE>
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 SIXTH DAY OF FEBRUARY,
A.D. 1996, AT 4 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244148
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES I CLASS A 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 Certificate of Incorporation, as
amended, and pursuant to the provisions of Section 151 of the
Delaware Corporation Law, said Board of Directors, acting by
unanimous written consent in lieu of a meeting dated February 2,
1996, hereby adopted the terms of the Series I Class A Preferred
Stock, which resolutions are set forth on the attached page.
Dated: February 2, 1996
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By /s/ Louis F. Centofanti
_____________________________________
Dr. Louis F. Centofanti
Chairman of the Board
ATTEST:
/s/ Mark A. Zwecker
__________________________
Mark A. Zwecker, 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 I CLASS A
PREFERRED STOCK
WHEREAS,
A. The Corporation's share capital includes Preferred Stock, par
value $.001 per share ("Preferred Stock"), which Preferred
Stock may be issued in one or more series with the directors
of the Corporation (the "Board") 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, privileges,
restrictions and conditions attaching to the shares of each
such series; and
B. 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 I Class A Preferred Stock, par value $.001.
NOW, THEREFORE, BE IT RESOLVED, THAT:
The Series I Class A Preferred Stock, par value $.001 (the
"Series I Class A Preferred Stock") of the Corporation shall
consist of 1,100 shares and no more and shall be designated as
the Series I Class A Preferred Stock and in addition to the
preferences, rights, privileges, restrictions and conditions
attaching to all the Series I Class A Preferred Stock as a
series, the rights, privileges, restrictions and conditions
attaching to the Series I Class A Preferred Stock shall be as
follows:
Part 1 - Voting and Preemptive Rights.
1.1 Except as otherwise provided herein, in the Certificate of
Incorporation (the "Articles") or the General Corporation Law of
the State of Delaware (the "GCL"), each holder of Series I Class A
Preferred Stock, by virtue of his ownership thereof, shall be
entitled to cast that number of votes per share thereof on each
matter submitted to the Corporation's shareholders for voting which
equals the number of votes which could be cast by such holder of
the number of shares of the Corporation's Common Stock, par value
$.001 per share (the "Common Shares") into which such shares of
Series I Class A Preferred Stock would be converted into pursuant
to Part 5 hereof immediately prior to the record date of such vote.
The outstanding Series I Class A Preferred Stock and the Common
Shares of the Corporation shall vote together as a single class,
except as otherwise expressly required by the GCL or Part 7 hereof.
The Series I Class A Preferred Stock shall not have cumulative
voting rights.
<PAGE>
1.2 The Series I Class A 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 If the Corporation shall be voluntarily or involuntarily
liquidated, dissolved or wound up at any time when any Series I
Class A Preferred Stock shall be outstanding, the holders of the
then outstanding Series I Class A Preferred Stock shall have a
preference in distribution of the Corporation's property available
for distribution to the holders of the Common Shares equal to
$1,000 consideration per outstanding share of Series I Class A
Preferred Stock, together with an amount equal to all unpaid
dividends accrued thereon, if any, to the date of payment of such
distribution, whether or not declared by the Board; provided,
however, that the merger of the Corporation with any corporation or
corporations in which the Corporation is not the survivor, or the
sale or transfer by the Corporation of all or substantially all of
its property, or any reduction by at least seventy percent (70%) of
the then issued and outstanding Common Shares of the Corporation,
shall be deemed to be a liquidation of the Corporation within the
meaning of any of the provisions of this Part 2.
2.2 Subject to the provisions of Part 6 hereof, all amounts to be
paid as preferential distributions to the holders of Series I Class
A 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 Common Shares, whether now or hereafter
authorized, in connection with such liquidation, dissolution or
winding up.
Part 3 - Dividends.
3.1 Holders of record of Series I Class A Preferred Stock, out of
funds legally available therefor and to the extent permitted by
law, shall be entitled to receive dividends on their Series I Class
A Preferred Stock, which dividends shall accrue at the rate per
share of five percent (5%) per annum of consideration paid for each
share of Series I Class A Preferred Stock ($50.00 per share per
year for each full year) commencing on the date of the issuance
thereof, payable, at the option of the Corporation, (i) in cash, or
(ii) by the issuance of that number of whole Common Shares computed
by dividing the amount of the dividend by the market price
applicable to such dividend.
3.2 For the purposes of this Part 3 and Part 4 hereof, "market
price" means the average of the daily closing prices of Common
Shares for a period of five (5) consecutive trading days ending on
the date on which any dividend becomes payable or of any notice of
redemption as the case may be. The closing price for each trading
day shall be (i) for any period during which the Common Shares
shall be listed for trading on a national securities exchange, the
last reported bid price per share of Common Shares as reported by
-2-
<PAGE>
<PAGE>
the primary stock exchange, or the Nasdaq Stock Market, if the
Common Shares are quoted on the Nasdaq Stock Market, or (ii) if
last sales price information is not available, the average closing
bid price of Common Shares as reported by the Nasdaq Stock Market,
or if not so listed or reported, then as reported by National
Quotation Bureau, Incorporated, or (iii) in the event neither
clause (i) nor (ii) is applicable, the average of the closing bid
and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc., selected from time to time
by the Corporation for that purpose.
3.3 Dividends on Series I Class A Preferred Stock shall be
cumulative, and no dividends or other distributions shall be paid
or declared and set aside for payment on the Common Shares until
full cumulative dividends on all outstanding Series I Class A
Preferred Stock shall have been paid or declared and set aside for
payment.
3.4 Dividends shall be payable in arrears, at the rate of $12.50
per share for each full calendar quarter on each February 28, May
31, August 31, and November 30 of each calendar year, to the
holders of record of the Series I Class A Preferred Stock as they
appear in the securities register of the Corporation on such record
dates not more than sixty (60) nor less than ten (10) days
preceding the payment date thereof, as shall be fixed by the Board;
provided, however, that the initial dividend for the Series I Class
A Preferred Stock shall accrue for the period commencing on the
date of the issuance thereof to and including December 31, 1995.
3.5 If, in any quarter, insufficient funds are available to pay
such dividends as are then due and payable with respect to the
Series I Class A Preferred Stock and all other classes and series
of the capital stock of the Corporation ranking in parity therewith
(or such payment is otherwise prohibited by provisions of the GCL,
such funds as are legally available to pay such dividends shall be
paid or Common Shares will be issued as stock dividends to the
holders of Series I Class A Preferred Stock and to the holders of
any other series of Class A Preferred Stock then outstanding as
provided in Part 6 hereof, in accordance with the rights of each
such holder, and the balance of accrued but undeclared and/or
unpaid dividends, if any, shall be declared and paid on the next
succeeding dividend date to the extent that funds are then legally
available for such purpose.
Part 4 - Redemption.
4.1 At any time, and from time to time, on and after one hundred
twenty (120) days from the date of the issuance of any Series I
Class A Preferred Stock, if the average of the closing bid prices
for the Common Shares for five (5) consecutive trading days shall
be in excess of $1.50, the Corporation may, at its sole option, but
shall not be obligated to, redeem, in whole or in part, the then
outstanding Series I Class A Preferred Stock at a price per share
of U. S. $1,000 each (the "Redemption Price") (such price to be
adjusted proportionately in the event of any change of the Series
I Class A Shares into a different number of Shares).
<PAGE>
4.2 Thirty (30) days prior to any date stipulated by the
Corporation for the redemption of Series I Class A 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 I Class A Preferred Stock. The Redemption Notice shall
state: (i) the Redemption Date of such Shares, (ii) the number of
-3-
<PAGE>
Series I Class A 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 I Class A Preferred Stock to be
redeemed from such holder, and (iv) instructions as to how to
specify to the Corporation the number of Series I Class A Preferred
Stock to be redeemed as provided in this Part 4, and the number of
shares to be converted into Common Shares as provided in Part 5
hereof.
4.3 Upon receipt of the Redemption Notice, any Eligible Holder (as
defined in Section 5.2 hereof) shall have the option, at its sole
election, to specify what portion of its Series I Class A Preferred
Stock called for redemption in the Redemption Notice shall be
redeemed as provided in this Part 4 or converted into Common Shares
in the manner provided in Part 5 hereof, except that,
notwithstanding any provision of such Part 5 to the contrary, any
Eligible Holder shall have the right to convert into Common Shares
that number of Series I Class A Preferred Stock called for
redemption in the Redemption Notice.
4.4 On or before the Redemption Date in respect of any Series I
Class A 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 5.5 hereof, to the order of the person whose name
appears on such certificate or certificates as the owner thereof,
and each surrendered share certificate shall be canceled and
retired. 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 I Class A Shares which are not
being redeemed to be registered in the names of the persons whose
names appear as the owners on the respective surrendered share
certificates and deliver such certificate to such person.
4.5 On the Redemption Date in respect of any Series I Class A
Shares 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 I Class A Shares in
respect of which the Corporation has received notice from the
Eligible Holder thereof of its election to convert Series I Class
A Shares in to Common Shares), 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 share 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
-4-
<PAGE>
for redemption shall be entitled to receive payment of the
Redemption Price in respect of their shares only from the
Corporation.
Part 5 - Conversion.
5.1 For the purposes of conversion of the Series I Class A
Preferred Stock shall be valued at $1,000 per share ("Value"), and,
if converted, the Series I Class A Preferred Stock shall be
converted into such number of Common Shares (the "Conversion
Shares") as is obtained by dividing the aggregate Value of the
shares of Series I Class A Preferred Stock being so converted,
together with all accrued but unpaid dividends thereon, by the
"Average Stock Price" per share of the Conversion Shares (the
"Conversion Price"), subject to adjustment pursuant to the
provisions of this Part 5. For purposes of this Part 5, the
"Average Stock Price" means the lesser of (x) seventy percent
(70%) of the average daily closing bid prices of the Common Shares
for the period of five (5) consecutive trading days immediately
preceding the date of subscription by the Holder or (y) seventy
percent (70%) of the daily average closing bid prices of Common
Shares for the period of five (5) consecutive trading days
immediately preceding the date of the conversion of the Series I
Class A Preferred Stock in respect of which such Average Stock
Price is determined. The closing price for each trading day shall
be determined as provided in the last sentence of Section 3.2.
5.2 Any holder of Series I Class A Preferred Stock (an "Eligible
Holder") may at any time commencing forty-five (45) days after the
issuance of any Series I Class A Preferred Stock convert up to one
hundred percent (100%) of his holdings of Series I Class A
Preferred Stock in accordance with this Part 5.
5.3 The conversion right granted by Section 5.2 hereof may be
exercised only by an Eligible Holder of Series I Class A Preferred
Stock, in whole or in part, by the surrender of the share
certificate or share certificates representing the Series I Class
A Preferred Stock to be converted at the principal office of the
Corporation (or at such other place as the Corporation may
designate in a written notice sent to the holder by first class
mail, postage prepaid, at its address shown on the books of the
Corporation) against delivery of that number of whole Common Shares
as shall be computed by dividing (1) the aggregate Value of the
Series I Class A Preferred Stock so surrendered for conversion plus
any accrued but unpaid dividends thereon, if any, by (2) the
Conversion Price in effect at the date of the conversion. At the
time of conversion of a share of the Series I Class A Preferred
Stock, the Corporation shall pay in cash to the holder thereof an
amount equal to all unpaid dividends, if any, accrued thereon to
the date of conversion, or, at the Corporation's option, issue that
number of whole Common Shares which is equal to the product of
dividing the amount of such unpaid dividends by the Average Stock
Price whether or not declared by the Board. Each Series I Class A
Preferred Stock share certificate surrendered for conversion shall
be endorsed by its holder. In the event of any exercise of the
conversion right of the Series I Class A Preferred Stock granted
herein (i) share certificate representing the Common Shares
purchased by virtue of such exercise shall be delivered to such
holder within three (3) days of notice of conversion, and (ii)
unless the Series I Class A Preferred Stock has been fully
converted, a new share certificate representing the Series I Class
-5-
<PAGE>
A Preferred Stock not so converted, if any, shall also be delivered
to such holder within three (3) days of notice of conversion. Any
Eligible Holder may exercise its right to convert the Series I
Class A Preferred Stock by telecopying an executed and completed
Notice of Conversion to the Corporation, and within seventy-two
(72) hours thereafter, delivering the original Notice of Conversion
and the certificate representing the Series I Class A Preferred
Stock to the Corporation by express courier. Each date on which a
Notice of Conversion is telecopied to and received by the
Corporation in accordance with the provisions hereof shall be
deemed a conversion date. The Corporation will transmit the Common
Shares certificates issuable upon conversion of any Series I Class
A Preferred Stock (together with the certificates representing the
Series I Class A Preferred Stock not so converted) to the Eligible
Holder via express courier within three (3) business days after the
conversion date if the Corporation has received the original Notice
of Conversion and the Series I Class A Shares certificates being so
converted by such date.
5.4 All Common Shares which may be issued upon conversion of
Series I Class A 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. At all times
that any Series I Class A Preferred Stock is outstanding, the
Corporation shall have authorized, and shall have reserved for the
purpose of issuance upon such conversion, a sufficient number of
Common Shares to provide for the conversion into Common Shares of
all Series I Class A Preferred Stock then outstanding at the then
effective Conversion Price. Without limiting the generality of the
foregoing, if, at any time, the Conversion Price is decreased, the
number of Common Shares authorized and reserved for issuance upon
the conversion of the Series I Class A Preferred Stock shall be
proportionately increased.
5.5 The number of Common Shares issued upon conversion of Series
I Class A Preferred Stock and the Conversion Price shall be subject
to adjustment from time to time upon the happening of certain
events, as follows:
5.5.1 Change of Designation of the Common Shares or the
rights, privileges, restrictions and conditions in respect of
the Common Shares or division of the Common Shares into
series. In the case of any amendment to the Articles to
change the designation of the Common Shares or the rights,
privileges, restrictions or conditions in respect of the
Common Shares or division of the Common Shares into series the
rights of the holders of the Series I Class A Preferred Stock
shall be adjusted so as to provide that upon conversion
thereof, the holder of the Series I Class A Preferred Stock
being converted shall procure, in lieu of each Common Share
theretofore issuable upon such conversion, the kind and amount
of shares, other securities, money and property receivable
upon such designation, change or division by the holder of one
Common Share issuable upon such conversion had conversion
occurred immediately prior to such designation, change or
division. The Series I Class A Preferred Stock shall be
deemed thereafter to provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments
provided for in this Part 5. The provisions of this
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<PAGE>
subsection 5.5.1 shall apply in the same manner to successive
reclassifications, changes, consolidations, and mergers.
5.5.2 If the Corporation, at any time while any of the
Series I Class A Preferred Stock is outstanding, shall amend
the Articles so as to change the Common Shares into a
different number of shares, the Conversion Price shall be
proportionately reduced, in case of such change increasing the
number of Common Shares, as of the effective date of such
increase, or if the Corporation shall take a record of holders
of its Common Shares for the purpose of such increase, as of
such record date, whichever is earlier, or the Conversion
Price shall be proportionately increased, in the case of such
change decreasing the number of Common Shares, as of the
effective date of such decrease or, if the Corporation shall
take a record of holders of its Common Stock for the purpose
of such decrease, as of such record date, whichever is
earlier.
5.5.3 If the Corporation, at any time while any of the
Series I Class A Preferred Stock is outstanding, shall pay a
dividend payable in Common Shares (except for any dividends of
Common Shares payable pursuant to Part 3 hereof), the
Conversion Price shall be adjusted, as of the date the
Corporation shall take a record of the holders of its Common
Shares for the purposes of receiving such dividend (or if no
such record is taken, as of the date of payment of such
dividend), to that price determined by multiplying the
Conversion Price therefor in effect by a fraction (1) the
numerator of which shall be the total number of Common Shares
outstanding immediately prior to such dividend, and (2) the
denominator of which shall be the total number of Common
Shares outstanding immediately after such dividend (plus in
the event that the Corporation paid cash for fractional
shares, the number of additional shares which would have been
outstanding had the Corporation issued fractional shares in
connection with said dividend).
5.6 Whenever the Conversion Price shall be adjusted pursuant to
Section 5.5 hereof, the Corporation shall make a certificate signed
by its President, or a Vice President and by its Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary, setting
forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the
Board of Directors made any determination hereunder), and the
Conversion Price after giving effect to such adjustment, and shall
cause copies of such certificates to be mailed (by first class
mail, postage prepaid) to each holder of the Series I Class A
Preferred Stock at its address shown on the books of the
Corporation. The Corporation shall make such certificate and mail
it to each such holder promptly after each adjustment.
5.7 No fractional Common Shares shall be issued in connection with
any conversion of Series I Class A Preferred Stock, but in lieu of
such fractional shares, the Corporation shall make a cash payment
therefor equal in amount to the product of the applicable fraction
multiplied by the Conversion Price then in effect.
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<PAGE>
5.8 No Series I Class A Preferred Stock which has been converted
into Common Shares shall be reissued by the Corporation; provided,
however, that each such share shall be restored to the status of
authorized but unissued Preferred Stock without designation as to
series and may thereafter be issued as a series of Preferred Stock
not designated as Series I Class A Preferred Stock.
Part 6 - Parity with Other Shares of Class A Preferred Shares.
6.1 If any cumulative dividends or accounts payable or return of
capital in respect of Series I Class A 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.
Part 7 - Amendment.
7.1 In addition to any requirement for a series vote pursuant to
the GCL in respect of any amendment to the Corporation's
Certificate of Incorporation that adversely affects the rights,
privileges, restrictions and conditions of the Series I Class A
Preferred Stock, the rights, privileges, restrictions and
conditions attaching to the Series I Class A Preferred Stock may be
amended by an amendment to the Corporation's Certificate of
Incorporation so as to affect such adversely only if the
Corporation has obtained the affirmative vote at a duly called and
held series meeting of the holders of the Series I Class A
Preferred Stock or written consent by the holders of a majority of
the Series I Class A Preferred Stock then outstanding.
Notwithstanding the above, the number of authorized shares of such
class or classes of stock may be increased or decreased (but not
below the number of shares thereof outstanding) by the affirmative
vote of the holders of a majority of the stock of the Corporation
entitled to vote thereon, voting as a single class, irrespective of
this Section 7.1.
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<PAGE>
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 TWENTIETH DAY OF
FEBRUARY, A.D. 1996, AT 10:45 O'CLOCK A.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
2249849 8100 Authentication: 9244147
Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 2 CLASS B 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 2 Class B
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 2 Class
B Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: February 16, 1996
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By /s/ Louis F. Centofanti
____________________________________
Dr. Louis F. Centofanti
Chairman of the Board
ATTEST:
/s/ Mark A. Zwecker
__________________________
Mark A. Zwecker, Secretary
<PAGE>
<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 2 CLASS B CONVERTIBLE PREFERRED STOCK
WHEREAS,
A. The Corporation's share capital includes Preferred Stock, par
value $.001 per share ("Preferred Stock"), which Preferred
Stock may be issued in one or more series with the directors
of the Corporation (the "Board") 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, privileges,
restrictions and conditions attaching to the shares of each
such series; and
B. 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 2 Class B Convertible Preferred Stock, par value
$.001.
NOW, THEREFORE, BE IT RESOLVED, THAT:
The Series 2 Class B Convertible Preferred Stock, par value
$.001 (the "Series 2 Class B Preferred Stock") of the
Corporation shall consist of 2,500 shares and no more and
shall be designated as the Series 2 Class B Preferred Stock
and in addition to the preferences, rights, privileges,
restrictions and conditions attaching to all the Series 2
Class B Preferred Stock as a series, the rights, privileges,
restrictions and conditions attaching to the Series 2 Class B
Preferred Stock shall be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Except as otherwise provided herein, in the Corporation's
Certificate of Incorporation (the "Articles") or the General
Corporation Law of the State of Delaware (the "GCL"), each holder
of Series 2 Class B Preferred Stock, by virtue of his ownership
thereof, shall be entitled to cast that number of votes per share
thereof on each matter submitted to the Corporation's shareholders
for voting which equals the number of votes which could be cast by
such holder of the number of shares of the Corporation's Common
Stock, par value $.001 per share (the "Common Shares") into which
such shares of Series 2 Class B Preferred Stock would be entitled
to be converted into pursuant to Part 5 hereof on the record date
of such vote. The outstanding Series 2 Class B Preferred Stock,
the Common Shares of the Corporation and any other series of
Preferred Stock of the Corporation having voting rights shall vote
together as a single class, except as otherwise expressly required
by the GCL or Part 7 hereof. The Series 2 Class B Preferred Stock
shall not have cumulative voting rights.
<PAGE>
1.2 The Series 2 Class B 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 If the Corporation shall be voluntarily or involuntarily
liquidated, dissolved or wound up at any time when any Series 2
Class B Preferred Stock shall be outstanding, the holders of the
then outstanding Series 2 Class B Preferred Stock shall have a
preference in distribution of the Corporation's property available
for distribution to the holders of the Common Shares equal to
$1,000 consideration per outstanding share of Series 2 Class B
Preferred Stock, together with an amount equal to all unpaid
dividends accrued thereon, if any, to the date of payment of such
distribution, whether or not declared by the Board; provided,
however, that the merger of the Corporation with any corporation or
corporations in which the Corporation is not the survivor, or the
sale or transfer by the Corporation of all or substantially all of
its property, or a reduction by at least seventy percent (70%) of
the then issued and outstanding Common Shares of the Corporation,
shall be deemed to be a liquidation of the Corporation within the
meaning of any of the provisions of this Part 2.
2.2 Subject to the provisions of Part 6 hereof, all amounts to be
paid as preferential distributions to the holders of Series 2 Class
B 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 Common Shares, whether now or hereafter
authorized, in connection with such liquidation, dissolution or
winding up.
2.3 After the payment to the holders of the shares of the Series
2 Class B Preferred Stock of the full preferential amounts provided
for in this Part 2, the holders of the Series 2 Class B Preferred
Stock as such shall have no right or claim to any of the remaining
assets of the Corporation.
2.4 In the event that the assets of the Corporation available for
distribution to the holders of shares of the Series 2 Class B
Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, shall be
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
2 Class B Preferred Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid
on account of the shares of this Series 2 Class B Preferred Stock
and shares of such other class or series ranking on a parity with
the shares of this Series 2 Class B 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.
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<PAGE>
Part 3 - Dividends.
3.1 Holders of record of Series 2 Class B Preferred Stock, out of
funds legally available therefor and to the extent permitted by
law, shall be entitled to receive dividends on their Series 2 Class
B Preferred Stock, which dividends shall accrue at the rate per
share of five percent (5%) per annum of consideration paid for each
share of Series 2 Class B Preferred Stock ($50.00 per share per
year for each full year) commencing on the date of the issuance
thereof, payable, at the option of the Corporation, (i) in cash, or
(ii) by the issuance of that number of whole Common Shares computed
by dividing the amount of the dividend by the market price
applicable to such dividend.
3.2 For the purposes of this Part 3 and Part 4 hereof, "market
price" means the average of the daily closing prices of Common
Shares for a period of five (5) consecutive trading days ending on
the date on which any dividend becomes payable or of any notice of
redemption as the case may be. The closing price for each trading
day shall be (i) for any period during which the Common Shares
shall be listed for trading on a national securities exchange, the
last reported bid price per share of Common Shares as reported by
the primary stock exchange, or the Nasdaq Stock Market, if the
Common Shares are quoted on the Nasdaq Stock Market, or (ii) if
last sales price information is not available, the average closing
bid price of Common Shares as reported by the Nasdaq Stock Market,
or if not so listed or reported, then as reported by National
Quotation Bureau, Incorporated, or (iii) in the event neither
clause (i) nor (ii) is applicable, the average of the closing bid
and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc., selected from time to time
by the Corporation for that purpose.
3.3 Dividends on Series 2 Class B Preferred Stock shall be
cumulative, and no dividends or other distributions shall be paid
or declared and set aside for payment on the Common Shares until
full cumulative dividends on all outstanding Series 2 Class B
Preferred Stock shall have been paid or declared and set aside for
payment.
3.4 Dividends shall be payable in arrears, at the rate of $12.50
per share for each full calendar quarter on each February 28, May
31, August 31, and November 30 of each calendar year, to the
holders of record of the Series 2 Class B Preferred Stock as they
appear in the securities register of the Corporation on such record
dates not more than sixty (60) nor less than ten (10) days
preceding the payment date thereof, as shall be fixed by the Board;
provided, however, that the initial dividend for the Series 2 Class
B Preferred Stock shall accrue for the period commencing on the
date of the issuance thereof.
3.5 If, in any quarter, insufficient funds are available to pay
such dividends as are then due and payable with respect to the
Series 2 Class B Preferred Stock and all other classes and series
of the capital stock of the Corporation ranking in parity therewith
(or such payment is otherwise prohibited by provisions of the GCL,
such funds as are legally available to pay such dividends shall be
paid or Common Shares will be issued as stock dividends to the
holders of Series 2 Class B Preferred Stock and to the holders of
any other series of Class B Preferred Stock then outstanding as
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<PAGE>
provided in Part 6 hereof, in accordance with the rights of each
such holder, and the balance of accrued but undeclared and/or
unpaid dividends, if any, shall be declared and paid on the next
succeeding dividend date to the extent that funds are then legally
available for such purpose.
Part 4 - Redemption.
4.1 At any time, and from time to time, on and after one hundred
twenty (120) days from the date of the issuance of any Series 2
Class B Preferred Stock, if the average of the closing bid prices
for the Common Shares for five (5) consecutive trading days shall
be in excess of $1.50 per share, the Corporation may, at its sole
option, but shall not be obligated to, redeem, in whole or in part,
the then outstanding Series 2 Class B Preferred Stock at a price
per share of U. S. $1,000 each (the "Redemption Price") (such price
to be adjusted proportionately in the event of any change of the
Series 2 Class B Preferred Stock into a different number of shares
of Series 2 Class B Preferred Stock).
4.2 Thirty (30) days prior to any date stipulated by the
Corporation for the redemption of Series 2 Class B 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 2 Class B Preferred Stock. The Redemption Notice shall
state: (i) the Redemption Date of such shares, (ii) the number of
Series 2 Class B 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 2 Class B Preferred Stock to be
redeemed from such holder, and (iv) instructions as to how to
specify to the Corporation the number of Series 2 Class B Preferred
Stock to be redeemed as provided in this Part 4, and the number of
shares to be converted into Common Shares as provided in Part 5
hereof.
4.3 Upon receipt of the Redemption Notice, any Eligible Holder (as
defined in Section 5.2 hereof) shall have the option, at its sole
election, to specify what portion of its Series 2 Class B Preferred
Stock called for redemption in the Redemption Notice shall be
redeemed as provided in this Part 4 or converted into Common Shares
in the manner provided in Part 5 hereof, except that,
notwithstanding any provision of such Part 5 to the contrary, any
Eligible Holder shall have the right to convert into Common Shares
that number of Series 2 Class B Preferred Stock called for
redemption in the Redemption Notice.
4.4 On or before the Redemption Date in respect of any Series 2
Class B 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 4.5 hereof, to the order of the person whose name
appears on such certificate or certificates as the owner thereof,
and each surrendered share certificate shall be canceled and
retired. If a share certificate is surrendered and all the shares
evidenced thereby are not being redeemed (as described below), the
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<PAGE>
Corporation shall cause the Series 2 Class B Preferred Stock which
are not being redeemed to be registered in the names of the persons
whose names appear as the owners on the respective surrendered
share certificates and deliver such certificate to such person.
4.5 On the Redemption Date in respect of any Series 2 Class B
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 2
Class B Preferred Stock in respect of which the Corporation has
received notice from the Eligible Holder thereof of its election to
convert Series 2 Class B Preferred Stock in to Common Shares), 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 share 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 5 - Conversion.
5.1 For the purposes of conversion of the Series 2 Class B
Preferred Stock shall be valued at $1,000 per share ("Value"), and,
if converted, the Series 2 Class B Preferred Stock shall be
converted into such number of Common Shares (the "Conversion
Shares") as is obtained by dividing the aggregate Value of the
shares of Series 2 Class B Preferred Stock being so converted,
together with all accrued but unpaid dividends thereon, by the
"Average Stock Price" per share of the Conversion Shares (the
"Conversion Price"), subject to adjustment pursuant to the
provisions of this Part 5. For purposes of this Part 5, the
"Average Stock Price" means the lesser of (x) seventy percent (70%)
of the average daily closing bid prices of the Common Shares for a
period of five (5) consecutive trading days immediately preceding
the date of subscription by the Holder or (y) seventy percent (70%)
of the average daily closing bid prices of Common Shares for the
period of five (5) consecutive trading days immediately preceding
the date of the conversion of the Series 2 Class B Preferred Stock
in respect of which such Average Stock Price is determined. The
closing price for each trading day shall be determined as provided
in the last sentence of Section 3.2.
5.2 Any holder of Series 2 Class B Preferred Stock (an "Eligible
Holder") may at any time commencing forty-five (45) days after the
issuance of any Series 2 Class B Preferred Stock convert up to one
hundred percent (100%) of his holdings of Series 2 Class B
Preferred Stock in accordance with this Part 5.
-5-
<PAGE>
5.3 The conversion right granted by Section 5.2 hereof may be
exercised only by an Eligible Holder of Series 2 Class B Preferred
Stock, in whole or in part, by the surrender of the share
certificate or share certificates representing the Series 2 Class
B Preferred Stock to be converted at the principal office of the
Corporation (or at such other place as the Corporation may
designate in a written notice sent to the holder by first class
mail, postage prepaid, at its address shown on the books of the
Corporation) against delivery of that number of whole Common Shares
as shall be computed by dividing (1) the aggregate Value of the
Series 2 Class B Preferred Stock so surrendered for conversion plus
any accrued but unpaid dividends thereon, if any, by (2) the
Conversion Price in effect at the date of the conversion. At the
time of conversion of a share of the Series 2 Class B Preferred
Stock, the Corporation shall pay in cash to the holder thereof an
amount equal to all unpaid dividends, if any, accrued thereon to
the date of conversion, or, at the Corporation's option, issue that
number of whole Common Shares which is equal to the product of
dividing the amount of such unpaid dividends by the Average Stock
Price whether or not declared by the Board. Each Series 2 Class B
Preferred Stock share certificate surrendered for conversion shall
be endorsed by its holder. In the event of any exercise of the
conversion right of the Series 2 Class B Preferred Stock granted
herein (i) share certificate representing the Common Shares
purchased by virtue of such exercise shall be delivered to such
holder within three (3) days of notice of conversion, and (ii)
unless the Series 2 Class B Preferred Stock has been fully
converted, a new share certificate representing the Series 2 Class
B Preferred Stock not so converted, if any, shall also be delivered
to such holder within three (3) days of notice of conversion. Any
Eligible Holder may exercise its right to convert the Series 2
Class B Preferred Stock by telecopying an executed and completed
Notice of Conversion to the Corporation, and within seventy-two
(72) hours thereafter, delivering the original Notice of Conversion
and the certificate representing the Series 2 Class B Preferred
Stock to the Corporation by express courier. Each date on which a
Notice of Conversion is telecopied to and received by the
Corporation in accordance with the provisions hereof shall be
deemed a conversion date. The Corporation will transmit the Common
Shares certificates issuable upon conversion of any Series 2 Class
B Preferred Stock (together with the certificates representing the
Series 2 Class B Preferred Stock not so converted) to the Eligible
Holder via express courier within three (3) business days after the
conversion date if the Corporation has received the original Notice
of Conversion and the Series 2 Class B Shares certificates being so
converted by such date.
5.4 All Common Shares which may be issued upon conversion of
Series 2 Class B 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. At all times
that any Series 2 Class B Preferred Stock is outstanding, the
Corporation shall have authorized, and shall have reserved for the
purpose of issuance upon such conversion, a sufficient number of
Common Shares to provide for the conversion into Common Shares of
all Series 2 Class B Preferred Stock then outstanding at the then
effective Conversion Price. Without limiting the generality of the
foregoing, if, at any time, the Conversion Price is decreased, the
number of Common Shares authorized and reserved for issuance upon
the conversion of the Series 2 Class B Preferred Stock shall be
proportionately increased.
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<PAGE>
5.5 The number of Common Shares issued upon conversion of Series
2 Class B Preferred Stock and the Conversion Price shall be subject
to adjustment from time to time upon the happening of certain
events, as follows:
5.5.1 In the case of any amendment to the Articles to
change the designation of the Common Shares or the rights,
privileges, restrictions or conditions in respect of the
Common Shares or division of the Common Shares into series the
rights of the holders of the Series 2 Class B Preferred Stock
shall be adjusted so as to provide that upon conversion
thereof, the holder of the Series 2 Class B Preferred Stock
being converted shall procure, in lieu of each Common Share
theretofore issuable upon such conversion, the kind and amount
of shares, other securities, money and property receivable
upon such designation, change or division by the holder of one
Common Share issuable upon such conversion had conversion
occurred immediately prior to such designation, change or
division. The Series 2 Class B Preferred Stock shall be
deemed thereafter to provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments
provided for in this Part 5. The provisions of this
subsection 5.5.1 shall apply in the same manner to successive
reclassifications, changes, consolidations, and mergers.
5.5.2 If the Corporation, at any time while any of the
Series 2 Class B Preferred Stock is outstanding, shall amend
the Articles so as to change the Common Shares into a
different number of shares, the Conversion Price shall be
proportionately reduced, in case of such change increasing the
number of Common Shares, as of the effective date of such
increase, or if the Corporation shall take a record of holders
of its Common Shares for the purpose of such increase, as of
such record date, whichever is earlier, or the Conversion
Price shall be proportionately increased, in the case of such
change decreasing the number of Common Shares, as of the
effective date of such decrease or, if the Corporation shall
take a record of holders of its Common Stock for the purpose
of such decrease, as of such record date, whichever is
earlier.
5.5.3 If the Corporation, at any time while any of the
Series 2 Class B Preferred Stock is outstanding, shall pay a
dividend payable in Common Shares (except for any dividends of
Common Shares payable pursuant to Part 3 hereof), the
Conversion Price shall be adjusted, as of the date the
Corporation shall take a record of the holders of its Common
Shares for the purposes of receiving such dividend (or if no
such record is taken, as of the date of payment of such
dividend), to that price determined by multiplying the
Conversion Price therefor in effect by a fraction (1) the
numerator of which shall be the total number of Common Shares
outstanding immediately prior to such dividend, and (2) the
denominator of which shall be the total number of Common
Shares outstanding immediately after such dividend (plus in
the event that the Corporation paid cash for fractional
shares, the number of additional shares which would have been
outstanding had the Corporation issued fractional shares in
connection with said dividend).
5.6 Whenever the Conversion Price shall be adjusted pursuant to
Section 5.5 hereof, the Corporation shall make a certificate signed
by its President, or a Vice President and by its Treasurer,
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<PAGE>
Assistant Treasurer, Secretary or Assistant Secretary, setting
forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the
Board of Directors made any determination hereunder), and the
Conversion Price after giving effect to such adjustment, and shall
cause copies of such certificates to be mailed (by first class
mail, postage prepaid) to each holder of the Series 2 Class B
Preferred Stock at its address shown on the books of the
Corporation. The Corporation shall make such certificate and mail
it to each such holder promptly after each adjustment.
5.7 No fractional Common Shares shall be issued in connection with
any conversion of Series 2 Class B Preferred Stock, but in lieu of
such fractional shares, the Corporation shall make a cash payment
therefor equal in amount to the product of the applicable fraction
multiplied by the Conversion Price then in effect.
5.8 No Series 2 Class B Preferred Stock which has been converted
into Common Shares shall be reissued by the Corporation; provided,
however, that each such share shall be restored to the status of
authorized but unissued Preferred Stock without designation as to
series and may thereafter be issued as a series of Preferred Stock
not designated as Series 2 Class B Preferred Stock.
Part 6 - Parity with Other Shares of Series 2 Class B Preferred
Stock and Priority.
6.1 If any cumulative dividends or accounts payable or return of
capital in respect of Series 2 Class B 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 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 2 Class
B 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
2 Class B Preferred Stock;
6.2.2 On a parity with, or equal to, shares of this Series
2 Class B 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 2 Class B 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
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<PAGE>
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 2 Class B Preferred Stock; and,
6.2.3 Junior to shares of this Series 2 Class B Preferred
Stock, either as to dividends or upon liquidation, if such
class or series shall be Common Shares or if the holders of
shares of this Series 2 Class B 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 - Amendment.
7.1 In addition to any requirement for a series vote pursuant to
the GCL in respect of any amendment to the Articles that adversely
affects the rights, privileges, restrictions and conditions of the
Series 2 Class B Preferred Stock, the rights, privileges,
restrictions and conditions attaching to the Series 2 Class B
Preferred Stock may be amended by an amendment to the Corporation's
Certificate of Incorporation so as to affect such adversely only if
the Corporation has obtained the affirmative vote at a duly called
and held series meeting of the holders of the Series 2 Class B
Preferred Stock or written consent by the holders of a majority of
the Series 2 Class B Preferred Stock then outstanding.
Notwithstanding the above, the number of authorized shares of such
class or classes of stock may be increased or decreased (but not
below the number of shares thereof outstanding) by the affirmative
vote of the holders of a majority of the stock of the Corporation
entitled to vote thereon, voting together as a single class,
irrespective of this Section 7.1.
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<PAGE>
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 NINETEENTH DAY OF
JULY, A.D. 1996, AT 12:30 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244146
2249849 8100 Date: 08-10-98
<PAGE>
981311720
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 3 CLASS C 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 3 Class C
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 3 Class
C Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: July 17, 1996
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By /s/ Louis F. Centofanti
_____________________________________
Dr. Louis F. Centofanti
Chairman of the Board
ATTEST:
/s/ Richard T. Kelecy
____________________________
Richard T. Kelecy, Secretary
<PAGE>
<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 3 CLASS C CONVERTIBLE PREFERRED STOCK
WHEREAS,
A. The Corporation's share capital includes Preferred Stock, par
value $.001 per share ("Preferred Stock"), which Preferred
Stock may be issued in one or more series by the Board of
Directors of the Corporation (the "Board") 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, privileges,
restrictions and conditions attaching to the shares of each
such series; and
B. 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 3 Class C Convertible Preferred Stock, par value
$.001.
NOW, THEREFORE, BE IT RESOLVED, THAT:
The Series 3 Class C Convertible Preferred Stock, par value
$.001 (the "Series 3 Class C Preferred Stock") of the
Corporation shall consist of 5,500 shares and no more and
shall be designated as the Series 3 Class C Convertible
Preferred Stock, and the preferences, rights, privileges,
restrictions and conditions attaching to the Series 3 Class C
Preferred Stock shall be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided herein, in the
Corporation's Certificate of Incorporation (the "Articles") or the
General Corporation Law of the State of Delaware (the "GCL"), the
holders of the Series 3 Class C Preferred Stock shall have no
voting rights whatsoever. To the extent that under the GCL the
vote of the holders of the Series 3 Class C 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 3 Class C 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 3 Class C 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
the GCL the holders of the Series 3 Class C Preferred Stock are
entitled to vote on a matter with holders of Corporation's Common
Stock and/or any other class or series of the Corporation's voting
securities, the Series 3 Class C Preferred Stock, the Corporation's
Common Stock and all other classes or series of the Corporation's
<PAGE>
voting securities shall vote together as one class, with each share
of Series 3 Class C Preferred Stock entitled to a number of votes
equal to the number of shares of the Corporation's Common Stock
into which it is then convertible using the record date for the
taking of such vote of stockholders as the date as of which the
Conversion Price (as defined in Section 4.2 hereof) is calculated
and conversion is effected. Holders of the Series 3 Class C
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.
1.2 No Preemptive Rights. The Series 3 Class C 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 3 Class C Preferred Stock shall be
outstanding, the holders of the then outstanding Series 3 Class C
Preferred Stock shall have a preference in distribution of the
Corporation's property available for distribution to the holders of
the Corporation's Common Stock equal to $1,000 consideration per
outstanding share of Series 3 Class C Preferred Stock, 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.
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 3 Class C 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 3 Class C Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the
holders of the Series 3 Class C 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 3 Class C
Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, shall be
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
3 Class C Preferred Stock upon such dissolution, liquidation or
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<PAGE>
winding up unless proportionate distributive amounts shall be paid
on account of the shares of this Series 3 Class C Preferred Stock
and shares of such other class or series ranking on a parity with
the shares of this Series 3 Class C 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 3 Class C Preferred Stock are
entitled to receive if, when and as declared by the Board out of
funds legally available therefor, cumulative dividends, payable in
cash or Common Stock of the Corporation, par value $.001 per share
(the "Common Stock"), at the Corporation's election, at the rate of
six percent (6%) per annum of the Liquidation Value of the Series
3 Class C Preferred Stock. The Liquidation Value of the Series 3
Class C Preferred Stock shall be $1,000.00 per share (the "Dividend
Rate"). 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, 1996 (each, a "Dividend Declaration Date").
Dividends shall be paid only with respect to shares of Series 3
Class C Preferred Stock actually issued and outstanding on a
Dividend Declaration Date and to holders of record 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 3 Class
C Preferred Stock. In the event that the Corporation elects to pay
dividends in Common Stock of the Corporation, each holder of the
Series 3 Class C Preferred Stock shall receive shares of Common
Stock of the Corporation equal to the quotient of (i) the Dividend
Rate in effect on the applicable Dividend Declaration Date dividend
by (ii) the average of the 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 prior to the Dividend Declaration
Date (the "Stock Dividend Price"). Dividends on the Series 3 Class
C Preferred Stock shall be cumulative, and no dividends or other
distributions shall be paid or declared or set aside for payment on
the Common Stock until all accrued and unpaid dividends on all
outstanding shares of Series 3 Class C Preferred Stock shall have
been paid or declared and set aside for payment.
Part 4 - Conversion. The holders of the Series 3 Class C Preferred
Stock shall have rights to convert the shares of Series 3 Class C
Preferred Stock into shares of the Corporation's Common Stock, par
value $.001 per share ("Common Stock"), as follows (the "Conversion
Rights"):
4.1 Right to Convert. The Series 3 Class C Preferred Stock shall
be convertible into shares of Common Stock, as follows:
<PAGE>
4.1.1 Up to one thousand eight hundred thirty-three
(1,833) shares of Series 3 Class C 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 October 1, 1996;
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<PAGE>
4.1.2 Up to one thousand eight hundred thirty-three
(1,833) shares of Series 3 Class C Preferred Stock
may be converted at the Conversion Price at any
time on or after November 1, 1996; and,
4.1.3 Up to one thousand eight hundred thirty-four
(1,834) shares of Series 3 Class C Preferred Stock
may be converted at the Conversion Price on or
after December 1, 1996.
4.2 Conversion Price. As used herein, the term Conversion Price
shall be the product 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
(ii) seventy-five percent (75%). Notwithstanding the foregoing,
the Conversion Price shall not be (i) less than a minimum of $.75
per share ("Minimum Conversion Price") or (ii) more than a maximum
of $1.50 per share ("Maximum Conversion Price"). If, after July 1,
1996, the Corporation sustains a net loss, on a consolidated basis,
in each of two (2) consecutive quarters, as determined under
generally accepted accounting principles, the Minimum Conversion
Price shall be reduced $.25 a share, but there shall be no change
to, or reduction of, the Maximum Conversion Price. For the purpose
of determining whether the Corporation has had a net loss in each
of two (2) consecutive quarters, at no time shall a quarter that
has already been considered in such determination be considered in
any subsequent determination (as an example the third quarter of
1996 in which there is a net profit and the fourth quarter of 1996
in which there is a net loss shall be considered as two consecutive
quarters, and, as a result, the fourth quarter of 1996 shall not be
considered along with the first quarter of 1997 as two (2)
consecutive quarters, but the first quarter of 1997 must be
considered with the second quarter of 1997 for the purposes of such
determination). For the purposes of this Section 4.2, a "quarter"
is a three (3) month period ending on March 31, June 30, September
30, and December 31. If any of the outstanding shares of Series 3
Class C 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 3 Class C 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 3 Class C 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 product of dividing the
amount of such unpaid and accrued dividends to the date of
conversion on the shares of Series 3 Class C Preferred Stock so
converted by the Conversion Price in effect at the date of
conversion.
4.3 Mechanics of Conversion. Any holder of the Series 3 Class C
Preferred Stock who wishes to exercise its Conversion Rights
pursuant to Section 4.1 of this Part 4 must, if such shares are not
being held in escrow by the Corporation's attorneys, surrender the
certificate therefor at the principal executive office of the
Corporation, and give written notice, which may be via facsimile
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<PAGE>
transmission, to the Corporation at such office that it elects to
convert the same (the "Conversion Notice"). In the event that the
shares of Series 3 Class C Preferred Stock are being held in escrow
by the Corporation's attorneys, no delivery of the certificates
shall be required. No Conversion Notice with respect to any shares
of Series 3 Class C Preferred Stock can be given prior to the time
such shares of Series 3 Class C Preferred Stock are eligible for
conversion in accordance with the provision of Section 4.1 above.
Any such premature Conversion Notice shall automatically be null
and void. The Corporation shall, within five (5) business days
after receipt of an appropriate and timely Conversion Notice (and
certificate, if necessary), issue to such holder of Series 3 Class
C 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 3 Class C 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 3 Class C Preferred Stock to be converted
have been surrendered and the Conversion Notice is received by the
Corporation (or in the event that no surrender of the Certificate
is required, then only upon the receipt by the Corporation of the
Conversion Notice) (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. If the Corporation fails to deliver to the
holder or its agent the certificate representing the shares of
Common Stock that the holder is entitled to receive as a result of
such conversion within five (5) business days after receipt by the
Corporation from the holder of an appropriate and timely Conversion
Notice and certificates pursuant to the terms of this Section 4.3,
the Corporation shall pay to the holder U.S. $1,000 for each day
that the Corporation is late in delivering such certificate to the
holder or its agent.
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 3 Class C
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. If the Corporation shall declare or
pay, without consideration, any dividend on the Common Stock
payable in any right to acquire Common stock for no consideration,
then the Corporation shall be deemed to have made a dividend
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<PAGE>
payable in Common Stock in an amount of shares equal to the maximum
number of shares issuable upon exercise of such rights to acquire
Common Stock.
4.5. Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Series 3 Class C
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 3 Class C Preferred
Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 3 Class C 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 3 Class C Preferred Stock
immediately before that change.
4.6 Common Stock Duly Issued. All Common Stock which may be
issued upon conversion of Series 3 Class C 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 3 Class C Preferred Stock a notice setting forth such
adjustment or readjustment and showing in detail the facts upon
which such adjustment is based.
<PAGE>
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 3 Class C
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 3
Class C Preferred Stock in connection with such conversion.
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 3
Class C 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 3 Class C 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 3 Class C 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.
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<PAGE>
4.10 Fractional Shares. No fractional share shall be issued upon
the conversion of any share or shares of Series 3 Class C Preferred
Stock. All shares of Common Stock (including fractions thereof)
issuable upon conversion of more than one share of Series 3 Class
C 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 3 Class C
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 permitted to close.
Part 5 - Redemption.
5.1 Redemption During First 180 Days. At any time, and from time
to time, during the first one hundred eighty (180) days from the
date of issuance of the Series 3 Class C Preferred Stock, the
Corporation may, at its sole option, but shall not be obligated to,
redeem, in whole or in part, the then outstanding Series 3 Class C
Preferred Stock at a price per share of U. S. $1,300.00 each
("First Six Months Redemption Price"). The Company may exercise
such redemption by giving the holder of the Series 3 Class C
Preferred Stock written notice of such redemption at any time
during such 180-day period.
5.2 Other Rights of Redemption by the Corporation. At any time,
and from time to time, after one hundred eighty (180) days from the
date of the issuance of any Series 3 Class C Preferred Stock, if
the average of the closing bid price of the Common Stock for ten
(10) consecutive days shall be in excess of $2.50 per share, the
Corporation may, at its sole option, but shall not be obligated to,
redeem, in whole or in part, the then outstanding Series 3 Class C
Preferred Stock at a price per share of U. S. $1,000 each (the
"Redemption Price") (such price to be adjusted proportionately in
the event of any change of the Series 3 Class C Preferred Stock
into a different number of shares of Series 3 Class C Preferred
Stock).
5.3 Mechanics of Redemption. Thirty (30) days prior to any date
stipulated by the Corporation for the redemption of Series 3 Class
C 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 3 Class C Preferred Stock. The
Redemption Notice shall state: (i) the Redemption Date of such
shares, (ii) the number of Series 3 Class C 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 3 Class C
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<PAGE>
Preferred Stock to be redeemed from such holder, and (iv)
instructions as to how to specify to the Corporation the number of
Series 3 Class C Preferred Stock to be redeemed as provided in this
Part 5 and, if the Redemption Notice is mailed to the Holder after
the first one hundred eighty (180) days from the date of issuance
of the Series 3 Class C Preferred Stock, the number of shares to be
converted into Common Stock as provided in Part 4 hereof.
5.4 Rights of Conversion Upon Redemption. If the redemption
occurs pursuant to Section 5.1 hereof, the Holder of the Series 3
Class C Preferred Stock shall not have the right to convert those
outstanding shares of Series 3 Class C Preferred Stock that the
Company is redeeming after receipt of the Redemption Notice. If
the redemption occurs pursuant to Section 5.2 hereof, then, upon
receipt of the Redemption Notice, any holder of Series 3 Class C
Preferred Stock shall have the option, at its sole election, to
specify what portion of its Series 3 Class C 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, except that, notwithstanding any
provision of such Part 4 to the contrary, such holder shall have
the right to convert into Common Stock that number of Series 3
Class C Preferred Stock called for redemption in the Redemption
Notice.
5.5 Surrender of Certificates. On or before the Redemption Date
in respect of any Series 3 Class C 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 5.5
hereof, to the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each
surrendered share certificate shall be canceled and retired. 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 3 Class C 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 3
Class C 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 First Six Months Redemption Price or the Redemption
Price, whichever is applicable, of all such shares called from
redemption (less the aggregate Redemption Price for those Series 3
Class C Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to convert
Series 3 Class C 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 First Six Months
Redemption Price or the Redemption Price, whichever is applicable,
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 First Six Months Redemption Price or the Redemption Price,
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<PAGE>
whichever is applicable, 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 First Six Months Redemption Price or the
Redemption Price, whichever is applicable, in respect of their
shares only from the Corporation.
Part 6 - Parity with Other Shares of Series 3 Class C Preferred
Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends or return
of capital in respect of Series 3 Class C 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 3 Class
C 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
3 Class C Preferred Stock;
6.2.2 On a parity with, or equal to, shares of this Series
3 Class C 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 3 Class C 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 3 Class C Preferred Stock; and,
6.2.3 Junior to shares of this Series 3 Class C 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 3 Class C 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.
-9-
<PAGE>
<PAGE>
Part 7 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the Corporation's
Certificate of Incorporation would alter or change the powers,
preferences or special rights of the Series 3 Class C Preferred
Stock so as to affect such adversely, then the Corporation must
obtain the affirmative vote of such amendment to the Certificate of
Incorporation at a duly called and held series meeting of the
holders of the Series 3 Class C Preferred Stock or written consent
by the holders of a majority of the Series 3 Class C Preferred
Stock then outstanding. Notwithstanding the above, the number of
authorized shares of any class or classes of stock may be increased
or decreased (but not below the number of shares thereof
outstanding) by the affirmative vote of the holders of a majority
of the stock of the Corporation entitled to vote thereon, voting
together as a single class, irrespective of this Section 7.1 or the
requirements of Section 242 of the GCL.
7.2 Authorized. Any shares of Series 3 Class C 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.
-10-
<PAGE>
<PAGE>
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 SIXTEENTH DAY OF
DECEMBER, A.D. 1996, AT 4:30 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244145
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF ELIMINATION
OF
SERIES I CLASS A PREFERRED STOCK
AND
SERIES 2 CLASS B CONVERTIBLE PREFERRED STOCK
OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
____________________________________________
PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation
organized and existing under the Delaware General Corporation Law
of the State of Delaware (hereinafter called the "Corporation"),
hereby certifies the following:
1. That the Certificate of Designations of Series I Class A
Preferred Stock of the Corporation (the "Series I Preferred") was
filed on February 6, 1996 (the "Series I Certificate of
Designations").
2. That all outstanding shares of the Series I Preferred
have been converted into shares of common stock of the Company
pursuant to the terms and conditions of the Series I Certificate of
Designations.
3. That no shares of Series I Preferred remain outstanding.
4. That all shares of the Series I Preferred which have been
converted have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to
series, until such shares are once more designated as part of a
particular series by the Board of Directors.
5. That on September 19, 1996, the Board of Directors of the
company duly adopted the following resolution:
RESOLVED, that no authorized shares of Series
I Class A Preferred Stock remain outstanding
and no shares of Series I Class A Preferred
Stock will be issued subject to the
Certificate of Designation previously filed
with respect to the Series I Class A Preferred
Stock.
6. That the Certificate of Designations of the Series 2
Class B Convertible Preferred Stock of the Corporation (the "Series
2 Preferred") was filed on February 20, 1996 (the "Series 2
Certificate of Designations").
7. That all outstanding shares of the Series 2 Preferred
have been converted into shares of common stock of the Company
pursuant to the terms and conditions of the Series 2 Certificate of
Designations.
<PAGE>
8. That no shares of Series 2 Preferred remain outstanding.
<PAGE>
9. That all shares of the Series 2 Preferred which have been
converted have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to
series, until such shares are once more designated as part of a
particular series by the Board of Directors.
10. That on September 19, 1996, the Board of Directors of the
company duly adopted the following resolution:
RESOLVED, that no authorized shares of Series
2 Class B Preferred Stock remain outstanding
and no shares of Series 2 Class B Convertible
Preferred Stock will be issued subject to the
Certificate of Designation previously filed
with respect to the Series 2 Class B
Convertible Preferred Stock.
11. That pursuant to the provisions of Section 151(g) of the
Delaware General Corporation Law, upon the effective date of the
filing of this Certificate, this Certificate will have the effect
of eliminating from the Restated Certificate of Incorporation only
those matters set forth in the Restated Certificate of
Incorporation with respect to the Series I Class A Preferred Stock
and the Series 2 Class B Convertible Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Elimination has been
executed this 4th day of December, 1996, by the President of the
Company.
PERMA-FIX ENVIRONMENTAL
ATTEST: SERVICES, INC.
/s/ Richard T. Kelecy By /s/ Louis Centofanti
___________________________ ______________________________
Richard T. Kelecy, Secretary Dr. Louis F. Centofanti,
President
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<PAGE>
<PAGE>
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 AMENDMENT OF "PERMA-FIX ENVIRONMENTAL
SERVICES, INC.," FILED IN THIS OFFICE ON THE SIXTH DAY OF JANUARY,
A.D. 1997, AT 4:30 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244144
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
___________________________________________
Perma-Fix Environmental Services, Inc., a Delaware
corporation (the "Corporation"), for purposes of amending its
Restated Certificate of Incorporation, as amended ("Restated
Certificate of Incorporation"), as provided by Section 242 of the
Delaware General Corporation Law, does hereby certify:
1. The amendment set forth below to the Corporation's
Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware:
The first paragraph of Article Fourth of the
Corporation's Restated Certificate of Incorporation is hereby
deleted and replaced in its entirety by the following:
The total number of shares of capital stock
that the Corporation shall have authority to
issue is 52,000,000, of which 50,000,000 shall
be designated as common stock of the par value
of $.001 per share ("Common Stock") and
2,000,000 shall be designated as preferred
stock of the par value of $.001 per share
("Preferred Stock").
2. Only the first paragraph of Article Fourth is amended by
this Amendment, and the remainder of Article Fourth shall remain in
full force and effect. No other provision, paragraph or article of
the Restated Certificate of Incorporation is amended or changed by
this Amendment. The Restated Certificate of Incorporation, as
expressly amended by paragraph 1 of this Amendment, shall be in
full force and effect.
3. At a meeting of the Board of Directors held on the 19th
day of September, 1996, a resolution was duly adopted setting forth
the foregoing proposed amendment to the first paragraph of Article
Fourth of the Restated Certificate of Incorporation, declaring such
amendment to be advisable and setting the next Annual Meeting of
Stockholders for consideration thereof.
4. Thereafter, pursuant to said resolution of its Board of
Directors, the Annual Meeting of Stockholders was duly called and
held on December 12, 1996, at which meeting the necessary number of
shares as required by statute were voted in favor of such
amendment.
<PAGE>
<PAGE>
IN WITNESS whereof, Perma-Fix Environmental Services,
Inc. has caused this Certificate to be signed and attested to by
its duly authorized officers as of this 16th day of December, 1996.
Perma-Fix Environmental
Services, Inc.,
a Delaware corporation
By: /s/Louis F. Centofanti
_________________________
Dr. Louis F. Centofanti
President and
Chief Executive Officer
ATTEST:
/s/ Richard T. Kelecy
___________________________
Richard T. Kelecy,
Secretary
-2-
<PAGE>
<PAGE>
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 ELEVENTH DAY OF JUNE,
A.D. 1997, AT 11 O'CLOCK A.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 0244143
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 4 CLASS D 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 4 Class D
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 4 Class
D Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: June 9, 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>
<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 4 CLASS C 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, restrictions and
conditions 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 4 Class D Convertible Preferred Stock, par
value $.001 per share ("Series 4 Class D Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 4 Class D
Convertible Preferred Stock, par value $.001 (the "Series 4 Class
D Preferred Stock") of the Corporation shall consist of two
thousand five hundred (2,500) shares and no more and shall be
designated as the Series 4 Class D Convertible Preferred Stock, and
the preferences, rights, privileges, restrictions and conditions
attaching to the Series 4 Class D Preferred Stock shall be as
follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided in Part 7 hereof
or under the General Corporation Law of the State of Delaware (the
"GCL"), the holders of the Series 4 Class D Preferred Stock shall
have no voting rights whatsoever. To the extent that under Part 7
hereof or the GCL the vote of the holders of the Series 4 Class D
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 4 Class D 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
4 Class D 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 the GCL or Part 7 hereof, the
holders of the Series 4 Class D Preferred Stock are entitled to
vote on a matter, each share of the Series 4 Class D Preferred
Stock shall be entitled one (1) vote for each outstanding share of
Series 4 Class D Preferred Stock. Holders of the Series 4 Class D
Preferred Stock shall be entitled to notice of (and copies of proxy
materials and other information sent to stockholders) for all
-2-
<PAGE>
<PAGE>
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.
1.2 No Preemptive Rights. The Series 4 Class D 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 4 Class D Preferred Stock shall be
outstanding, the holders of the then outstanding Series 4 Class D
Preferred Stock shall have a preference in distribution of the
Corporation's property available for distribution to the holders of
the Corporation's Common Stock equal to $1,000 consideration per
outstanding share of Series 4 Class D Preferred Stock, 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.
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 4 Class D 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 4 Class D Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the
holders of the Series 4 Class D 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 4 Class D
Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, shall be
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
4 Class D Preferred Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid
on account of the shares of this Series 4 Class D Preferred Stock
and shares of such other class or series ranking on a parity with
the shares of this Series 4 Class D 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.
-3-
<PAGE>
Part 3 - Dividends.
3.1 The holders of the Series 4 Class D Preferred Stock are
entitled to receive if, when and as declared by the Board out of
funds legally available therefor, cumulative 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 4 Class D Preferred Stock (the
"Dividend Rate"). The Liquidation Value of the Series 4 Class D
Preferred Stock shall be $1,000 per outstanding share of the Series
4 Class D 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 4 Class D Preferred
Stock actually issued and outstanding on a Dividend Declaration
Date and to holders of record of the Series 4 Class D 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
4 Class D 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 4 Class D
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 4 Class D 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 4
Class D Preferred Stock shall have been paid or declared and set
aside for payment.
Part 4 - Conversion. The holders of the Series 4 Class D Preferred
Stock shall have rights to convert the shares of Series 4 Class D
Preferred Stock into shares of the Corporation's Common Stock, par
value $.001 per share ("Common Stock"), as follows (the "Conversion
Rights"):
4.1 Right to Convert. The Series 4 Class D Preferred Stock shall
be convertible into shares of Common Stock, as follows:
4.1.1 Up to one thousand two hundred fifty (1,250) shares
of Series 4 Class D 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 October 5, 1997; and,
-4-
<PAGE>
4.1.2 Up to an additional one thousand two hundred fifty
(1,250) shares of Series 4 Class D Preferred Stock
may be converted at the Conversion Price at any
time on or after November 5, 1997.
4.2 Conversion Price. Subject to the terms hereof, as used
herein, the term Conversion Price per outstanding share of
Series 4 Class D 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 4 Class D 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 4 Class D 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 4 Class D 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 4 Class D 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 4 Class D
Preferred Stock who wishes to exercise its Conversion Rights
pursuant to Section 4.1 of this Part 4 must, if such shares
are not being held in escrow by the Corporation's attorneys,
surrender the certificate therefor at the principal executive
office of the Corporation, and give written notice, which may
be via facsimile transmission, to the Corporation at such
office that it elects to convert the same (the "Conversion
Notice"). In the event that the shares of Series 4 Class D
Preferred Stock are being held in escrow by the Corporation's
attorneys, no delivery of the certificates shall be required.
No Conversion Notice with respect to any shares of Series 4
Class D Preferred Stock can be given prior to the time such
shares of Series 4 Class D 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 five (5) business days after receipt
of an appropriate and timely Conversion Notice (and
certificate, if necessary), issue to such holder of Series 4
Class D 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
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<PAGE>
contrary, all shares of Common Stock issuable upon conversion
of the Series 4 Class D 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 4 Class D Preferred Stock to be converted
have been surrendered and the Conversion Notice is received by
the Corporation (or in the event that no surrender of the
Certificate is required, then only upon the receipt by the
Corporation of the Conversion Notice) (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. If the Corporation fails to deliver to
the holder or its agent the certificate representing the
shares of Common Stock that the holder is entitled to receive
as a result of such conversion within seven (7) business days
after receipt by the Corporation from the holder of an
appropriate and timely Conversion Notice and certificates
pursuant to the terms of this Section 4.3 ("Seven (7) Business
Day Period"), then, upon the written demand of RBB Bank
Aktiengesellschaft ("RBB Bank"), the holder of the Series 4
Class D Preferred Stock, for payment of the penalty described
below in this Section 4.3, which demand must be received by
the Corporation no later than ten (10) calendar days after the
expiration of such Seven (7) Business Day Period, the
Corporation shall pay to RBB Bank the following penalty for
each business day after the Seven (7) Business Day Period
until the Corporation delivers to the holder or its agent the
certificate representing the shares of Common Stock that the
holder is entitled to receive as a result of such conversion:
business day eight (8) - U.S. $1,000; business day nine (9) -
U.S. $2,000, and each business day thereafter an amount equal
to the penalty due on the immediately preceding business day
times two (2) until the Corporation delivers to the holder or
its agent the certificate representing the shares of Common
Stock that the holder is entitled to receive as a result of
such conversion.
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 4 Class D Preferred
Stock are outstanding and prior to the date that the
Corporation's Registration Statement covering up to 1,482,000
shares of Common Stock issuable upon the conversion of the
Series 4 Class D 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
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<PAGE>
holder of each share of Series 4 Class D Preferred Stock then
outstanding shall have the right to convert such share of
Series 4 Class D 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 4 Class D
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.
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 4 Class D 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 4 Class D
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 4 Class D Preferred Stock shall be
convertible into, in lieu of the number of shares of Common
Stock which the holders of Series 4 Class D 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 4 Class D Preferred Stock immediately before that
change.
4.6 Common Stock Duly Issued. All Common Stock which may be
issued upon conversion of Series 4 Class D 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 4 Class D Preferred Stock a notice
setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment is based.
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<PAGE>
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
4 Class D 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 4 Class D Preferred Stock in connection with
such conversion.
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 4 Class D 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 4 Class D 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 4 Class D 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 4 Class D
Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series 4 Class D 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.
<PAGE>
4.11 Notices. Any notices required by the provisions of this Part
4 to be given to the holders of shares of Series 4 Class D
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 4 Class D Preferred Stock,
the Corporation may, at its sole option, but shall not be
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<PAGE>
obligated to, redeem, in whole or in part, at any time, and
from time to time, the then outstanding Series 4 Class D
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 4 Class D 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
of Four U.S. Dollars ($4.00) per share, and (b) after four (4)
years from the date of the first issuance of Series 4 Class D
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 4
Class D 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 4 Class D
Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 4
Class D 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 4 Class D Preferred Stock to
be redeemed from such holder, and (iv) instructions as to how
to specify to the Corporation the number of Series 4 Class D
Preferred Stock to be redeemed as provided in this Part 5 and,
if the Redemption Notice is mailed to the Holder after the
first one hundred eighty (180) days from the date of issuance
of the Series 4 Class D Preferred Stock, the number of shares
to be converted into Common Stock as provided in Part 4
hereof.
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 4 Class D Preferred Stock, then, upon
receipt of the Redemption Notice, any holder of Series 4 Class
D Preferred Stock shall have the option, at its sole election,
to specify what portion of its Series 4 Class D 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, except that,
notwithstanding any provision of such Part 4 to the contrary,
such holder shall have the right to convert into Common Stock
that number of Series 4 Class D Preferred Stock called for
redemption in the Redemption Notice.
5.5 Surrender of Certificates. On or before the Redemption Date
in respect of any Series 4 Class D 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, and each surrendered share certificate shall be
canceled and retired. If a share certificate is surrendered
and all the shares evidenced thereby are not being redeemed
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<PAGE>
(as described below), the Corporation shall cause the Series
4 Class D 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 4
Class D 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 4 Class D Preferred Stock in respect of which
the Corporation has received notice from the holder thereof of
its election to convert Series 4 Class D 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 4 Class D Preferred
Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends or return
of capital in respect of Series 4 Class D 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 4
Class D 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 4 Class D Preferred
Stock;
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<PAGE>
6.2.2 On a parity with, or equal to, shares of this
Series 4 Class D 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 4 Class C 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 4 Class D
Preferred Stock; and,
6.2.3 Junior to shares of this Series 4 Class D
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 4 Class D 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 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the
Corporation's Certificate of Incorporation (the
"Articles") would alter or change the powers, preferences
or special rights of the Series 4 Class D Preferred Stock
so as to affect such adversely, then the Corporation must
obtain the affirmative vote of such amendment to the
Articles at a duly called and held series meeting of the
holders of the Series 4 Class D Preferred Stock or
written consent by the holders of a majority of the
Series 4 Class D Preferred Stock then outstanding.
Notwithstanding the above or the provisions of the GCL,
the number of authorized shares of any class or classes
of stock of the Corporation may be increased or decreased
(but not below the number of shares thereof outstanding)
by the affirmative vote of the holders of a majority of
the stock of the Corporation entitled to vote thereon,
voting together as a single class, irrespective of the
provisions of this Section 7.1 or Section 242 of the GCL.
7.2 Authorized. Any shares of Series 4 Class D 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.
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<PAGE>
<PAGE>
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.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244142
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<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
Preferred Stock shall be entitled to notice of (and copies of proxy
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<PAGE>
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
insufficient to pay in full all amounts to which such holders are
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<PAGE>
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.
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<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
facsimile transmission, to the Corporation at such office that
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<PAGE>
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.
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.
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<PAGE>
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.
<PAGE>
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.
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<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.
<PAGE>
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
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<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
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<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,
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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.
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<PAGE>
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 THIRTEENTH DAY OF
NOVEMBER, A.D. 1997, AT 1:30 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244141
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 6 CLASS F 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 6 Class F
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 6 Class
F Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: November 12, 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>
<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 6 CLASS F 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, restrictions and
conditions 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 6 Class F Convertible Preferred Stock, par
value $.001 per share (the "Series 6 Class F Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 6 Class F
Preferred Stock shall consist of two thousand five hundred (2,500)
shares and no more and shall be designated as the Series 6 Class F
Convertible Preferred Stock, and the preferences, rights,
privileges, restrictions and conditions attaching to the Series 6
Class F Preferred Stock shall be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided in Part
7 hereof or under the General Corporation Law of the
State of Delaware (the "GCL"), the holders of the Series
6 Class F Preferred Stock shall have no voting rights
whatsoever. To the extent that under Part 7 hereof or
the GCL the vote of the holders of the Series 6 Class F
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 6 Class F 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 6 Class F
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 the GCL
or Part 7 hereof, the holders of the Series 6 Class F
Preferred Stock are entitled to vote on a matter, each
share of the Series 6 Class F Preferred Stock shall be
entitled one (1) vote for each outstanding share of
Series 6 Class F Preferred Stock. Holders of the Series
6 Class F 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
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<PAGE>
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.
1.2 No Preemptive Rights. The Series 6 Class F
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 6
Class F Preferred Stock shall be outstanding, the holders
of the then outstanding Series 6 Class F Preferred Stock
shall have a preference in distribution of the
Corporation's property available for distribution to the
holders of the Corporation's Common Stock equal to $1,000
consideration per outstanding share of Series 6 Class F
Preferred Stock, 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.
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 6 Class
F 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 6 Class F Preferred
Stock of the full Liquidation Preference amounts provided
for in this Part 2, the holders of the Series 6 Class F
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 6 Class F Preferred Stock upon any
dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be
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 6 Class F
Preferred Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series 6
Class F Preferred Stock and shares of such other class or
series ranking on a parity with the shares of this Series
6 Class F Preferred Stock, ratably, in proportion to the
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<PAGE>
full distributable amounts for which holders of all such
parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
Part 3 - Dividends. The holders of the Series 6 Class F
Preferred Stock are entitled to receive if, when and as
declared by the Board out of funds legally available
therefor, cumulative 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 6 Class F
Preferred Stock (the "Dividend Rate"). The Liquidation
Value of the Series 6 Class F Preferred Stock shall be
$1,000 per outstanding share of the Series 6 Class F
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 6 Class F Preferred Stock
actually issued and outstanding on a Dividend Declaration
Date and to holders of record of the Series 6 Class F
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 September 16, 1997. 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 6 Class F 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 6
Class F 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 6 Class F Preferred
Stock shall have been paid or declared and set aside for
payment.
<PAGE>
Part 4 - Conversion. The holders of the Series 6 Class
F Preferred Stock shall have rights to convert the shares
of Series 6 Class F Preferred Stock into shares of the
Corporation's Common Stock, par value $.001 per share
("Common Stock"), as follows (the "Conversion Rights"):
4.1 Right to Convert. The Series 6 Class F Preferred
Stock shall be convertible into shares of Common Stock,
as follows:
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<PAGE>
4.1.1 Up to one thousand two hundred fifty (1,250)
shares of Series 6 Class F 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 October 5, 1997; and,
4.1.2 Up to an additional one thousand two hundred
fifty (1,250) shares of Series 6 Class F
Preferred Stock may be converted at the
Conversion Price at any time on or after
November 5, 1997.
4.2 Conversion Price. Subject to the terms hereof, as
used herein, the Conversion Price per outstanding share
of Series 6 Class F Preferred Stock shall be $1.8125,
except that, in the event the average closing bid price
per share of the Common Stock for 20 of any 30
consecutive trading days after March 1, 1998 shall be
less than $2.50 as reported on the over-the-counter
market, or the closing sale price if listed on a national
securities exchange, the Conversion Price shall
thereafter 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 trading days immediately preceding the date
of the Conversion Notice referred to in Section 4.3 below
multiplied by eighty percent (80%) or (ii) $1.8125.
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 6 Class F 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 6 Class F Preferred Stock so surrendered for
conversion by (b) the Conversion Price as of such
conversion. At the time of conversion of shares of the
Series 6 Class F 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 whole shares of 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 6 Class F Preferred
Stock so converted divided by the Stock Dividend Price,
as defined in Part 3 hereof, in effect at the date of
conversion.
4.3 Mechanics of Conversion. Any holder of the Series
6 Class F Preferred Stock who wishes to exercise its
Conversion Rights pursuant to Section 4.1 of this Part 4
must, if such shares are not being held in escrow by the
Corporation's attorneys, surrender the certificate
therefor at the principal executive office of the
Corporation, and give written notice, which may be via
facsimile transmission, to the Corporation at such office
that it elects to convert the same (the "Conversion
Notice"). In the event that the shares of Series 6 Class
F Preferred Stock are being held in escrow by the
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<PAGE>
Corporation's attorneys, no delivery of the certificates
shall be required. No Conversion Notice with respect to
any shares of Series 6 Class F Preferred Stock can be
given prior to the time such shares of Series 6 Class F
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 five (5) business days after
receipt of an appropriate and timely Conversion Notice
(and certificate, if necessary), issue to such holder of
Series 6 Class F 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 6 Class F
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 6 Class F Preferred
Stock to be converted have been surrendered and the
Conversion Notice is received by the Corporation (or in
the event that no surrender of the Certificate is
required, then only upon the receipt by the Corporation
of the Conversion Notice) (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. If the
Corporation fails to deliver to the holder or its agent
the certificate representing the shares of Common Stock
that the holder is entitled to receive as a result of
such conversion within seven (7) business days after
receipt by the Corporation from the holder of an
appropriate and timely Conversion Notice and certificates
pursuant to the terms of this Section 4.3 ("Seven (7)
Business Day Period"), then, upon the written demand of
RBB Bank Aktiengesellschaft ("RBB Bank"), the holder of
the Series 6 Class F Preferred Stock, for payment of the
penalty described below in this Section 4.3, which demand
must be received by the Corporation no later than ten
(10) calendar days after the expiration of such Seven (7)
Business Day Period, the Corporation shall pay to RBB
Bank the following penalty for each business day after
the Seven (7) Business Day Period until the Corporation
delivers to the holder or its agent the certificate
representing the shares of Common Stock that the holder
is entitled to receive as a result of such conversion:
business day eight (8) - U.S. $1,000; business day nine
(9) - U.S. $2,000, and each business day thereafter an
amount equal to the penalty due on the immediately
preceding business day times two (2) until the
Corporation delivers to the holder or its agent the
certificate representing the shares of Common Stock that
the holder is entitled to receive as a result of such
conversion.
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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 6 Class F Preferred Stock are outstanding and
prior to the date that the Corporation's Registration
Statement covering up to 1,379,500 shares of Common Stock
issuable upon the conversion of the Series 6 Class F
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 6
Class F Preferred Stock then outstanding shall have the
right to convert such share of Series 6 Class F 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 6 Class F
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.
4.5 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 6 Class F 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.
4.6 Adjustments for Reclassification and Reorganization.
If the Common Stock issuable upon conversion of the
Series 6 Class F 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 shall,
concurrently with the effectiveness of such
reorganization or reclassification, be proportionately
adjusted so that the Series 6 Class F Preferred Stock
shall be convertible into, in lieu of the number of
shares of Common Stock which the holders of Series 6
Class F Preferred Stock would otherwise have been
entitled to receive, a number of shares of such other
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<PAGE>
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 6
Class F Preferred Stock immediately before that change.
4.7 Common Stock Duly Issued. All Common Stock which
may be issued upon conversion of Series 6 Class F
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.
4.8 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
6 Class F Preferred Stock a notice setting forth such
adjustment or readjustment and showing in detail the
facts upon which such adjustment is based.
4.9 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 6 Class F 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 6 Class F Preferred Stock in connection with such
conversion.
4.10 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 6 Class F 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 6 Class F 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 6 Class F 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.
4.11 Fractional Shares. No fractional shares shall be
issued upon the conversion of any share or shares of
Series 6 Class F Preferred Stock. All shares of Common
Stock (including fractions thereof) issuable upon
conversion of more than one share of Series 6 Class F
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
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<PAGE>
would result in the issuance of a fractional share of
Common Stock, such fractional share shall be rounded up
to the nearest whole share.
4.12 Notices. Any notices required by the provisions of
this Part 4 to be given to the holders of shares of
Series 6 Class F 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.
<PAGE>
4.13 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 June 9, 1997, 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 6 Class F Preferred Stock at the
following cash redemption prices per share (the
"Redemption Price") if redeemed during the following
periods: (a) within four years from June 9, 1997 - $1,300
per share, if at any time during such four year period
the average of the closing bid price of the Common Stock
for ten consecutive trading days shall be in excess of
Four Dollars ($4.00) per share, and (b) after four years
from June 9, 1997 - $1,000 per share.
5.2 Mechanics of Redemption. Thirty days prior to any
date stipulated by the Corporation for the redemption of
Series 6 Class F 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 6 Class F Preferred Stock. The Redemption Notice
shall state: (i) the Redemption Date of such shares, (ii)
the number of Series 6 Class F 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 6 Class F Preferred Stock to be
redeemed from such holder, and (iv) instructions as to
how to specify to the Corporation the number of Series 6
Class F Preferred Stock to be redeemed as provided in
this Part 5 and, if the Redemption Notice is mailed to
the Holder after the first 180 days from the date of
issuance of the Series 6 Class F Preferred Stock, the
number of shares to be converted into Common Stock as
provided in Part 4 hereof.
5.3 Rights of Conversion Upon Redemption. If the
redemption occurs after the first 180 days after the
first issuance of Series 6 Class F Preferred Stock, then,
upon receipt of the Redemption Notice, any holder of
Series 6 Class F Preferred Stock shall have the option,
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<PAGE>
at its sole election, to specify what portion of its
Series 6 Class F 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, except that, notwithstanding
any provision of such Part 4 to the contrary, such holder
shall have the right to convert into Common Stock that
number of Series 6 Class F Preferred Stock called for
redemption in the Redemption Notice.
5.4 Surrender of Certificates. On or before the
Redemption Date in respect of any Series 6 Class F
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, and each surrendered share certificate shall be
canceled and retired. 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 6 Class F 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.
5.5 Payment. On the Redemption Date in respect of any
Series 6 Class F Preferred Stock or prior thereto, the
Corporation shall deposit with any bank or trust company
having a capital and surplus of at least $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 6 Class F
Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election
to convert Series 6 Class F 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.
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<PAGE>
<PAGE>
Part 6 - Parity with Other Shares of Series 6 Class F
Preferred Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends
or return of capital in respect of Series 6 Class F
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 6 Class F 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 6 Class F Preferred
Stock;
6.2.2 On a parity with, or equal to, shares of
this Series 6 Class F 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 6
Class F 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 6
Class F Preferred Stock; and,
6.2.3 Junior to shares of this Series 6 Class F
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 6 Class
F 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.
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<PAGE>
Part 7 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the
Corporation's Certificate of Incorporation (the
"Articles") would alter or change the powers, preferences
or special rights of the Series 6 Class F Preferred Stock
so as to affect such adversely, then the Corporation must
obtain the affirmative vote of such amendment to the
Articles at a duly called and held series meeting of the
holders of the Series 6 Class F Preferred Stock or
written consent by the holders of a majority of the
Series 6 Class F Preferred Stock then outstanding.
Notwithstanding the above or the provisions of the GCL,
the number of authorized shares of any class or classes
of stock of the Corporation may be increased or decreased
(but not below the number of shares thereof outstanding)
by the affirmative vote of the holders of a majority of
the stock of the Corporation entitled to vote thereon,
voting together as a single class, irrespective of the
provisions of this Section 7.1 or Section 242 of the GCL.
7.2 Authorized. Any shares of Series 6 Class F
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.
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<PAGE>
<PAGE>
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 THIRTEENTH DAY OF
NOVEMBER, A.D. 1997, AT 1:31 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244140
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 7 CLASS G 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 7 Class G
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 7 Class
G Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: November 12, 1997
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis F. 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 7 CLASS G 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, restrictions and
conditions 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 7 Class G Convertible Preferred Stock, par
value $.001 per share (the "Series 7 Class G Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 7 Class G
Preferred Stock shall consist of three hundred (350) shares and no
more and shall be designated as the Series 7 Class G Convertible
Preferred Stock, and the preferences, rights, privileges,
restrictions and conditions attaching to the Series 7 Class G
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 7 Class G 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
7 Class G 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 7 Class G 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
7 Class G 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 7 Class G Preferred Stock are entitled to
vote on a matter, each share of the Series 7 Class G Preferred
Stock shall be entitled one (1) vote for each outstanding share of
Series 7 Class G Preferred Stock. Holders of the Series 7 Class G
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 7 Class G 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.
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<PAGE>
1.2 No Preemptive Rights. The Series 7 Class G 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 7 Class G Preferred Stock shall be
outstanding, the holders of the then outstanding Series 7 Class G
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 7 Class G 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 7 Class G 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 7 Class G Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the
holders of the Series 7 Class G 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 7 Class G
Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, shall be
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
7 Class G Preferred Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid
on account of the shares of this Series 7 Class G Preferred Stock
and shares of such other class or series ranking on a parity with
the shares of this Series 7 Class G 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 7 Class G Preferred Stock are
entitled to receive if, when and as declared by the Board of
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<PAGE>
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 7 Class G Preferred Stock (the "Dividend Rate").
The Liquidation Value of the Series 7 Class G Preferred Stock shall
be $1,000 per outstanding share of the Series 7 Class G 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 7 Class G Preferred Stock actually
issued and outstanding on a Dividend Declaration Date and to
holders of record of the Series 7 Class G 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 7 Class
G 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 7 Class G 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 7 Class G
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 7 Class G Preferred
Stock shall have been paid or declared and set aside for payment.
<PAGE>
Part 4 - Conversion. The holders of the Series 7 Class G Preferred
Stock shall have rights to convert the shares of Series 7 Class G
Preferred Stock into shares of the Corporation's Common Stock, as
follows (the "Conversion Rights"):
4.1 Right to Convert. The Series 7 Class G 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 7 Class G 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,
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<PAGE>
4.1.2 Up to an additional one hundred seventy-five (175)
shares of Series 7 Class G 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 Conversion Price per outstanding share of Series
7 Class G Preferred Stock shall be $1.8125 except that, in the
event the average closing bid price per share of the Common
Stock for 20 of any 30 consecutive trading days (a "30 Day
Period") after March 1, 1998 shall be less than $2.50 as
reported on the over-the-counter market, or the closing sale
price if listed on a national securities exchange and if the
holders of the Series 7 Class G Preferred Stock have engaged
in no sales of Common Stock of the Company during, and for 30
trading days prior to, the applicable 30 Day Period, the
Conversion Price shall thereafter 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 trading days immediately preceding the date of the
Conversion Notice referred to in Section 4.3 below multiplied
by eighty percent (80%) or (ii) $1.8125. 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
7 Class G 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 7
Class G Preferred Stock so surrendered for conversion by (b)
the Conversion Price as of such conversion. At the time of
conversion of shares of the Series 7 Class G 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 whole shares of
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 7 Class G Preferred Stock so converted
divided by the Stock Dividend Price, as defined in Part 3
hereof, in effect at the date of conversion.
4.5 Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Series 7 Class G
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 7 Class G Preferred Stock shall be
convertible into, in lieu of the number of shares of Common
Stock which the holders of Series 7 Class G 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 7 Class G Preferred Stock immediately before that
change.
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<PAGE>
4.6 Common Stock Duly Issued. All Common Stock which may be
issued upon conversion of Series 7 Class G 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 7 Class G 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
7 Class G 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 7 Class G Preferred Stock in connection with
such conversion.
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 7 Class G 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 7 Class G 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 7 Class G 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 7 Class G
Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series 7 Class G 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 7 Class G
Preferred Stock shall be deemed given if deposited in the
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<PAGE>
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 7 Class G 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 7 Class G
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 7 Class G 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
of Four U.S. Dollars ($4.00) per share, and (b) after four (4)
years from the date of the first issuance of Series 7 Class G
Preferred Stock - $1,000 per share.
<PAGE>
5.3 Mechanics of Redemption. Thirty (30) days prior to any date
stipulated by the Corporation for the redemption of Series 7
Class G 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 7 Class G
Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 7
Class G 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 7 Class G Preferred Stock to
be redeemed from such holder, and (iv) instructions as to how
to specify to the Corporation the number of Series 7 Class G
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 7 Class G Preferred Stock, then, upon
receipt of the Redemption Notice, any holder of Series 7 Class
G Preferred Stock shall have the option, at its sole election,
to specify what portion of its Series 7 Class G 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, except that,
notwithstanding any provision of such Part 4 to the contrary,
-6-
<PAGE>
such holder shall have the right to convert into Common Stock
that number of Series 7 Class G Preferred Stock called for
redemption in the Redemption Notice.
5.5 Surrender of Certificates. On or before the Redemption Date
in respect of any Series 7 Class G 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 7 Class G
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 7
Class G 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 7 Class G Preferred Stock in respect of which
the Corporation has received notice from the holder thereof of
its election to convert Series 7 Class G 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 7 Class G Preferred
Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends or return
of capital in respect of Series 7 Class G 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.
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<PAGE>
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 7
Class G 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 7 Class G Preferred
Stock;
6.2.2 On a parity with, or equal to, shares of this
Series 7 Class G 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 7 Class G 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 7 Class G
Preferred Stock; and,
6.2.3 Junior to shares of this Series 7 Class G
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 7 Class G 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 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the Corporation's
Certificate of Incorporation (the "Articles") would alter
or change the powers, preferences or special rights of the
Series 7 Class G Preferred Stock so as to affect such
adversely, then the Corporation must obtain the affirmative
vote of such amendment to the Articles at a duly called and
held series meeting of the holders of the Series 7 Class G
Preferred Stock then outstanding. Notwithstanding the above
or the provisions of the GCL, the number of authorized shares
of any class or classes of stock of the Corporation may be
increased or decreased (but not below the number of shares
-8-
<PAGE>
thereof outstanding) by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to
vote thereon, voting together as a single class, irrespective
of the provisions of this Section 7.1 or Section 242 of the
GCL.
7.2 Authorized. Any shares of Series 7 Class G 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.
-9-
<PAGE>
<PAGE>
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 TWENTY-SIXTH DAY OF
NOVEMBER, A.D. 1997, AT 10 O'CLOCK A.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244139
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF ELIMINATION
OF
SERIES 4 CLASS D CONVERTIBLE PREFERRED STOCK
AND
SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK
OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
____________________________________________
PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation
organized and existing under the General Corporation Law of the
State of Delaware (hereinafter called the "Corporation"), hereby
certifies the following:
1. That the Certificate of Designations of Series 4 Class D
Convertible Preferred Stock of the Corporation (the "Series 4
Preferred") was filed on June 11, 1997 (the "Series 4 Certificate
of Designations").
2. That all outstanding shares of the Series 4 Preferred
have been delivered to the Company and exchanged upon agreement
with the holder thereof pursuant to the terms and conditions of a
certain Exchange Agreement between the Company and RBB Bank
Aktiengesellschaft, dated effective as of September 16, 1997.
3. That no shares of Series 4 Preferred remain outstanding.
4. That all shares of the Series 4 Preferred which have been
exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to
series, until such shares are once more designated as part of a
particular series by the Board of Directors.
5. That effective September 16, 1997, the Board of Directors
of the Company duly adopted the following resolutions:
RESOLVED, that upon completion of the exchange
with the holder of the Series 4 Class D
Convertible Preferred Stock, no authorized
shares of Series 4 Class D Convertible
Preferred Stock will remain outstanding and no
shares of Series 4 Class D Convertible
Preferred Stock will be issued subject to the
Certificate of Designations previously filed
with respect to the Series 4 Class D
Convertible Preferred Stock.
FURTHER RESOLVED, that upon completion of the
exchange, the officers of the Company are
hereby authorized and directed, for and on
behalf of the Company, to execute and deliver
an appropriate Certificate of Elimination to
<PAGE>
<PAGE>
the Secretary of State of Delaware regarding
the Series 4 Class D Convertible Preferred
Stock.
6. That the Certificate of Designations of the Series 5
Class E Convertible Preferred Stock of the Corporation (the "Series
5 Preferred") was filed on July 14, 1997 (the "Series 5 Certificate
of Designations").
7. That all outstanding shares of the Series 5 Preferred
have been delivered to the Company and exchanged upon agreement
with the holder thereof pursuant to the terms and conditions of a
certain Exchange Agreement between the Company and The Infinity
Fund, L.P., dated effective as of September 16, 1997.
8. That no shares of Series 5 Preferred remain outstanding.
9. That all shares of the Series 5 Preferred which have been
exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to
series, until such shares are once more designated as part of a
particular series by the Board of Directors.
10. That effective September 16, 1997, the Board of Directors
of the Company duly adopted the following resolutions:
RESOLVED, that upon completion of the exchange
with the holder of the Series 5 Class E
Convertible Preferred Stock, no authorized
shares of Series 5 Class E Convertible
Preferred Stock will remain outstanding and no
shares of Series 5 Class E Convertible
Preferred Stock will be issued subject to the
Certificate of Designations previously filed
with respect to the Series 5 Class E
Convertible Preferred Stock.
FURTHER RESOLVED, that upon completion of the
exchange, the officers of the Company are
hereby authorized and directed, for and on
behalf of the Company, to execute and deliver
an appropriate Certificate of Elimination to
the Secretary of State of Delaware regarding
the Series 5 Class E Convertible Preferred
Stock.
11. That pursuant to the provisions of Section 151(g) of the
Delaware General Corporation Law, upon the effective date of the
filing of this Certificate, this Certificate will have the effect
of eliminating from the Restated Certificate of Incorporation only
those matters set forth in the Restated Certificate of
Incorporation with respect to the Series 4 Class D Convertible
Preferred Stock and the Series 5 Class E Convertible Preferred
Stock.
-2-
<PAGE>
IN WITNESS WHEREOF, this Certificate of Elimination has been
executed this 20th day of November, 1997, by the President of the
Company.
PERMA-FIX ENVIRONMENTAL
ATTEST: SERVICES, INC.
/s/ Richard T. Kelecy By /s/ Louis Centofanti
____________________________ ____________________________
Richard T. Kelecy, Secretary Dr. Louis F. Centofanti,
President
(SEAL)
-3-
<PAGE>
<PAGE>
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 TENTH DAY OF JULY,
A.D. 1998, AT 12 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244138
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF RIGHTS AND PREFERENCES OF THE
SERIES 10 CLASS J CONVERTIBLE PREFERRED STOCK OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
We, being respectively the President and Secretary of Perma-Fix
Environmental Services, Inc. a corporation organized and existing
under the laws of the State of Delaware (hereinafter the
"Corporation"), DO HEREBY CERTIFY:
FIRST:
That pursuant to authority expressly granted and vested in the
Board of Directors of said Corporation under Section 151 of the
Delaware General Corporation Law (the "GCL"), and the provisions of
the Corporation's Restated Certificate of Incorporation, said Board
of Directors, on June 30th, 1998 (the "Closing Date"), adopted the
following resolution setting forth the designations, powers,
preferences and rights of its Series 10 Class J Convertible
Preferred Stock (the "Certificate of Designations").
RESOLVED: That the designations, powers, preferences and rights of
the Series 10 Class J Convertible Preferred Stock be, and they
hereby are, as set forth below:
1. Number of Shares of Common Stock of Series 10 Class J
Convertible Preferred Stock
The Corporation hereby authorizes the issuance of up to 3,000
(three thousand,) shares of Series 10 Class J Convertible Preferred
Stock par value $.001 per share (the "Preferred Stock"). This
Preferred Stock shall pay an annual dividend based on a 365 day
calendar year of 4% of the Liquidation Value (as defined in Section
3 hereof) ("Dividend Rate"), payable semiannually within ten (10)
business days after each subsequent June 30th and December 31st
(each a "Dividend Declaration Date"), and shall be payable in cash
or shares of the Corporation's par value $.001 per share common
stock (Common Stock) at the Corporation's option. The first
Dividend Declaration Date shall be December 31st, 1998.
In the event that the Corporation elects to pay the accrued
dividends due as of a Dividend Declaration Date on the outstanding
shares of Preferred Stock in Common Stock of the Corporation, the
Holder of each share of Preferred Stock shall receive that 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 Corporation's Common Stock as reported
on the National Association of Securities Dealers Automated
Quotation system ("NASDAQ"), or if the Common Stock is not listed
;1
<PAGE>
for trading on the NASDAQ but is listed for trading on a national
securities exchange, the average closing bid price of the Common
Stock as quoted on such national 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 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 Preferred Stock shall have
been paid or declared and set aside for payment.
2. Voting.
(a) Except as provided under Section 242 of the GCL, holders of
Preferred Stock (the "Holders") shall not have the right to vote
on any matter. Notwithstanding the provisions of Section 242 of
the GCL or Section 4 hereof, the number of authorized shares of any
class or classes of stock of the Corporation may be increased or
decreased (but not below the number of shares thereof outstanding)
by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote thereon, voting together as a
single class, irrespective of the provisions of Section 242 of the
GCL.
3. Liquidation.
In the event of a voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the Holders of
Preferred Stock shall be entitled to receive out of the assets of
the Corporation legally available for distribution to holders of
its capital stock, before any payment or distribution shall be made
to holders of shares of Common Stock or any other class of stock
ranking junior to the Preferred Stock, an amount per share of
Preferred Stock equal to $1,000 (the "Liquidation Value") plus any
accrued and unpaid dividends on the Preferred Stock. If upon such
liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, the assets to be distributed among the
Holders of Preferred Stock shall be insufficient to permit payment
to the Holders of Preferred Stock of the amount distributable as
aforesaid, then the entire assets of the Corporation to be so
distributed shall be distributed ratably among the Holders of
Preferred Stock and shares of such other classes or series ranking
on a parity with the shares of this Preferred Stock in proportion
to the full distributable amounts for which holders of all such
parity shares are entitled upon such distribution, liquidation, or
winding up. Upon any such liquidation, dissolution or winding up
of the Corporation, after the Holders of Preferred Stock shall
have been paid in full the amounts to which they shall be entitled,
the remaining net assets of the Corporation may be distributed to
the holders of stock ranking on liquidation junior to the Preferred
Stock and the Holders of the Preferred Stock shall have no right or
claim to any of the remaining assets of the Corporation. Written
notice of such liquidation, dissolution or winding up, stating a
payment date, the amount of the liquidation payments and the place
;2
<PAGE>
where said liquidation payments shall be payable, shall be given by
mail, postage prepaid or by telex or facsimile to non-U.S.
residents, not less than 10 days prior to the payment date stated
therein, to the Holders of record of Preferred Stock, such notice
to be addressed to each such Holder at its address as shown by the
records of the Corporation. For purposes hereof the shares of
Common Stock, shall rank on liquidation junior to the Preferred
Stock.
4. Restrictions.
The Corporation will not amend or modify the terms of its Restated
Certificate of Incorporation so as to adversely alter or change the
Preferred Stock at any time when shares of Preferred Stock are
outstanding, without the approval of the Holders of at least a
majority of the then outstanding shares of Preferred Stock given in
writing or by vote at a meeting, consenting or voting (as the case
may be) separately as a series, except where the vote or written
consent of the Holders of a greater number of shares of Common
Stock of the Corporation is required by law or by the Corporation's
Certificate of Incorporation, as amended.
5. Optional Conversion.
The Holders of shares of Preferred Stock shall have the following
conversion rights to convert the shares of Preferred Stock into
shares of Common Stock of the Corporation:
(a) Conversion Dates, The Holder of any share or shares of
Preferred Stock may convert cumulatively any of such Preferred
Stock at any time subsequent to 180 days after the Closing Date.
(b) Right to Convert; Conversion Price. Subject to the terms
hereof, as used herein, the term Conversion Price per outstanding
share of Preferred Stock shall be One Dollar and 875/1000 ($1.875);
except that after the expiration of one hundred and eighty (180)
days after the Closing Date if the average of the closing bid price
per share of Common Stock quoted on the NASDAQ (or the closing bid
price of the Common Stock as quoted on the national securities
exchange if the Common Stock is not listed for trading on the
NASDAQ but is listed for trading on a national securities exchange)
for the five (5) trading days immediately prior to the particular
date of each Conversion Notice (as defined below) is less than Two
Dollars and 34/100 ($2.34), then the Conversion Price for that
particular conversion shall be eighty percent (80%) of the average
of the closing bid price of the Common Stock on the NASDAQ (or if
the Common Stock is not listed for trading on the NASDAQ but is
listed for trading on a national securities exchange then eighty
percent (80%) of the average of the closing bid price of the Common
Stock on the national securities exchange) for the five (5) trading
days immediately prior to the particular date of the Conversion
Notice. If any of the outstanding shares of Preferred Stock are
converted, in whole or in part, into Common Stock pursuant to the
terms of this Section 5(b), the number of shares of whole Common
Stock to be issued to the Holder as a result of such conversion
;3
<PAGE>
shall be determined by dividing (a) the aggregate Stated Value of
the Preferred Stock so surrendered for conversion by (b) the
Conversion Price in effect on the date of that particular
Conversion Notice relating to such conversion. At the time of
conversion of shares of the 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 on the shares of
Preferred so converted to the date of the Conversion Notice
relating to such 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 the Conversion Notice relating to such conversion of the
shares of Preferred Stock so converted divided by the Stock
Dividend Price, in effect at the date of the Conversion Notice
relating to such conversion.
(c) Conversion Notice. The right of conversion shall be exercised
by the Holder thereof by telecopying or faxing an executed and
completed written notice signed by an authorized representative of
the Holder, ("Conversion Notice") to the Corporation that the
Holder elects to convert a specified number of shares of Preferred
Stock representing a specified Stated Value thereof into shares of
Common Stock and by delivering by express courier the certificate
or certificates of Preferred Stock being converted to the
Corporation at its principal office (or such other office or agency
of the Corporation as the Corporation may designate by notice in
writing to the Holders of the Preferred Stock). The business date
indicated on a Conversion Notice which is telecopied to and
received by the Corporation in accordance with the provisions
hereof shall be deemed a Conversion Date. The Conversion Notice
shall include therein the Stated Value of shares of Preferred Stock
to be converted, and a calculation (a) of the Stock Dividend Price,
(b) the Conversion Price, and (c) the number of Shares of Common
Stock to be issued in connection with such conversion. The
Corporation shall have the right to review the calculations
included in the Conversion Notice, and shall provide notice of any
discrepancy or dispute therewith within three (3) business days of
the receipt thereof. The Holder shall deliver to the Corporation
an original Conversion Notice and the original Preferred to be
converted within three (3) business days from the date of the
Conversion Notice.
(d) Issuance of Certificates - Time Conversion Effected.
Promptly, but in no event more than six (6) business days, after
the receipt by facsimile of the Conversion Notice referred to in
Subparagraph (5)(c); and provided within the six (6) business days
the Corporation receives the certificate or certificates for the
shares of Preferred Stock to be converted, the Corporation shall
issue and deliver, or cause to be issued and delivered, to the
Holder, registered in the name of the Holder, a certificate or
certificates for the number of whole shares of Common Stock into
which such shares of Preferred Stock are converted. Such
conversion shall be deemed to have been effected as of the close of
business on the date on which the telecopy or facsimile Conversion
Notice shall have been received by the Corporation, and the rights
of the Holder of such share or shares of Preferred Stock shall
cease, at such time, and the Holder or Holders shall be deemed to
have become the Holder or Holders of record of the shares of Common
Stock represented thereby.
;4
<PAGE>
In the event that the shares of Common Stock issuable upon
conversion of the Preferred, is not delivered within six (6)
business days of the date the Company receives the Conversion
Notice, the Company shall pay to the Buyer, by wire transfer, as
liquidated damages for such failure and not as a penalty, for each
$100,000 of Preferred sought to be converted, $500 for each of the
first five (5) calendar days and $1,000 per calendar day thereafter
that the shares of Common Stock are not delivered, which liquidated
damages shall begin to run from the seventh (7th) business day
after the Conversion Date. Any and all payments required pursuant
to this paragraph shall be payable only in cash. Notwithstanding
the above, liquidated damages shall not exceed $2,000.00 per day.
In addition to the liquidated damages set forth herein, in the
event the Company fails to deliver the shares of Common Stock
within six (6) business days after the Conversion date, the Company
agrees to issue the larger number of shares of Common Stock derived
from (i) the original Conversion Notice, or (ii) utilizing the five
lowest closing bid prices of the Company's shares of Common Stock
beginning on the Conversion Date and ending on the day the shares
of Common Stock are delivered. The Company understands that a
delay in the issuance of the shares of Common Stock could result in
economic loss to the Holder. Nothing contained herein, or in the
Preferred shall limit the Holder's rights to pursue actual damages
for the Company's failure to issue and deliver shares of Common
Stock to the Holder in accordance with the terms of the Certificate
of Designations, and this Agreement.
(e) Fractional Shares of Common Stock. No fractional shares of
Common Stock shall be issued upon conversion of any Preferred Stock
into shares of Common Stock. All fractional shares of Common Stock
shall be aggregated and then rounded down to the nearest whole
share of Common Stock. In case the number of shares of Preferred
Stock represented by the certificate or certificates surrendered
pursuant to Subparagraph 5(b) exceeds the number of shares of
Common Stock converted, the Corporation shall, upon such
conversion, execute and deliver to the Holder, at the expense of
the Corporation, a new certificate or certificates for the number
of shares of Preferred Stock represented by the certificate or
certificates surrendered which are not to be converted.
(f) 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 Preferred Stock are
outstanding and prior to the date that the Corporation's
Registration Statement covering all the shares of Common Stock
issuable upon the conversion of the Preferred Stock is declared
effective by the U.S. Securities and Exchange Commission
("Commission"), the Corporation or such successor corporation as
the case may be, shall make appropriate provision so that the
Holder of each share of Preferred Stock then outstanding shall have
the right to convert such share of 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 Preferred Stock
could have been converted into immediately prior to such Merger or
;5
<PAGE>
Sale, subject to adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section
5.
In the event of a Merger or Sale, where the Corporation is not the
surviving Corporation, the Holder shall have the right to redeem
all of the outstanding shares of Preferred Stock at 120% of the
Liquidation Value of each share of Preferred Stock then outstanding
plus all accrued and unpaid dividends (the "Redemption Amount").
The Corporation shall pay this Redemption Amount in cash within ten
(10) business days of receipt by the Corporation of notice from the
Holder, and receipt by the Corporation of all outstanding shares of
Preferred Stock duly endorsed by the Holder to the Corporation.
(g) 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 Preferred Stock
are issued and outstanding shall declare or pay, 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 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.
(h) Adjustments for Reclassification and Reorganization. If
the Common Stock issuable upon conversion of the Preferred Stock
shall be changed into the same or a different number of shares of
Common Stock of any other class or classes of stock, whether by
capital reorganization, reclassification or otherwise (other than
a subdivision or combination or shares of Common Stock provided for
in Section 5(g) hereof), the Conversion Price then in effect shall,
concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Preferred
Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Preferred Stock would otherwise
have been entitled to receive, a number of shares of Common Stock
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 Preferred Stock immediately
before that change.
6. Assignment.
Subject to all applicable restrictions on transfer, the rights
and obligations of the Corporation and the Holder of the
Preferred Stock shall be binding upon and benefit the successors,
assigns, heirs, administrators, and transferees of the parties.
;6
<PAGE>
<PAGE>
7. Shares of Common Stock to be Reserved.
The Corporation, upon the effective date of this Certificate of
Designations, has a sufficient number of shares of Common Stock
available to reserve for issuance upon the conversion of all
outstanding shares of Preferred Stock, pursuant to the terms and
conditions set forth in Section 5, and exercise of the Warrants as
defined in Section 11. The Corporation will at all times reserve
and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the conversion of Preferred
Stock, and exercise of the Warrants, as herein provided, such
number of shares of Common Stock as shall then be issuable upon the
conversion of all outstanding shares of Preferred Stock, and
exercise of the Warrants. The Corporation covenants that all
shares of Common Stock which shall be so issued shall be duly and
validly issued, fully paid and non assessable. The Corporation
will take such action as may be required, if the total number of
shares of Common Stock issued and issuable after such action upon
conversion of the Preferred Stock, and exercise of the Warrants
would exceed the total number of shares of Common Stock then
authorized by the Corporation's Certificate of Incorporation, as
amended, or would exceed 19.99% of the shares of Common Stock then
outstanding if required by law or the Rules and Regulations of
NASDAQ or the National Securities Exchange applicable to the
Corporation to take such action as a result of exceeding such
19.99%, in order to increase the number of shares of Common Stock
to permit the Corporation to issue the number of shares of Common
Stock required to effect conversion of the Preferred, and exercise
of the Warrants, to a number sufficient to permit conversion of the
Preferred Stock, and exercise of the Warrants, including, without
limitation, engaging in reasonable efforts to obtain the requisite
stockholder approval of any necessary amendment to the
Corporation's Restated Certificate of Incorporation, and to obtain
shareholders approval in order to effect conversion of the
Preferred Stock, and exercise of the Warrants, if required by law
or the rules or regulations of the NASDAQ or National Securities
Exchange applicable to the Corporation.
7(a) Shareholder Approval. In connection with the issuance to the
Holder of the shares of Preferred Stock, pursuant to this
Certificate of Designations, the Corporation is also issuing (i)
certain warrants ("RBB Warrants") to the Holder pursuant to the
terms of that certain Private Securities Subscription Agreement
dated June 30th, 1998 (the "Agreement"), providing for the purchase
of up to 150,000 shares of Common Stock at an exercise price of
$2.50 per share and (ii) certain warrants (collectively, the
"Liviakis Warrants") to Liviakis Financial Communication, Inc.
("Liviakis") and Robert B. Prag providing for the purchase of up to
an aggregate of 2,500,000 shares of Common Stock at an exercise
price of $1.875 per share pursuant to the terms of that Placement
and Consulting Agreement dated June 30th, 1998, between Liviakis
and the Corporation.
If (i) the aggregate number of shares of Common Stock issued by the
Corporation as a result of any or all of the following: (a)
conversion of the Preferred Stock, (b) payment of dividends accrued
on the Preferred Stock (c) exercise of the RBB Warrants, and (d)
exercise of the Liviakis Warrants exceeds 2,388,347 shares of
Common Stock (which equals 19.9% of the outstanding shares of
;7
<PAGE>
Common Stock of the Corporation as of the date of this Certificate
of Designations) and (ii) the Holder has converted or elects to
convert any of the then outstanding shares of Preferred Stock
pursuant to the terms of this Section 5 at a Conversion Price less
than $1.875 ($1.875 the market value per share of Common Stock as
quoted on the NASDAQ as of the close of business on June 30th,
1998) pursuant to the terms of Section 5(b) hereof, other than if
the Conversion Price is less than $1.875 solely as a result of the
anti-dilution provisions of Section 5(g) and (h) hereof, then,
notwithstanding anything in Section 5 to the contrary, the
Corporation shall not issue any shares of Common Stock as a result
of receipt of a Conversion Notice unless and until the Corporation
shall have obtained approval of its shareholders entitled to vote
on the transactions in accordance with subparagraphs (25)(H)(i)d,
(iv) and (v) of Rule 4310 of the NASDAQ Marketplace Rules
("Shareholder Approval").
If Shareholder Approval is required as set forth in the above
paragraph, the Corporation shall take all necessary steps to obtain
such Shareholder Approval upon receipt of the Conversion Notice
triggering the need for Shareholder Approval ("Current Conversion
Notice"). If the Corporation has not received from the Holder a
Current Conversion Notice, the Holder, subsequent to January 1st,
1999 may, if the Corporation's shares of Common Stock trade,
subsequent to January 1st, 1999, at a five (5) day average closing
bid price below Two Dollars and 34/00 ($2.34), upon written notice
to the Corporation, require the Corporation to obtain Shareholder
Approval ("Holder's Notice"). The Holder and the Corporation's
officers and directors covenant to vote all shares of Common Stock
over which they have voting control in favour of Shareholder
Approval. If the Corporation does not obtain Shareholder Approval
within ninety (90) days of the earlier of the Corporation's receipt
of (i) the Current Conversion Notice or (ii) the Holder's Notice,
and the Holder has not breached its covenant to vote all shares of
Common Stock over which they have voting control in favour of
Shareholder Approval, the Corporation shall pay in cash to the
Holder liquidated damages, in an amount of 4% per month of the
Liquidation Value of each share of Preferred Stock then
outstanding, commencing on the 91st day of the Corporation's
receipt of the Holder's Current Conversion Notice, and continuing
every thirty (30) days pro-rata until such time the Corporation
receives Shareholder Approval.
8. No Reissuance of Series 10 Class J Convertible Preferred
Stock.
Shares of Preferred Stock which are converted into shares of Common
Stock as provided herein 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.
9. Closing of Books.
The Corporation will at no time close its transfer books against
the transfer of any Preferred Stock or of any shares of Common
Stock issued or issuable upon the conversion of any shares of
;8
<PAGE>
Common Stock of Preferred Stock in any manner which interferes with
the timely conversion of such Preferred Stock, except as may
otherwise be required to comply with applicable securities laws.
10. No Preemptive Rights.
The 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.
11. Definition of Shares.
As used in this Certificate of Designations, the term "shares of
Common Stock" shall mean and include the Corporation's authorized
common stock, par value $.001, as constituted on the date of filing
of these terms of the Preferred Stock, or in case of any
reorganization, reclassification, or stock split of the outstanding
shares of Common Stock thereof, the stock, securities or assets
provided for hereof. The term "Warrants" as used herein shall have
the same meaning as defined in Section 1 of the Private Securities
Subscription Agreement, dated June 30th 1998, between the Company
and RBB Bank Aktiengesellschaft.
The said determination of the designations, preferences and
relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, relating to
the Preferred Stock was duly made by the Board of Directors
pursuant to the provisions of the Corporation's Restated
Certificate of Incorporation and in accordance with the provisions
of the Delaware General Corporation Law.
IN WITNESS HEREOF, this Certificate of Designations has been
signed by:
Dr. Louis F. Centofanti, President on this 30th day of June,
1998.
/s/ Louis Centofanti
__________________________________________________
President, Perma-Fix Environmental Services, Inc.
Richard Kelecy, Secretary on this 30th day of June, 1998
/s/ Richard T. Kelecy
_________________________________________________
Secretary, Perma-Fix Environmental Services, Inc.
;9
<PAGE>
<PAGE>
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 SIXTEENTH DAY OF JULY,
A.D. 1998, AT 1:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_____________________________
Edward J. Freel,
Secretary of State
Authentication: 9244137
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF ELIMINATION
OF
SERIES 6 CLASS F CONVERTIBLE PREFERRED STOCK
AND
SERIES 7 CLASS G CONVERTIBLE PREFERRED STOCK
OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
____________________________________________
PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation
organized and existing under the General Corporation Law of the
State of Delaware (hereinafter called the "Corporation"), hereby
certifies the following:
1. That the Certificate of Designations of Series 6 Class F
Convertible Preferred Stock of the Corporation (the "Series 6
Preferred") was filed with the Delaware Secretary of State on
November 13, 1997 (the "Series 6 Certificate of Designations").
2. That all outstanding shares of the Series 6 Preferred
have been delivered to the Company and exchanged upon agreement
with the holder thereof pursuant to the terms and conditions of a
certain Second RBB Exchange Agreement between the Company and RBB
Bank Aktiengesellschaft, dated effective as of February 28, 1998.
3. That no shares of Series 6 Preferred remain outstanding.
4. That all shares of the Series 6 Preferred which have been
exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to
series, until such shares are once more designated as part of a
particular series by the Board of Directors.
5. That effective February 28, 1998, the Board of Directors
of the Company duly adopted the following resolutions:
RESOLVED, that upon completion of the exchange
with the holder of the Series 6 Class F
Convertible Preferred Stock, no authorized
shares of Series 6 Class F Convertible
Preferred Stock will remain outstanding and no
shares of Series 6 Class F Convertible
Preferred Stock will be issued subject to the
Certificate of Designations previously filed
with respect to the Series 6 Class F
Convertible Preferred Stock.
FURTHER RESOLVED, that upon completion of the
exchange, the officers of the Company are
hereby authorized and directed, for and on
behalf of the Company, to execute and deliver
<PAGE>
<PAGE>
an appropriate Certificate of Elimination to
the Secretary of State of Delaware regarding
the Series 6 Class F Convertible Preferred
Stock.
6. That the Certificate of Designations of the Series 7
Class G Convertible Preferred Stock of the Corporation (the "Series
7 Preferred") was filed on November 13, 1997 (the "Series 7
Certificate of Designations").
7. That all outstanding shares of the Series 7 Preferred
have been delivered to the Company and exchanged upon agreement
with the holder thereof pursuant to the terms and conditions of a
certain Exchange Agreement between the Company and The Infinity
Fund, L.P., dated effective as of February 28, 1998.
8. That no shares of Series 7 Preferred remain outstanding.
9. That all shares of the Series 7 Preferred which have been
exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to
series, until such shares are once more designated as part of a
particular series by the Board of Directors.
10. That effective February 28, 1998, the Board of Directors
of the Company duly adopted the following resolutions:
RESOLVED, that upon completion of the exchange
with the holder of the Series 7 Class G
Convertible Preferred Stock, no authorized
shares of Series 7 Class G Convertible
Preferred Stock will remain outstanding and no
shares of Series 7 Class G Convertible
Preferred Stock will be issued subject to the
Certificate of Designations previously filed
with respect to the Series 7 Class G
Convertible Preferred Stock.
FURTHER RESOLVED, that upon completion of the
exchange, the officers of the Company are
hereby authorized and directed, for and on
behalf of the Company, to execute and deliver
an appropriate Certificate of Elimination to
the Secretary of State of Delaware regarding
the Series 7 Class G Convertible Preferred
Stock.
11. That pursuant to the provisions of Section 151(g) of the
Delaware General Corporation Law, upon the effective date of the
filing of this Certificate, this Certificate will have the effect
of eliminating from the Restated Certificate of Incorporation only
those matters set forth in the Restated Certificate of
Incorporation with respect to the Series 6 Class F Convertible
Preferred Stock and the Series 7 Class G Convertible Preferred
Stock.
-2-
<PAGE>
IN WITNESS WHEREOF, this Certificate of Elimination has been
executed this 30th day of April, 1998, by the President of the
Company.
PERMA-FIX ENVIRONMENTAL
ATTEST: SERVICES, INC.
/s/ Richard T. Kelecy By /s/ Louis Centofanti
____________________________ ___________________________
Richard T. Kelecy, Secretary Dr. Louis F. Centofanti,
President
(SEAL)
-3-
<PAGE>
<PAGE>
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 SIXTEENTH DAY OF JULY,
A.D. 1998, AT 1:31 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244136
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 8 CLASS H 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 8 Class H
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 8 Class
H Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: April 30, 1998
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>
<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 8 CLASS H 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, restrictions and
conditions 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 8 Class H Convertible Preferred Stock, par
value $.001 per share (the "Series 8 Class H Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 8 Class H
Preferred Stock shall consist of two thousand five hundred (2,500)
shares and no more and shall be designated as the Series 8 Class H
Convertible Preferred Stock, and the preferences, rights,
privileges, restrictions and conditions attaching to the Series 8
Class H Preferred Stock shall be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided in Part
7 hereof or under Section 242(b)(2) of the General
Corporation Law of the State of Delaware (the "GCL"), the
holders of the Series 8 Class H Preferred Stock shall
have no voting rights whatsoever. To the extent that
under Section 242(b)(2) of the GCL or Part 7 hereof, the
holders of the Series 8 Class H Preferred Stock are
entitled to vote on a matter, each share of the Series 8
Class H Preferred Stock shall be entitled one (1) vote
for each outstanding share of Series 8 Class H Preferred
Stock. Holders of the Series 8 Class H 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.
1.2 No Preemptive Rights. The Series 8 Class H
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.
-1-
<PAGE>
<PAGE>
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 8
Class H Preferred Stock shall be outstanding, the holders
of the then outstanding Series 8 Class H Preferred Stock
shall have a preference in distribution of the
Corporation's property available for distribution to the
holders of the Corporation's Common Stock equal to $1,000
consideration per outstanding share of Series 8 Class H
Preferred Stock, 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.
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 8 Class
H 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 8 Class H Preferred
Stock of the full Liquidation Preference amounts provided
for in this Part 2, the holders of the Series 8 Class H
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 8 Class H Preferred Stock upon any
dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be
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 8 Class H
Preferred Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series 8
Class H Preferred Stock and shares of such other class or
series ranking on a parity with the shares of this Series
8 Class H 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. The holders of the Series 8 Class H
Preferred Stock are entitled to receive if, when and as
declared by the Board out of funds legally available
therefor, cumulative 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%)
-2-
<PAGE>
per annum of the Liquidation Value (as defined below) of
each issued and outstanding share of Series 8 Class H
Preferred Stock (the "Dividend Rate"). The Liquidation
Value of the Series 8 Class H Preferred Stock shall be
$1,000 per outstanding share of the Series 8 Class H
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 June 30, 1998 (each, a "Dividend Declaration
Date"). Dividends shall be paid only with respect to
shares of Series 8 Class H Preferred Stock actually
issued and outstanding on a Dividend Declaration Date and
to holders of record of the Series 8 Class H 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 March 1, 1998. 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 8 Class H 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 8
Class H 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 8 Class H Preferred
Stock shall have been paid or declared and set aside for
payment.
Part 4 - Conversion. The holders of the Series 8 Class
H Preferred Stock shall have rights to convert the shares
of Series 8 Class H Preferred Stock into shares of the
Corporation's Common Stock, par value $.001 per share
("Common Stock"), as follows (the "Conversion Rights"):
4.1 Right to Convert. The Series 8 Class H Preferred
Stock shall be convertible into shares of Common Stock at
any time.
4.2 Conversion Price. Subject to the terms hereof, as
used herein, the Conversion Price per outstanding share
of Series 8 Class H Preferred Stock shall be $1.8125,
except that, in the event the average closing bid price
per share 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 prior to the particular date of conversion
shall be less than $2.265, the Conversion Price for only
such particular conversion shall be the product of the
average closing bid quotation of the Common Stock as
-3-
<PAGE>
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 in connection with such conversion multiplied by
eighty percent (80%). 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 8 Class H 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 8 Class H Preferred Stock
so surrendered for conversion by (b) the Conversion Price
as of such conversion. At the time of conversion of
shares of the Series 8 Class H 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 whole
shares of 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 8 Class H
Preferred Stock so converted divided by the Stock
Dividend Price, as defined in Part 3 hereof, in effect at
the date of conversion.
4.3 Mechanics of Conversion. Any holder of the Series
8 Class H Preferred Stock who wishes to exercise its
Conversion Rights pursuant to Section 4.1 of this Part 4
must, if such shares are not being held in escrow by the
Corporation's attorneys, surrender the certificate
therefor at the principal executive office of the
Corporation, and give written notice, which may be via
facsimile transmission, to the Corporation at such office
that it elects to convert the same (the "Conversion
Notice"). In the event that the shares of Series 8 Class
H Preferred Stock are being held in escrow by the
Corporation's attorneys, no delivery of the certificates
shall be required. The Corporation shall, within five
(5) business days after receipt of an appropriate and
timely Conversion Notice (and certificate, if necessary),
issue to such holder of Series 8 Class H 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 8 Class H 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 8 Class H Preferred Stock to be
converted have been surrendered and the Conversion Notice
is received by the Corporation (or in the event that no
surrender of the Certificate is required, then only upon
the receipt by the Corporation of the Conversion Notice)
-4-
<PAGE>
(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. If the Corporation fails to deliver
to the holder or its agent the certificate representing
the shares of Common Stock that the holder is entitled to
receive as a result of such conversion of the Series 8
Class H Preferred Stock within seven (7) business days
after receipt by the Corporation from the holder of an
appropriate and timely Conversion Notice and certificates
pursuant to the terms of this Section 4.3 ("Seven (7)
Business Day Period"), then, upon the written demand of
RBB Bank Aktiengesellschaft ("RBB Bank"), the holder of
the Series 8 Class H Preferred Stock, for payment of the
penalty described below in this Section 4.3, which demand
must be received by the Corporation no later than ten
(10) calendar days after the expiration of such Seven (7)
Business Day Period, the Corporation shall pay to RBB
Bank the following penalty for each business day after
the Seven (7) Business Day Period until the Corporation
delivers to the holder or its agent the certificate
representing the shares of Common Stock that the holder
is entitled to receive as a result of such conversion:
business day eight (8) - U.S. $1,000; business day nine
(9) - U.S. $2,000, and each business day thereafter an
amount equal to the penalty due on the immediately
preceding business day times two (2) until the
Corporation delivers to the holder or its agent the
certificate representing the shares of Common Stock that
the holder is entitled to receive as a result of such
conversion.
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 8 Class H Preferred Stock are outstanding and
prior to the date that the Corporation's Registration
Statement covering up to 1,379,311 shares of Common Stock
issuable upon the conversion of the Series 8 Class H
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 8
Class H Preferred Stock then outstanding shall have the
right to convert such share of Series 8 Class H 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 8 Class H
Preferred Stock could have been converted into
-5-
<PAGE>
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.
4.5 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 8 Class H 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.
4.6 Adjustments for Reclassification and Reorganization.
If the Common Stock issuable upon conversion of the
Series 8 Class H 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 shall,
concurrently with the effectiveness of such
reorganization or reclassification, be proportionately
adjusted so that the Series 8 Class H Preferred Stock
shall be convertible into, in lieu of the number of
shares of Common Stock which the holders of Series 8
Class H 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 8
Class H Preferred Stock immediately before that change.
4.7 Common Stock Duly Issued. All Common Stock which
may be issued upon conversion of Series 8 Class H
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.
4.8 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
8 Class H Preferred Stock a notice setting forth such
adjustment or readjustment and showing in detail the
facts upon which such adjustment is based.
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<PAGE>
4.9 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 8 Class H 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 8 Class H Preferred Stock in connection with such
conversion.
4.10 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 8 Class H 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 8 Class H 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 8 Class H 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.
4.11 Fractional Shares. No fractional shares shall be
issued upon the conversion of any share or shares of
Series 8 Class H Preferred Stock. All shares of Common
Stock (including fractions thereof) issuable upon
conversion of more than one share of Series 8 Class H
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.
4.12 Notices. Any notices required by the provisions of
this Part 4 to be given to the holders of shares of
Series 8 Class H 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.
4.13 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 June 9, 1997, the Corporation may, at its sole
option, but shall not be obligated to, redeem, in whole
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or in part, at any time, and from time to time, the then
outstanding Series 8 Class H Preferred Stock at the
following cash redemption prices per share (the
"Redemption Price") if redeemed during the following
periods: (a) within four years from June 9, 1997 - $1,300
per share, if at any time during such four year period
the average of the closing bid price of the Common Stock
for ten consecutive trading days shall be in excess of
Four Dollars ($4.00) per share, and (b) after four years
from June 9, 1997 - $1,000 per share.
5.2 Mechanics of Redemption. Thirty days prior to any
date stipulated by the Corporation for the redemption of
Series 8 Class H 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 8 Class H Preferred Stock. The Redemption Notice
shall state: (i) the Redemption Date of such shares, (ii)
the number of Series 8 Class H 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 8 Class H Preferred Stock to be
redeemed from such holder, and (iv) instructions as to
how to specify to the Corporation the number of Series 8
Class H Preferred Stock to be redeemed as provided in
this Part 5 and, if the Redemption Notice is mailed to
the Holder after the first 180 days from the date of
issuance of the Series 8 Class H Preferred Stock, the
number of shares to be converted into Common Stock as
provided in Part 4 hereof.
5.3 Rights of Conversion Upon Redemption. If the
redemption occurs after the first 180 days after the
first issuance of Series 8 Class H Preferred Stock, then,
upon receipt of the Redemption Notice, any holder of
Series 8 Class H Preferred Stock shall have the option,
at its sole election, to specify what portion of its
Series 8 Class H 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, except that, notwithstanding
any provision of such Part 4 to the contrary, such holder
shall have the right to convert into Common Stock that
number of Series 8 Class H Preferred Stock called for
redemption in the Redemption Notice.
5.4 Surrender of Certificates. On or before the
Redemption Date in respect of any Series 8 Class H
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, and each surrendered share certificate shall be
canceled and retired. If a share certificate is
surrendered and all the shares evidenced thereby are not
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<PAGE>
being redeemed (as described below), the Corporation
shall cause the Series 8 Class H 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.
5.5 Payment. On the Redemption Date in respect of any
Series 8 Class H Preferred Stock or prior thereto, the
Corporation shall deposit with any bank or trust company
having a capital and surplus of at least $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 8 Class H
Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election
to convert Series 8 Class H 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 8 Class H
Preferred Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends
or return of capital in respect of Series 8 Class H
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 8 Class H 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 8 Class H Preferred
Stock;
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<PAGE>
<PAGE>
6.2.2 On a parity with, or equal to, shares of
this Series 8 Class H 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 8
Class H 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 8
Class H Preferred Stock; and,
6.2.3 Junior to shares of this Series 8 Class H
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 8 Class
H 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.
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<PAGE>
Part 7 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the
Corporation's Certificate of Incorporation (the
"Articles") would alter or change the powers, preferences
or special rights of the Series 8 Class H Preferred Stock
so as to affect such adversely, then the Corporation must
obtain the affirmative vote of such amendment to the
Articles at a duly called and held series meeting of the
holders of the Series 8 Class H Preferred Stock or
written consent by the holders of a majority of the
Series 8 Class H Preferred Stock then outstanding.
Notwithstanding the above or the provisions of Section
242(b)(2) of the GCL, the number of authorized shares of
any class or classes of stock of the Corporation may be
increased or decreased (but not below the number of
shares thereof outstanding) by the affirmative vote of
the holders of a majority of the stock of the Corporation
entitled to vote thereon, voting together as a single
class, irrespective of the provisions of this Section 7.1
or Section 242(b)(2) of the GCL.
7.2 Authorized. Any shares of Series 8 Class H
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.
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<PAGE>
<PAGE>
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 SIXTEENTH DAY OF JULY,
A.D. 1998, AT 1:32 O'CLOCK P.M.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9244135
2249849 8100 Date: 08-10-98
981311720
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 9 CLASS I 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 9 Class I
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 9 Class
I Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: April 30, 1998
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>
<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 9 CLASS I 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, restrictions and
conditions 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 9 Class I Convertible Preferred Stock, par
value $.001 per share (the "Series 9 Class I Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 9 Class I
Preferred Stock shall consist of three hundred (350) shares and no
more and shall be designated as the Series 9 Class I Convertible
Preferred Stock, and the preferences, rights, privileges,
restrictions and conditions attaching to the Series 9 Class I
Preferred Stock shall be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided in Part 7 hereof
or under Section 242(b)(2) of the General Corporation Law of the
State of Delaware (the "GCL"), the holders of the Series 9 Class I
Preferred Stock shall have no voting rights whatsoever. To the
extent that under Section 242(b)(2) of the GCL or Part 7 hereof,
the holders of the Series 9 Class I Preferred Stock are entitled to
vote on a matter, each share of the Series 9 Class I Preferred
Stock shall be entitled one (1) vote for each outstanding share of
Series 9 Class I Preferred Stock. Holders of the Series 9 Class I
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 9 Class I 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.
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<PAGE>
1.2 No Preemptive Rights. The Series 9 Class I 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 9 Class I Preferred Stock shall be
outstanding, the holders of the then outstanding Series 9 Class I
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 9 Class I 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 9 Class I 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 9 Class I Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the
holders of the Series 9 Class I 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 9 Class I
Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, shall be
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
9 Class I Preferred Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid
on account of the shares of this Series 9 Class I Preferred Stock
and shares of such other class or series ranking on a parity with
the shares of this Series 9 Class I 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.
<PAGE>
Part 3 - Dividends.
3.1 The holders of the Series 9 Class I 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
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<PAGE>
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 9 Class I Preferred Stock (the "Dividend Rate").
The Liquidation Value of the Series 9 Class I Preferred Stock shall
be $1,000 per outstanding share of the Series 9 Class I 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 June 30, 1998 (each, a
"Dividend Declaration Date"). Dividends shall be paid only with
respect to shares of Series 9 Class I Preferred Stock actually
issued and outstanding on a Dividend Declaration Date and to
holders of record of the Series 9 Class I 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 March 1, 1998. 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 9
Class I 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 9 Class I 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 9
Class I Preferred Stock shall have been paid or declared and set
aside for payment.
Part 4 - Conversion. The holders of the Series 9 Class I Preferred
Stock shall have rights to convert the shares of Series 9 Class I
Preferred Stock into shares of the Corporation's Common Stock, as
follows (the "Conversion Rights"):
4.1 Right to Convert. The Series 9 Class I Preferred Stock shall
be convertible into shares of Common Stock at any time.
4.2 Conversion Price. Subject to the terms hereof, as used
herein, the Conversion Price per outstanding share of Series
9 Class I Preferred Stock shall be $1.8125, except that, in
the event the average closing bid price per share 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 prior to the
particular date of conversion shall be less than $2.265, the
Conversion Price for only such particular conversion shall be
the product of 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 in connection with such conversion multiplied by eighty
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<PAGE>
percent (80%). 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 9 Class I 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 9 Class I Preferred Stock so
surrendered for conversion by (b) the Conversion Price as of
such conversion. At the time of conversion of shares of the
Series 9 Class I 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 whole shares of 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 9 Class I Preferred
Stock so converted divided by the Stock Dividend Price, as
defined in Part 3 hereof, in effect at the date of conversion.
4.3 Mechanics of Conversion. Any holder of the Series 9 Class I
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
facsimile transmission, to the Corporation at such office that
it elects to convert the same (the "Conversion Notice"). 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 9
Class I 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 9 Class I 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 9 Class I 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
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<PAGE>
(collectively, the "Sale"), and such Merger or Sale becomes
effective (x) while any shares of Series 9 Class I 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 9 Class I 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 9 Class I Preferred Stock then
outstanding shall have the right to convert such share of
Series 9 Class I 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 9 Class I
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.
4.5 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 9 Class I 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.
4.6 Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Series 9 Class I
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 9 Class I Preferred Stock shall be
convertible into, in lieu of the number of shares of Common
Stock which the holders of Series 9 Class I 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 9 Class I Preferred Stock immediately before that
change.
4.7 Common Stock Duly Issued. All Common Stock which may be
issued upon conversion of Series 9 Class I 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.
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4.8 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 9 Class I Preferred Stock a notice
setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment is based.
4.9 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
9 Class I 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 9 Class I Preferred Stock in connection with
such conversion.
4.10 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 9 Class I 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 9 Class I 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 9 Class I 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.
4.11 Fractional Shares. No fractional shares shall be issued upon
the conversion of any share or shares of Series 9 Class I
Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series 9 Class I 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.
4.12 Notices. Any notices required by the provisions of this Part
4 to be given to the holders of shares of Series 9 Class I
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.
4.13 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.
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<PAGE>
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 9 Class I 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 9 Class I
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 9 Class I 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
of Four U.S. Dollars ($4.00) per share, and (b) after four (4)
years from the date of the first issuance of Series 9 Class I
Preferred Stock - $1,000 per share.
5.2 Mechanics of Redemption. Thirty (30) days prior to any date
stipulated by the Corporation for the redemption of Series 9
Class I 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 9 Class I
Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 9
Class I 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 9 Class I Preferred Stock to
be redeemed from such holder, and (iv) instructions as to how
to specify to the Corporation the number of Series 9 Class I
Preferred Stock to be redeemed as provided in this Part 5.
5.3 Rights of Conversion Upon Redemption. If the redemption
occurs after the first one hundred eighty (180) days after the
first issuance of Series 9 Class I Preferred Stock, then, upon
receipt of the Redemption Notice, any holder of Series 9 Class
I Preferred Stock shall have the option, at its sole election,
to specify what portion of its Series 9 Class I 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.
5.4 Surrender of Certificates. On or before the Redemption Date
in respect of any Series 9 Class I 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 9 Class I
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.
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<PAGE>
5.5 Payment. On the Redemption Date in respect of any Series 9
Class I 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 9 Class I Preferred Stock in respect of which
the Corporation has received notice from the holder thereof of
its election to convert Series 9 Class I 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 9 Class I Preferred
Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends or return
of capital in respect of Series 9 Class I 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 9
Class I 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 9 Class I Preferred
Stock;
6.2.2 On a parity with, or equal to, shares of this
Series 9 Class I 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 9 Class I 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
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<PAGE>
<PAGE>
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 9 Class I
Preferred Stock; and,
6.2.3 Junior to shares of this Series 9 Class I
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 9 Class I 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 9 Class I 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.
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<PAGE>
<PAGE>
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 FIFTEENTH DAY OF JULY,
A.D. 1999, AT 12:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9867930
2249849 8100 Date: 07-16-99
991291288
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 11 CLASS K 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 11 Class K 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 11 Class K Convertible Preferred Stock as set forth in the
attached resolutions.
Dated: July 15, 1999 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>
<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 11 CLASS K CONVERTIBLE PREFERRED STOCK
WHEREAS,
A. The Corporation's share capital includes Preferred Stock, par
value $.001 per share ("Preferred Stock"), which Preferred Stock
may be issued in one or more series by the Board of Directors of
the Corporation (the "Board") 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, privileges, restrictions and
conditions attaching to the shares of each such series; and
B. 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 11 Class K Convertible Preferred Stock, par value $.001.
NOW, THEREFORE, BE IT RESOLVED, THAT:
The Series 11 Class K Convertible Preferred Stock, par value
$.001 (the "Series 11 Class K Preferred Stock") of the
Corporation shall consist of 1,769 shares and no more and shall
be designated as the Series 11 Class K Convertible Preferred
Stock, and the preferences, rights, privileges, restrictions and
conditions attaching to the Series 11 Class K Preferred Stock
shall be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided herein, in the
Corporation's Certificate of Incorporation (the "Articles") or the
General Corporation Law of the State of Delaware (the "GCL"), the
holders of the Series 11 Class K Preferred Stock shall have no voting
rights whatsoever. To the extent that under the GCL the vote of the
holders of the Series 11 Class K 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 11 Class K
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 11 Class K Preferred Stock (except as otherwise may be
required under the GCL) shall constitute the approval of such
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<PAGE>
action by the series. To the extent that under the GCL the holders
of the Series 11 Class K Preferred Stock are entitled to vote on a
matter with holders of Corporation's Common Stock and/or any other
class or series of the Corporation's voting securities, the Series 11
Class K Preferred Stock, the Corporation's Common Stock and all other
classes or series of the Corporation's voting securities shall vote
together as one class, with each share of Series 11 Class K Preferred
Stock entitled to a number of votes equal to the number of shares of
the Corporation's Common Stock into which it is then convertible
using the record date for the taking of such vote of stockholders as
the date as of which the Conversion Price (as defined in Section 4.2
hereof) is calculated and conversion is effected. Holders of the
Series 11 Class K 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.
1.2 No Preemptive Rights. The Series 11 Class K 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 11 Class K Preferred Stock shall be outstanding,
the holders of the then outstanding Series 11 Class K Preferred Stock
shall have a preference in distribution of the Corporation's property
available for distribution to the holders of the Corporation's Common
Stock equal to $1,000 consideration per outstanding share of Series
11 Class K Preferred Stock, 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.
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 11 Class K 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 11 Class K Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the
holders of the Series 11 Class K 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 11 Class K Preferred Stock
upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be
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<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 11 Class K
Preferred Stock upon such dissolution, liquidation or winding up
unless proportionate distributive amounts shall be paid on account of
the shares of this Series 11 Class K Preferred Stock and shares of
such other class or series ranking on a parity with the shares of
this Series 11 Class K 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 11 Class K Preferred Stock are
entitled to receive if, when and as declared by the Board out of
funds legally available therefor, cumulative dividends, payable in
cash or Common Stock of the Corporation, par value $.001 per share
(the "Common Stock"), at the Corporation's election, at the rate of
six percent (6%) per annum of the Liquidation Value of the Series 11
Class K Preferred Stock. The Liquidation Value of the Series 11
Class K Preferred Stock shall be $1,000.00 per share (the "Dividend
Rate"). 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, 1996 (each, a "Dividend Declaration Date").
Dividends shall be paid only with respect to shares of Series 11
Class K Preferred Stock actually issued and outstanding on a Dividend
Declaration Date and to holders of record 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 11 Class K Preferred Stock. In the
event that the Corporation elects to pay dividends in Common Stock of
the Corporation, each holder of the Series 11 Class K Preferred Stock
shall receive shares of Common Stock of the Corporation equal to the
quotient of (i) the Dividend Rate in effect on the applicable
Dividend Declaration Date dividend by (ii) the average of the 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 prior to the
Dividend Declaration Date (the "Stock Dividend Price"). Dividends on
the Series 11 Class K Preferred Stock shall be cumulative, and no
dividends or other distributions shall be paid or declared or set
aside for payment on the Common Stock until all accrued and unpaid
dividends on all outstanding shares of Series 11 Class K Preferred
Stock shall have been paid or declared and set aside for payment.
Part 4 - Conversion. The holders of the Series 11 Class K Preferred
Stock shall have rights to convert the shares of Series 11 Class K
Preferred Stock into shares of the Corporation's Common Stock, par
value $.001 per share ("Common Stock"), as follows (the "Conversion
Rights"):
4.1 No Right to Convert. The Series 11 Class K Preferred shall not
be convertible into shares of Common Stock until after July 15, 2000.
<PAGE> -4-
4.2 Right to Convert. The Series 11 Class K Preferred Stock may be
convertible into shares of Common Stock at any time on or after July
15, 2000.
4.3 Conversion Price. As used herein, the term Conversion Price
shall be the product 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 (ii)
seventy-five percent (75%), subject to the provisions of this Section
4.3. Notwithstanding the foregoing, the Conversion Price shall not
be (i) less than a minimum of $1.50 per share for a period of twenty-
four (24) months from the date of issuance of the Series 11 Class K
Preferred Stock, or, after twenty-four (24) months from the date of
issuance of the Series 11 Class K Preferred Stock, a minimum of $.50
per share (as applicable, the "Minimum Conversion Price") or (ii)
more than a maximum of $1.50 per share ( "Maximum Conversion Price").
If, after July 1, 1996, the Corporation sustains a net loss, on a
consolidated basis, in each of two (2) consecutive quarters, as
determined under generally accepted accounting principles, the
Minimum Conversion Price shall be reduced $.25 a share, but there
shall be no change to, or reduction of, the Maximum Conversion Price.
For the purpose of determining whether the Corporation has had a net
loss in each of two (2) consecutive quarters, at no time shall a
quarter that has already been considered in such determination be
considered in any subsequent determination (as an example the third
quarter of 1996 in which there is a net profit and the fourth quarter
of 1996 in which there is a net loss shall be considered as two
consecutive quarters, and, as a result, the fourth quarter of 1996
shall not be considered along with the first quarter of 1997 as two
(2) consecutive quarters, but the first quarter of 1997 must be
considered with the second quarter of 1997 for the purposes of such
determination). For the purposes of this Section 4.2, a "quarter" is
a three (3) month period ending on March 31, June 30, September 30,
and December 31. If any of the outstanding shares of Series 11 Class
K 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 11 Class K 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 11 Class K 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 product of dividing the amount of such unpaid
and accrued dividends to the date of conversion on the shares of
Series 11 Class K Preferred Stock so converted by the Conversion
Price in effect at the date of conversion.
4.4 Mechanics of Conversion. Any holder of the Series 11 Class K
Preferred Stock who wishes to exercise its Conversion Rights pursuant
to Section 4.1 of this Part 4 must, if such shares are not being held
in escrow by the Corporation's attorneys, surrender the certificate
therefor at the principal executive office of the Corporation, and
give written notice, which may be via facsimile transmission, to the
Corporation at such office that it elects to convert the same (the
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<PAGE>
"Conversion Notice"). In the event that the shares of Series 11
Class K Preferred Stock are being held in escrow by the Corporation's
attorneys, no delivery of the certificates shall be required. No
Conversion Notice with respect to any shares of Series 11 Class K
Preferred Stock can be given prior to the time such shares of Series
11 Class K Preferred Stock are eligible for conversion in accordance
with the provision of Section 4.1 above. Any such premature
Conversion Notice shall automatically be null and void. The
Corporation shall, within five (5) business days after receipt of an
appropriate and timely Conversion Notice (and certificate, if
necessary), issue to such holder of Series 11 Class K 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 11 Class K 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 11 Class K Preferred Stock to be
converted have been surrendered and the Conversion Notice is received
by the Corporation (or in the event that no surrender of the
Certificate is required, then only upon the receipt by the
Corporation of the Conversion Notice) (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. If the Corporation fails to deliver to the holder or its
agent the certificate representing the shares of Common Stock that
the holder is entitled to receive as a result of such conversion
within five (5) business days after receipt by the Corporation from
the holder of an appropriate and timely Conversion Notice and
certificates pursuant to the terms of this Section 4.3, the
Corporation shall pay to the holder U.S. $1,000 for each day that the
Corporation is late in delivering such certificate to the holder or
its agent.
4.5 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 11 Class K
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. If the Corporation shall declare or pay,
without consideration, any dividend on the Common Stock payable in
any right to acquire Common stock for no consideration, then the
Corporation shall
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<PAGE>
be deemed to have made a dividend payable in Common Stock in an
amount of shares equal to the maximum number of shares issuable upon
exercise of such rights to acquire Common Stock.
4.6. Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Series 11 Class K
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 11 Class K Preferred
Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 11 Class K 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 11 Class K Preferred Stock
immediately before that change.
4.7 Common Stock Duly Issued. All Common Stock which may be issued
upon conversion of Series 11 Class K 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.
4.8 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 11
Class K Preferred Stock a notice setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment is based.
4.9 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 11 Class K
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 11
Class K Preferred Stock in connection with such conversion.
4.10 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 11 Class K
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 11 Class K 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 11 Class K 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.
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<PAGE>
4.11 Fractional Shares. No fractional share shall be issued upon the
conversion of any share or shares of Series 11 Class K Preferred
Stock. All shares of Common Stock (including fractions thereof)
issuable upon conversion of more than one share of Series 11 Class K
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.
4.12 Notices. Any notices required by the provisions of this Part 4
to be given to the holders of shares of Series 11 Class K 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.
4.13 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
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, 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 11 Class K Preferred Stock at the following
cash redemption prices if redeemed during the following periods: (i)
within one year from July 15, 1999 - $1,100 per share, and (ii) after
one year from July 15, 1999 - $1,200 per share (as applicable, the
redemption price of $1,100 or $1,200 is referred to herein as the
"Redemption Price").
5.2 Mechanics of Redemption. Prior to any date stipulated by the
Corporation for the redemption of Series 11 Class K 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 11 Class K Preferred Stock. The Redemption Notice shall
state: (i) the Redemption Date of such shares, (ii) the number of
Series 11 Class K 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 11 Class K Preferred Stock to be redeemed from
such holder, and (iv) instructions as to how to specify to the
Corporation the number of Series 11 Class K Preferred Stock to be
redeemed as provided in this Part 5 and, if the Redemption Notice is
mailed to the Holder after the first year from the date of issuance
of the Series 11 Class K Preferred Stock, the number of shares to be
converted into Common Stock as provided in Part 4 hereof.
5.3 Mechanics of Redemption. Prior to any date stipulated by the
Corporation for the redemption of Series 11 Class K 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 11 Class K Preferred Stock. The Redemption
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Notice shall state: (i) the Redemption Date of such shares, (ii) the
number of Series 11 Class K 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 11 Class K Preferred Stock to be redeemed from
such holder, and (iv) instructions as to how to specify to the
Corporation the number of Series 11 Class K Preferred Stock to be
redeemed as provided in this Part 5 and, if the Redemption Notice is
mailed to the Holder after the first year from the date of issuance
of the Series 11 Class K Preferred Stock, the number of shares to be
converted into Common Stock as provided in Part 4 hereof.
5.4 Rights of Conversion Upon Redemption. If the redemption occurs
during the first 12 months after the issuance of the Series 11 Class
K Preferred Stock, the holder may not convert any redeemed shares.
If the redemption occurs pursuant to Section 5.1 hereof, the Holder
of the Series 11 Class K Preferred Stock shall not have the right to
convert those outstanding shares of Series 11 Class K Preferred Stock
that the Company is redeeming after receipt of the Redemption Notice.
If the redemption occurs pursuant to Section 5.2 hereof, then, upon
receipt of the Redemption Notice, any holder of Series 11 Class K
Preferred Stock shall have the next five business days during which
it may exercise the option, at its sole election, to specify what
portion of its Series 11 Class K 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, except that, notwithstanding any provision of such
Part 4 to the contrary, after one year from the date of first
issuance of the Series 11 Class K Preferred Stock, such holder shall
have the right to convert into Common Stock that number of Series 11
Class K Preferred Stock called for redemption in the Redemption
Notice.
5.5 Surrender of Certificates. On or before the Redemption Date in
respect of any Series 11 Class K 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 5.5 hereof, to the order of the person
whose name appears on such certificate or certificates as the owner
thereof, and each surrendered share certificate shall be canceled and
retired. 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 11 Class K 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 11
Class K 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 First Year Redemption Price or the Redemption Price,
whichever is applicable, of all such shares called from redemption
(less the aggregate Redemption Price for those Series 11 Class K
Preferred Stock in respect of which the Corporation has received
notice from the
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holder thereof of its election to convert Series 11 Class K 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 First Year Redemption Price or the Redemption Price, whichever is
applicable, 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 First Year Redemption Price or the Redemption Price, whichever
is applicable, 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 First Year Redemption Price or the Redemption Price, whichever is
applicable, in respect of their shares only from the Corporation.
Part 6 - Parity with Other Shares of Series 11 Class K Preferred
Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends or return
of capital in respect of Series 11 Class K 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 11 Class
K 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
11 Class K Preferred Stock;
6.2.2 On a parity with, or equal to, shares of this Series
11 Class K 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
3 Class C 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 11 Class
K Preferred Stock; and,
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6.2.3 Junior to shares of this Series 11 Class K 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 11 Class K 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 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the Corporation's
Certificate of Incorporation would alter or change the powers,
preferences or special rights of the Series 11 Class K Preferred
Stock so as to affect such adversely, then the Corporation must
obtain the affirmative vote of such amendment to the Certificate of
Incorporation at a duly called and held series meeting of the holders
of the Series 11 Class K Preferred Stock or written consent by the
holders of a majority of the Series 11 Class K Preferred Stock then
outstanding. Notwithstanding the above, the number of authorized
shares of any class or classes of stock may be increased or decreased
(but not below the number of shares thereof outstanding) by the
affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon, voting together as a single
class, irrespective of this Section 7.1 or the requirements of
Section 242 of the GCL.
7.2 Authorized. Any shares of Series 11 Class K 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.
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<PAGE>
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 FIFTEENTH DAY OF JULY,
A.D. 1999, AT 12:31 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9868060
2249849 8100 Date: 07-16-99
991291289
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 12 CLASS L 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 12 Class L 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 12 Class L Convertible Preferred Stock as set forth in the
attached resolutions.
Dated: July 15, 1999
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 12 CLASS L 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, restrictions and conditions
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 12 Class L Convertible Preferred Stock, par value $.001
per share (the "Series 12 Class L Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 12 Class L
Preferred Stock shall consist of nine hundred sixteen (916) shares
and no more and shall be designated as the Series 12 Class L
Convertible Preferred Stock, and the preferences, rights, privileges,
restrictions and conditions attaching to the Series 12 Class L
Preferred Stock shall be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided in Part 7
hereof or under Section 242(b)(2) of the General
Corporation Law of the State of Delaware (the "GCL"), the
holders of the Series 12 Class L Preferred Stock shall have
no voting rights whatsoever. To the extent that under
Section 242(b)(2) of the GCL or Part 7 hereof, the holders
of the Series 12 Class L Preferred Stock are entitled to
vote on a matter, each share of the Series 12 Class L
Preferred Stock shall be entitled one (1) vote for each
outstanding share of Series 12 Class L Preferred Stock.
Holders of the Series 12 Class L 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.
1.2 No Preemptive Rights. The Series 12 Class L 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.
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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 12 Class L Preferred
Stock shall be outstanding, the holders of the then
outstanding Series 12 Class L Preferred Stock shall have a
preference in distribution of the Corporation's property
available for distribution to the holders of the
Corporation's Common Stock equal to $1,000 consideration
per outstanding share of Series 12 Class L Preferred Stock,
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.
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 12 Class L
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 12 Class L Preferred
Stock of the full Liquidation Preference amounts provided
for in this Part 2, the holders of the Series 12 Class L
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 12 Class L Preferred Stock upon any
dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be 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 12 Class L Preferred Stock upon such dissolution,
liquidation or winding up unless proportionate distributive
amounts shall be paid on account of the shares of this
Series 12 Class L Preferred Stock and shares of such other
class or series ranking on a parity with the shares of this
Series 12 Class L 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. The holders of the Series 12 Class L
Preferred Stock are entitled to receive if, when and as
declared by the Board out of funds legally available
therefor, cumulative 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%)
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per annum of the Liquidation Value (as defined below) of each issued
and outstanding share of Series 12 Class L Preferred Stock (the
"Dividend Rate"). The Liquidation Value of the Series 12 Class L
Preferred Stock shall be $1,000 per outstanding share of the Series
12 Class L 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 June 30, 1998 (each,
a "Dividend Declaration Date"). Dividends shall be paid only with
respect to shares of Series 12 Class L Preferred Stock actually
issued and outstanding on a Dividend Declaration Date and to holders
of record of the Series 12 Class L 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
March 1, 1998. 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 12 Class L 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 12 Class L 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 12 Class L Preferred Stock shall have been paid or declared
and set aside for payment.
Part 4 - Conversion. The holders of the Series 12 Class L
Preferred Stock shall have rights to convert the shares of
Series 12 Class L Preferred Stock into shares of the
Corporation's Common Stock, par value $.001 per share
("Common Stock"), as follows (the "Conversion Rights"):
4.1 No Right to Convert. The Series 12 Class L Preferred
shall not be convertible into shares of Common Stock until
after July 15, 2000.
4.2 Right to Convert. The Series 12 Class L Preferred
Stock may be convertible into shares of Common Stock at any
time after July 15, 2000.
4.3 Conversion Price. Subject to the terms hereof, as
used herein, the Conversion Price per outstanding share of
Series 12 Class L Preferred Stock shall be $1.8125, except
that, in the event the average closing bid price per share
of the Common Stock as reported on the over-the-counter
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market, or the closing sale price if listed on a national
securities exchange, for the five (5) trading days prior to the
particular date of conversion shall be less than $2.265, the
Conversion Price for only such particular conversion shall be
the product of 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 in connection
with such conversion multiplied by eighty percent (80%), subject
to the provisions of this Section 4.3. Notwithstanding the
foregoing, the Conversion Price shall not be less than a minimum
of $1.50 per share ("Minimum Conversion Price") for a period of
twenty-four (24) months from the date of issuance of the Series
12 Class L Preferred Stock. If any of the outstanding shares of
Series 12 Class L 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 12
Class L Preferred Stock so surrendered for conversion by (b) the
Conversion Price as of such conversion. At the time of
conversion of shares of the Series 12 Class L 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 whole shares of 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 12 Class L Preferred Stock so converted divided
by the Stock Dividend Price, as defined in Part 3 hereof, in
effect at the date of conversion.
4.3 Mechanics of Conversion. Any holder of the Series 12
Class L Preferred Stock who wishes to exercise its
Conversion Rights pursuant to Section 4.1 of this Part 4
must, if such shares are not being held in escrow by the
Corporation's attorneys, surrender the certificate therefor
at the principal executive office of the Corporation, and
give written notice, which may be via facsimile
transmission, to the Corporation at such office that it
elects to convert the same (the "Conversion Notice"). In
the event that the shares of Series 12 Class L Preferred
Stock are being held in escrow by the Corporation's
attorneys, no delivery of the certificates shall be
required. The Corporation shall, within five (5) business
days after receipt of an appropriate and timely Conversion
Notice (and certificate, if necessary), issue to such
holder of Series 12 Class L 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 12 Class L 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
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<PAGE>
made only after both the certificate for the shares of Series 12
Class L Preferred Stock to be converted have been surrendered
and the Conversion Notice is received by the Corporation (or in
the event that no surrender of the Certificate is required, then
only upon the receipt by the Corporation of the Conversion
Notice) (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. If the Corporation fails to deliver to the
holder or its agent the certificate representing the shares of
Common Stock that the holder is entitled to receive as a result
of such conversion of the Series 12 Class L Preferred Stock
within seven (7) business days after receipt by the Corporation
from the holder of an appropriate and timely Conversion Notice
and certificates pursuant to the terms of this Section 4.3
("Seven (7) Business Day Period"), then, upon the written demand
of RBB Bank Aktiengesellschaft ("RBB Bank"), the holder of the
Series 12 Class L Preferred Stock, for payment of the penalty
described below in this Section 4.3, which demand must be
received by the Corporation no later than ten (10) calendar days
after the expiration of such Seven (7) Business Day Period, the
Corporation shall pay to RBB Bank the following penalty for each
business day after the Seven (7) Business Day Period until the
Corporation delivers to the holder or its agent the certificate
representing the shares of Common Stock that the holder is
entitled to receive as a result of such conversion: business day
eight (8) - U.S. $1,000; business day nine (9) - U.S. $2,000,
and each business day thereafter an amount equal to the penalty
due on the immediately preceding business day times two (2)
until the Corporation delivers to the holder or its agent the
certificate representing the shares of Common Stock that the
holder is entitled to receive as a result of such conversion.
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 12 Class L
Preferred Stock are outstanding and prior to the date that
the Corporation's Registration Statement covering up to
1,379,311 shares of Common Stock issuable upon the
conversion of the Series 12 Class L 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 12 Class L Preferred Stock then
outstanding shall have the right to convert such share of
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Series 12 Class L 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 12 Class L
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.
4.5 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 12 Class L 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.
4.6 Adjustments for Reclassification and Reorganization.
If the Common Stock issuable upon conversion of the Series
12 Class L 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 shall, concurrently with the
effectiveness of such reorganization or reclassification,
be proportionately adjusted so that the Series 12 Class L
Preferred Stock shall be convertible into, in lieu of the
number of shares of Common Stock which the holders of
Series 12 Class L 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 12 Class L Preferred
Stock immediately before that change.
4.7 Common Stock Duly Issued. All Common Stock which may
be issued upon conversion of Series 12 Class L 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.
4.8 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
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prepare and furnish to each holder of Series 12 Class L
Preferred Stock a notice setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment is based.
4.9 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 12 Class L 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 12 Class L
Preferred Stock in connection with such conversion.
4.10 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 12 Class L 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 12 Class L 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 12 Class L 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.
4.11 Fractional Shares. No fractional shares shall be
issued upon the conversion of any share or shares of Series
12 Class L Preferred Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion of
more than one share of Series 12 Class L 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.
4.12 Notices. Any notices required by the provisions of
this Part 4 to be given to the holders of shares of Series
12 Class L 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.
4.13 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.
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<PAGE>
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, 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, (i) for a period of 120
days from the date of issuance of the Series 12 Class L
Preferred Stock up to an aggregate of 300 shares of the
Series 12 Class L Preferred Stock at the cash redemption
price of $1,000 per share, and (ii) the then outstanding
Series 12 Class L Preferred Stock at the following cash
redemption prices if redeemed during the following periods:
(a) within one year from July 15, 1999 - $1,100 per share,
except as otherwise provided in (i) above and (b) after one
year from July 15, 1999 - $1,200 per share (as applicable,
the redemption price of $1,000, $1,100 or $1,200 is
referred to herein as the "Redemption Price").
5.2 Mechanics of Redemption. Prior to any date stipulated
by the Corporation for the redemption of Series 12 Class L
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 12 Class L
Preferred Stock. The Redemption Notice shall state: (i)
the Redemption Date of such shares, (ii) the number of
Series 12 Class L 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 12
Class L Preferred Stock to be redeemed from such holder,
and (iv) instructions as to how to specify to the
Corporation the number of Series 12 Class L Preferred Stock
to be redeemed as provided in this Part 5 and, if the
Redemption Notice is mailed to the Holder after the first
year from the date of issuance of the Series 12 Class L
Preferred Stock, the number of shares to be converted into
Common Stock as provided in Part 4 hereof.
5.3 Rights of Conversion Upon Redemption. If the
redemption occurs during the first 12 months after the
issuance of the Series 12 Class L Preferred Stock, the
holder may not convert any redeemed shares. If the
redemption occurs after the first twelve months after the
first issuance of Series 12 Class L Preferred Stock, then,
upon receipt of the Redemption Notice, any holder of Series
12 Class L Preferred Stock shall have five business days
during which it may exercise the option, at its sole
election, to specify what portion of its Series 12 Class L
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, except that, notwithstanding any provision of
such Part 4 to the contrary, after one year from the date
of first issuance of the Series 12 Class L Preferred Stock,
such holder shall have the right to convert into Common
Stock that number of Series 12 Class L Preferred Stock
called for redemption in the Redemption Notice.
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<PAGE>
<PAGE>
5.4 Surrender of Certificates. On or before the
Redemption Date in respect of any Series 12 Class L
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, and
each surrendered share certificate shall be canceled and
retired. 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 12
Class L 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.
5.5 Payment. On the Redemption Date in respect of any
Series 12 Class L Preferred Stock or prior thereto, the
Corporation shall deposit with any bank or trust company
having a capital and surplus of at least $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 12 Class L
Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to
convert Series 12 Class L 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 12 Class L
Preferred Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends
or return of capital in respect of Series 12 Class L
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.
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<PAGE>
<PAGE>
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
12 Class L 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 12 Class L Preferred
Stock;
6.2.2 On a parity with, or equal to, shares of
this Series 12 Class L 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 12 Class L 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 12 Class L
Preferred Stock; and,
6.2.3 Junior to shares of this Series 12 Class L
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 12 Class L 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 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the
Corporation's Certificate of Incorporation (the "Articles")
would alter or change the powers, preferences or special
rights of the Series 12 Class L Preferred Stock so as to
affect such adversely, then the Corporation must obtain the
affirmative vote of such amendment to the Articles at a
duly called and held series meeting of the holders of the
Series 12 Class L Preferred Stock or written consent by the
holders of a majority of the Series 12 Class L Preferred
Stock then outstanding. Notwithstanding the above or the
provisions of Section 242(b)(2) of the GCL, the number of
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authorized shares of any class or classes of stock of the
Corporation may be increased or decreased (but not below the
number of shares thereof outstanding) by the affirmative vote of
the holders of a majority of the stock of the Corporation
entitled to vote thereon, voting together as a single class,
irrespective of the provisions of this Section 7.1 or Section
242(b)(2) of the GCL.
7.2 Authorized. Any shares of Series 12 Class L 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.
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<PAGE>
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 FIFTEENTH DAY OF JULY,
A.D. 1999, AT 12:32 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9868192
2249849 8100 Date: 07-16-92
991291291
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 13 CLASS M 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 13 Class M 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 13 Class M Convertible Preferred Stock as set forth in the
attached resolutions.
Dated: July 15, 1999
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By /s/ Louis F. 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 13 CLASS M CONVERTIBLE PREFERRED STOCK
RE: DESIGNATION OF SERIES 13 CLASS M PREFERRED STOCK.
RESOLVED: That the designations, powers, preferences and rights of
the Series 13 Class M Convertible Preferred Stock be, and they hereby
are, as set forth below:
1. Number of Shares of Common Stock of Series 13 Class M
Convertible Preferred Stock
The Corporation hereby authorizes the issuance of up to two thousand
two hundred fifty-two (2,252) shares of Series 13 Class M Convertible
Preferred Stock par value $.001 per share (the "Preferred Stock").
This Preferred Stock shall pay an annual dividend based on a 365 day
calendar year of 4% of the Liquidation Value (as defined in Section 3
hereof) ("Dividend Rate"), payable semiannually within ten (10)
business days after each subsequent June 30th and December 31st (each
a "Dividend Declaration Date"), and shall be payable in cash or shares
of the Corporation's par value $.001 per share common stock (Common
Stock) at the Corporation's option. The first Dividend Declaration
Date shall be December 31st, 1998.
In the event that the Corporation elects to pay the accrued dividends
due as of a Dividend Declaration Date on the outstanding shares of
Preferred Stock in Common Stock of the Corporation, the Holder of each
share of Preferred Stock shall receive that 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
Corporation's Common Stock as reported on the National Association of
Securities Dealers Automated Quotation system ("NASDAQ"), or if the
Common Stock is not listed for trading on the NASDAQ but is listed for
trading on a national securities exchange, the average closing bid
price of the Common Stock as quoted on such national 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 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 Preferred Stock shall have been paid or
declared and set aside for payment.
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<PAGE>
2. Voting.
Except as provided under Section 242 of the GCL, holders of Preferred
Stock (the "Holders") shall not have the right to vote on any matter.
Notwithstanding the provisions of Section 242 of the GCL or Section 4
hereof, the number of authorized shares of any class or classes of
stock of the Corporation may be increased or decreased (but not below
the number of shares thereof outstanding) by the affirmative vote of
the holders of a majority of the stock of the Corporation entitled to
vote thereon, voting together as a single class, irrespective of the
provisions of Section 242 of the GCL.
3. Liquidation.
In the event of a voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the Holders of Preferred Stock shall be
entitled to receive out of the assets of the Corporation legally
available for distribution to holders of its capital stock, before any
payment or distribution shall be made to holders of shares of Common
Stock or any other class of stock ranking junior to the Preferred
Stock, an amount per share of Preferred Stock equal to $1,000 (the
"Liquidation Value") plus any accrued and unpaid dividends on the
Preferred Stock. If upon such liquidation, dissolution, or winding up
of the Corporation, whether voluntary or involuntary, the assets to be
distributed among the Holders of Preferred Stock shall be insufficient
to permit payment to the Holders of Preferred Stock of the amount
distributable as aforesaid, then the entire assets of the Corporation
to be so distributed shall be distributed ratably among the Holders of
Preferred Stock and shares of such other classes or series ranking on
a parity with the shares of this Preferred Stock in proportion to the
full distributable amounts for which holders of all such parity shares
are entitled upon such distribution, liquidation, or winding up. Upon
any such liquidation, dissolution or winding up of the Corporation,
after the Holders of Preferred Stock shall have been paid in full the
amounts to which they shall be entitled, the remaining net assets of
the Corporation may be distributed to the holders of stock ranking on
liquidation junior to the Preferred Stock and the Holders of the
Preferred Stock shall have no right or claim to any of the remaining
assets of the Corporation. Written notice of such liquidation,
dissolution or winding up, stating a payment date, the amount of the
liquidation payments and the place where said liquidation payments
shall be payable, shall be given by mail, postage prepaid or by telex
or facsimile to non-U.S. residents, not less than 10 days prior to the
payment date stated therein, to the Holders of record of Preferred
Stock, such notice to be addressed to each such Holder at its address
as shown by the records of the Corporation. For purposes hereof the
shares of Common Stock, shall rank on liquidation junior to the
Preferred Stock.
4. Restrictions.
The Corporation will not amend or modify the terms of its Restated
Certificate of Incorporation so as to adversely alter or change the
Preferred Stock at any time when shares of Preferred Stock are
outstanding, without the approval of the Holders of at least a majority
of the then outstanding shares of Preferred Stock given in writing or
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<PAGE>
by vote at a meeting, consenting or voting (as the case may be)
separately as a series, except where the vote or written consent of the
Holders of a greater number of shares of Common Stock of the
Corporation is required by law or by the Corporation's Certificate of
Incorporation, as amended.
5. Optional Conversion.
The Holders of shares of Preferred Stock shall have the following
conversion rights to convert the shares of Preferred Stock into shares
of Common Stock of the Corporation:
(a) No Right to Convert. The Preferred Stock shall not be convertible
into shares of Common Stock until after July 15, 2000.
(b) Conversion Dates. The Preferred Stock may be convertible into
shares of Common Stock at any time after July 15, 2000.
(c) Right to Convert; Conversion Price. Subject to the terms hereof,
as used herein, the term Conversion Price per outstanding share of
Preferred Stock shall be One Dollar and 875/100 ($1.875); except that
after the expiration of one hundred and eighty (180) days after the
Closing Date if the average of the closing bid price per share of
Common Stock quoted on the NASDAQ (or the closing bid price of the
Common Stock as quoted on the national securities exchange if the
Common Stock is not listed for trading on the NASDAQ but is listed for
trading on a national securities exchange) for the five (5) trading
days immediately prior to the particular date of each Conversion Notice
(as defined below) is less than Two Dollars and 34/100 ($2.34), then
the Conversion Price for that particular conversion shall be eighty
percent (80%) of the average of the closing bid price of the Common
Stock on the NASDAQ (or if the Common Stock is not listed for trading
on the NASDAQ but is listed for trading on a national securities
exchange then eighty percent (80%) of the average of the closing bid
price of the Common Stock on the national securities exchange) for the
five (5) trading days immediately prior to the particular date of the
Conversion Notice. Notwithstanding the foregoing, the Conversion Price
shall not be less than a minimum of $1.50 per share ("Minimum
Conversion Price") for a period of twenty-four (24) months from the
date of issuance of the Preferred Stock.
If any of the outstanding shares of Preferred Stock are converted,
in whole or in part, into Common Stock pursuant to the terms of this
Section 5(b), 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 Stated Value of the Preferred Stock so
surrendered for conversion by (b) the Conversion Price in effect on the
date of that particular Conversion Notice relating to such conversion.
At the time of conversion of shares of the 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 on the shares
of Preferred so converted to the date of the Conversion Notice relating
to such 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 the Conversion Notice
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<PAGE>
relating to such conversion of the shares of Preferred Stock so
converted divided by the Stock Dividend Price, in effect at the date of
the Conversion Notice relating to such conversion.
(c) Conversion Notice. The right of conversion shall be exercised by
the Holder thereof by telecopying or faxing an executed and completed
written notice signed by an authorized representative of the Holder,
("Conversion Notice") to the Corporation that the Holder elects to
convert a specified number of shares of Preferred Stock representing a
specified Stated Value thereof into shares of Common Stock and by
delivering by express courier the certificate or certificates of
Preferred Stock being converted to the Corporation at its principal
office (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the Holders of the
Preferred Stock). The business date indicated on a Conversion Notice
which is telecopied to and received by the Corporation in accordance
with the provisions hereof shall be deemed a Conversion Date. The
Conversion Notice shall include therein the Stated Value of shares of
Preferred Stock to be converted, and a calculation (a) of the Stock
Dividend Price, (b) the Conversion Price, and (c) the number of Shares
of Common Stock to be issued in connection with such conversion. The
Corporation shall have the right to review the calculations included in
the Conversion Notice, and shall provide notice of any discrepancy or
dispute therewith within three (3) business days of the receipt
thereof. The Holder shall deliver to the Corporation an original
Conversion Notice and the original Preferred to be converted within
three (3) business days from the date of the Conversion Notice.
(d) Issuance of Certificates - Time Conversion Effected. Promptly,
but in no event more than six (6) business days, after the receipt by
facsimile of the Conversion Notice referred to in Subparagraph (5)(c);
and provided within the six (6) business days the Corporation receives
the certificate or certificates for the shares of Preferred Stock to be
converted, the Corporation shall issue and deliver, or cause to be
issued and delivered, to the Holder, registered in the name of the
Holder, a certificate or certificates for the number of whole shares of
Common Stock into which such shares of Preferred Stock are converted.
Such conversion shall be deemed to have been effected as of the close
of business on the date on which the telecopy or facsimile Conversion
Notice shall have been received by the Corporation, and the rights of
the Holder of such share or shares of Preferred Stock shall cease, at
such time, and the Holder or Holders shall be deemed to have become the
Holder or Holders of record of the shares of Common Stock represented
thereby.
In the event that the shares of Common Stock issuable upon conversion
of the Preferred, is not delivered within six (6) business days of the
date the Company receives the Conversion Notice, the Company shall pay
to the Buyer, by wire transfer, as liquidated damages for such failure
and not as a penalty, for each $100,000 of Preferred sought to be
converted, $500 for each of the first five (5) calendar days and $1,000
per calendar day thereafter that the shares of Common Stock are not
delivered, which liquidated damages shall begin to run from the seventh
(7th) business day after the Conversion Date. Any and all payments
required pursuant to this paragraph shall be payable only in cash.
Notwithstanding the above, liquidated damages shall not exceed
$2,000.00 per day. In addition to the liquidated damages set forth
herein, in the event the Company fails to deliver the shares of Common
Stock within six (6) business days after the Conversion date, the
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Company agrees to issue the larger number of shares of Common Stock
derived from (i) the original Conversion Notice, or (ii) utilizing the
five lowest closing bid prices of the Company's shares of Common Stock
beginning on the Conversion Date and ending on the day the shares of
Common Stock are delivered. The Company understands that a delay in
the issuance of the shares of Common Stock could result in economic
loss to the Holder. Nothing contained herein, or in the Preferred
shall limit the Holder's rights to pursue actual damages for the
Company's failure to issue and deliver shares of Common Stock to the
Holder in accordance with the terms of the Certificate of Designations,
and this Agreement.
(e) Fractional Shares of Common Stock. No fractional shares of Common
Stock shall be issued upon conversion of any Preferred Stock into
shares of Common Stock. All fractional shares of Common Stock shall be
aggregated and then rounded down to the nearest whole share of Common
Stock. In case the number of shares of Preferred Stock represented by
the certificate or certificates surrendered pursuant to Subparagraph
5(b) exceeds the number of shares of Common Stock converted, the
Corporation shall, upon such conversion, execute and deliver to the
Holder, at the expense of the Corporation, a new certificate or
certificates for the number of shares of Preferred Stock represented by
the certificate or certificates surrendered which are not to be
converted.
(f) 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 Preferred Stock are outstanding and
prior to the date that the Corporation's Registration Statement
covering all the shares of Common Stock issuable upon the conversion of
the Preferred Stock is declared effective by the U.S. Securities and
Exchange Commission ("Commission"), the Corporation or such successor
corporation as the case may be, shall make appropriate provision so
that the Holder of each share of Preferred Stock then outstanding shall
have the right to convert such share of 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 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 Section 5.
In the event of a Merger or Sale, where the Corporation is not the
surviving Corporation, the Holder shall have the right to redeem all of
the outstanding shares of Preferred Stock at 120% of the Liquidation
Value of each share of Preferred Stock then outstanding plus all
accrued and unpaid dividends (the "Redemption Amount"). The
Corporation shall pay this Redemption Amount in cash within ten (10)
business days of receipt by the Corporation of notice from the Holder,
and receipt by the Corporation of all outstanding shares of Preferred
Stock duly endorsed by the Holder to the Corporation.
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(g) 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 Preferred Stock are
issued and outstanding shall declare or pay, 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 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.
(h) Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Preferred Stock shall be
changed into the same or a different number of shares of Common Stock
of any other class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision
or combination or shares of Common Stock provided for in Section 5(g)
hereof), the Conversion Price then in effect shall, concurrently with
the effectiveness of such reorganization or reclassification, be
proportionately adjusted so that the Preferred Stock shall be
convertible into, in lieu of the number of shares of Common Stock which
the holders of Preferred Stock would otherwise have been entitled to
receive, a number of shares of Common Stock 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 Preferred Stock immediately before that change.
6 Redemption.
(a) Redemption at Corporation's Option. Except as otherwise provided
in this Section 6, at any time, and from time to time, 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 (i) for a period
of 120 days from the date of issuance of the Preferred Stock up to an
aggregate of 450 shares of Series 13 Class M Preferred Stock at the
cash redemption price of $1,000 per share and (ii) the then outstanding
Series 13 Class M Preferred Stock at the following cash redemption
prices if redeemed during the following periods: (a) within one year
from July 15, 1999 - $1,100 per share, except as otherwise provided in
(i) above, and (b) after one year from July 15, 1999 - $1,200 per share
(as applicable, the redemption price of $1,000, $1,100 or $1,200 is
referred to herein as the "Redemption Price").
(b) Mechanics of Redemption. Prior to any date stipulated by the
Corporation for the redemption of Series 13 Class M 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 13
Class M Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 13 Class M
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 13
Class M Preferred Stock to be redeemed from such holder, and (iv)
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<PAGE>
instructions as to how to specify to the Corporation the number of
Series 13 Class M Preferred Stock to be redeemed as provided in this
Part 6 and, if the Redemption Notice is mailed to the Holder after the
first year from the date of issuance of the Series 13 Class M Preferred
Stock, the number of shares to be converted into Common Stock as
provided in Part 5 hereof.
(c) Rights of Conversion Upon Redemption. If the redemption occurs
during the first 12 months after the issuance of the Preferred Stock,
the holder may not convert any redeemed shares. If the redemption
occurs after the first year after the first issuance of Series 13 Class
M Preferred Stock, then, upon receipt of the Redemption Notice, any
holder of Series 13 Class M Preferred Stock shall have five business
days during which it may exercise the option, at its sole election, to
specify what portion of its Series 13 Class M Preferred Stock called
for redemption in the Redemption Notice shall be redeemed as provided
in this Part 6 or converted into Common Stock in the manner provided in
Part 5 hereof, except that, notwithstanding any provision of such Part
5 to the contrary, after one year from the date of first issuance of
the Preferred Stock, such holder shall have the right to convert into
Common Stock that number of Series 13 Class M Preferred Stock called
for redemption in the Redemption Notice.
(d) Surrender of Certificates. On or before the Redemption Date in
respect of any Series 13 Class M 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 hereof, to the order of the person whose name
appears on such certificate or certificates as the owner thereof, and
each surrendered share certificate shall be canceled and retired. 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 13 Class M 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.
(e) Payment. On the Redemption Date in respect of any Series 13 Class
M Preferred Stock or prior thereto, the Corporation shall deposit with
any bank or trust company having a capital and surplus of at least
$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 13 Class M Preferred Stock in respect
of which the Corporation has received notice from the holder thereof of
its election to convert Series 13 Class M 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
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<PAGE>
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.
7. Assignment.
Subject to all applicable restrictions on transfer, the rights and
obligations of the Corporation and the Holder of the Preferred Stock
shall be binding upon and benefit the successors, assigns, heirs,
administrators, and transferees of the parties.
8. Shares of Common Stock to be Reserved.
The Corporation, upon the effective date of this Certificate of
Designations, has a sufficient number of shares of Common Stock
available to reserve for issuance upon the conversion of all
outstanding shares of Preferred Stock, pursuant to the terms and
conditions set forth in Section 5, and exercise of the Warrants as
defined in Section 12. The Corporation will at all times reserve and
keep available out of its authorized shares of Common Stock, solely for
the purpose of issuance upon the conversion of Preferred Stock, and
exercise of the Warrants, as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of all
outstanding shares of Preferred Stock, and exercise of the Warrants.
The Corporation covenants that all shares of Common Stock which shall
be so issued shall be duly and validly issued, fully paid and non
assessable. The Corporation will take such action as may be required,
if the total number of shares of Common Stock issued and issuable after
such action upon conversion of the Preferred Stock, and exercise of the
Warrants would exceed the total number of shares of Common Stock then
authorized by the Corporation's Certificate of Incorporation, as
amended, or would exceed 19.99% of the shares of Common Stock then
outstanding if required by law or the Rules and Regulations of NASDAQ
or the National Securities Exchange applicable to the Corporation to
take such action as a result of exceeding such 19.99%, in order to
increase the number of shares of Common Stock to permit the Corporation
to issue the number of shares of Common Stock required to effect
conversion of the Preferred, and exercise of the Warrants, to a number
sufficient to permit conversion of the Preferred Stock, and exercise of
the Warrants, including, without limitation, engaging in reasonable
efforts to obtain the requisite stockholder approval of any necessary
amendment to the Corporation's Restated Certificate of Incorporation,
and to obtain shareholders approval in order to effect conversion of
the Preferred Stock, and exercise of the Warrants, if required by law
or the rules or regulations of the NASDAQ or National Securities
Exchange applicable to the Corporation.
8(a) Shareholder Approval. In connection with the issuance to the
Holder of the shares of Preferred Stock, pursuant to this Certificate
of Designations, the Corporation is also issuing (i) certain warrants
("RBB Warrants") to the Holder pursuant to the terms of that certain
Private Securities Subscription Agreement dated June 30, 1998 (the
"Agreement"), providing for the purchase of up to 150,000 shares of
Common Stock at an exercise price of $2.50 per share and (ii) certain
warrants (collectively, the "Liviakis Warrants") to Liviakis Financial
Communication, Inc. ("Liviakis") and Robert B. Prag providing for the
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<PAGE>
purchase of up to an aggregate of 2,500,000 shares of Common Stock at
an exercise price of $1.875 per share pursuant to the terms of that
Liviakis Agreement dated June 30, 1998, between Liviakis and the
Corporation.
If (i) the aggregate number of shares of Common Stock issued by the
Corporation as a result of any or all of the following: (a) conversion
of the Preferred Stock, (b) payment of dividends accrued on the
Preferred Stock (c) exercise of the RBB Warrants, and (d) exercise of
the Liviakis Warrants exceeds 2,388,347 shares of Common Stock (which
equals 19.9% of the outstanding shares of Common Stock of the
Corporation as of the date of this Certificate of Designations) and
(ii) the Holder has converted or elects to convert any of the then
outstanding shares of Preferred Stock pursuant to the terms of Section
5 at a Conversion Price less than $ 1.875 ($1.875 being the market
value per share of Common Stock as quoted on the NASDAQ as of the close
of business on June 30, 1998) pursuant to the terms of Section 5(b)
hereof, other than if the Conversion Price is less than $ 1.875 solely
as a result of the anti-dilution provisions of Section 5(g) and (h)
hereof, then, notwithstanding anything in Section 5 to the contrary,
the Corporation shall not issue any shares of Common Stock as a result
of receipt of a Conversion Notice unless and until the Corporation
shall have obtained approval of its shareholders entitled to vote on
the transactions in accordance with subparagraphs (25)(H)(i)d, (iv) and
(v) of Rule 4310 of the NASDAQ Marketplace Rules ("Shareholder
Approval").
If Shareholder Approval is required as set forth in the above
paragraph, the Corporation shall take all necessary steps to obtain
such Shareholder Approval upon receipt of the Conversion Notice
triggering the need for Shareholder Approval ("Current Conversion
Notice"). If the Corporation has not received from the Holder a
Current Conversion Notice, the Holder, subsequent to January 1st, 1999
may, if the Corporation's shares of Common Stock trade, subsequent to
January 1st, 1999, at a five (5) day average closing bid price below
Two Dollars and 34/00 ($2.34), upon written notice to the Corporation,
require the Corporation to obtain Shareholder Approval ("Holder's
Notice"). The Holder and the Corporation's officers and directors
covenant to vote all shares of Common Stock over which they have voting
control in favor of Shareholder Approval. If the Corporation does not
obtain Shareholder Approval within ninety (90) days of the earlier of
the Corporation's receipt of (i) the Current Conversion Notice or (ii)
the Holder's Notice, and the Holder has not breached its covenant to
vote all shares of Common Stock over which they have voting control in
favor of Shareholder Approval, the Corporation shall pay in cash to the
Holder liquidated damages, in an amount of 4% per month of the
Liquidation Value of each share of Preferred Stock then outstanding,
commencing on the 91st day of the Corporation's receipt of the Holder's
Current Conversion Notice, and continuing every thirty (30) days pro-
rata until such time the Corporation receives Shareholder Approval.
9. No Reissuance of Series 13 Class M Convertible Preferred Stock.
Shares of Preferred Stock which are converted into shares of Common
Stock as provided herein 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.
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<PAGE>
10. Closing of Books.
The Corporation will at no time close its transfer books against the
transfer of any Preferred Stock or of any shares of Common Stock issued
or issuable upon the conversion of any shares of Common Stock of
Preferred Stock in any manner which interferes with the timely
conversion of such Preferred Stock, except as may otherwise be required
to comply with applicable securities laws.
11. No Preemptive Rights.
The 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.
12. Definition of Shares.
As used in this Certificate of Designations, the term "shares of Common
Stock" shall mean and include the Corporation's authorized common
stock, par value $.001, as constituted on the date of filing of these
terms of the Preferred Stock, or in case of any reorganization,
reclassification, or stock split of the outstanding shares of Common
Stock thereof, the stock, securities or assets provided for hereof.
The term "Warrants" as used herein shall have the same meaning as
defined in Section 1 of the Private Securities Subscription Agreement,
dated June 30, 1998, between the Company and RBB Bank
Aktiengesellschaft.
The said determination of the designations, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, relating to the Preferred Stock
was duly made by the Board of Directors pursuant to the provisions of
the Corporation's Restated Certificate of Incorporation and in
accordance with the provisions of the Delaware General Corporation Law.
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<PAGE>
<PAGE>
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 FIFTEENTH DAY OF JULY,
A.D. 1999, AT 12:33 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9868302
2249849 8100 Date: 07-16-99
991291292
<PAGE>
<PAGE>
CERTIFICATE OF ELIMINATION
OF
SERIES 3 CLASS C CONVERTIBLE PREFERRED STOCK
AND
SERIES 8 CLASS H CONVERTIBLE PREFERRED STOCK
AND
SERIES 10 CLASS J CONVERTIBLE PREFERRED STOCK
OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
____________________________________________
PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation organized
and existing under the General Corporation Law of the State of Delaware
(hereinafter called the "Corporation"), hereby certifies the following:
1. That the Certificate of Designations of Series 3 Class C
Convertible Preferred Stock, par value $.001 per share, of the
Corporation (the "Series 3 Preferred") was filed with the Delaware
Secretary of State on July 19, 1996 (the "Series 3 Certificate of
Designations").
2. That all outstanding shares of the Series 3 Preferred have
been delivered to the Company and exchanged pursuant to an agreement
with the holder thereof in accordance with the terms and conditions of
a certain Exchange Agreement between the Company and RBB Bank
Aktiengesellschaft, dated as of July 15, 1999.
3. That no shares of Series 3 Preferred remain outstanding.
4. That all shares of the Series 3 Preferred which have been
exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to series,
until such shares are once more designated as part of a particular
series by the Board of Directors.
5. That effective July 15, 1999, the Board of Directors of the
Company duly adopted the following resolutions:
RESOLVED, that upon completion of the exchange
with the holder of the Series 3 Class C
Convertible Preferred Stock, no authorized shares
of Series 3 Class C Convertible Preferred Stock
will remain outstanding and no shares of Series 3
Class C Convertible Preferred Stock will be issued
subject to the Certificate of Designations
previously filed with respect to the Series 3
Class C Convertible Preferred Stock.
FURTHER RESOLVED, that upon completion of the
exchange, the officers of the Company are hereby
authorized and directed, for and on behalf of the
Company, to execute and deliver an appropriate
<PAGE>
<PAGE>
Certificate of Elimination to the Secretary of State of
Delaware regarding the Series 3 Class C Convertible Preferred
Stock.
6. That the Certificate of Designations of the Series 8 Class H
Convertible Preferred Stock, par value $.001 per share, of the
Corporation (the "Series 8 Preferred") was filed on July 16, 1998 (the
"Series 8 Certificate of Designations").
7. That all outstanding shares of the Series 8 Preferred have
been delivered to the Company and exchanged pursuant to an agreement
with the holder thereof in accordance with the terms and conditions of
a certain Exchange Agreement between the Company and RBB Bank, dated as
of July 15, 1999.
8. That no shares of Series 8 Preferred remain outstanding.
9. That all shares of the Series 8 Preferred which have been
exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to series,
until such shares are once more designated as part of a particular
series by the Board of Directors.
10. That effective July 15, 1999, the Board of Directors of the
Company duly adopted the following resolutions:
RESOLVED, that upon completion of the exchange
with the holder of the Series 8 Class H
Convertible Preferred Stock, no authorized shares
of Series 8 Class H Convertible Preferred Stock
will remain outstanding and no shares of Series 8
Class H Convertible Preferred Stock will be issued
subject to the Certificate of Designations
previously filed with respect to the Series 8
Class H Convertible Preferred Stock.
FURTHER RESOLVED, that upon completion of the
exchange, the officers of the Company are hereby
authorized and directed, for and on behalf of the
Company, to execute and deliver an appropriate
Certificate of Elimination to the Secretary of
State of Delaware regarding the Series 8 Class H
Convertible Preferred Stock.
11. That the Certificate of Designations of the Series 10 Class
J Convertible Preferred Stock, par value $.001 per share, of the
Corporation (the "Series 10 Preferred") was filed on July 10, 1998 (the
"Series 10 Certificate of Designations").
12. That all outstanding shares of the Series 10 Preferred have
been delivered to the Company and exchanged pursuant to an agreement
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<PAGE>
with the holder thereof in accordance to the terms and conditions of a
certain Exchange Agreement between the Company and RBB Bank, dated as
of July 15, 1999.
13. That no shares of Series 10 Preferred remain outstanding.
14. That all shares of the Series 10 Preferred which have been
exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to series,
until such shares are once more designated as part of a particular
series by the Board of Directors.
15. That effective July 15, 1999, the Board of Directors of the
Company duly adopted the following resolutions:
RESOLVED, that upon completion of the exchange
with the holder of the Series 10 Class J
Convertible Preferred Stock, no authorized shares
of Series 10 Class J Convertible Preferred Stock
will remain outstanding and no shares of Series 10
Class J Convertible Preferred Stock will be issued
subject to the Certificate of Designations
previously filed with respect to the Series 10
Class J Convertible Preferred Stock.
FURTHER RESOLVED, that upon completion of the
exchange, the officers of the Company are hereby
authorized and directed, for and on behalf of the
Company, to execute and deliver an appropriate
Certificate of Elimination to the Secretary of
State of Delaware regarding the Series 10 Class J
Convertible Preferred Stock.
16. That pursuant to the provisions of Section 151(g) of the Delaware
General Corporation Law, upon the effective date of the filing of this
Certificate, this Certificate will have the effect of eliminating from
the Restated Certificate of Incorporation only those matters set forth
in the Restated Certificate of Incorporation with respect to the Series
3 Class C Convertible Preferred Stock, the Series 8 Class H Convertible
Preferred Stock, and the Series 10 Class J Convertible Preferred Stock
IN WITNESS WHEREOF, this Certificate of Elimination has been
executed this 15th day of July, 1999, by the President of the Company.
PERMA-FIX ENVIRONMENTAL
ATTEST: SERVICES, INC.
/s/ Richard T. Kelecy By /s/ Louis Centofanti
__________________________ _________________________________
Richard T. Kelecy, Secretary Dr. Louis F. Centofanti, President
(SEAL)
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<PAGE>
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 TENTH DAY OF AUGUST,
A.D. 1999, AT 12:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9913783
2249849 8100 Date: 08-10-99
991331578
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 14 CLASS N 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 14 Class N 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 14 Class N
Convertible Preferred Stock as set forth in the attached resolutions.
Dated: August 10, 1999 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>
<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 14 CLASS N CONVERTIBLE PREFERRED STOCK
WHEREAS,
A. The Corporation's share capital includes Preferred Stock, par
value $.001 per share ("Preferred Stock"), which Preferred Stock
may be issued in one or more series by the Board of Directors of
the Corporation (the "Board") 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, privileges, restrictions and conditions
attaching to the shares of each such series; and
B. 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 14 Class N Convertible Preferred Stock, par value $.001.
NOW, THEREFORE, BE IT RESOLVED, THAT:
The Series 14 Class N Convertible Preferred Stock, par value $.001
(the "Series 14 Class N Preferred Stock") of the Corporation shall
consist of 1,769 shares and no more and shall be designated as the
Series 14 Class N Convertible Preferred Stock, and the
preferences, rights, privileges, restrictions and conditions
attaching to the Series 14 Class N Preferred Stock shall be as
follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided herein, in the
Corporation's Certificate of Incorporation (the "Articles") or the
General Corporation Law of the State of Delaware (the "GCL"), the
holders of the Series 14 Class N Preferred Stock shall have no voting
rights whatsoever. To the extent that under the GCL the vote of the
holders of the Series 14 Class N 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 14 Class N
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 14
Class N 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 the GCL the holders of the Series 14 Class N
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<PAGE>
<PAGE>
Preferred Stock are entitled to vote on a matter with holders of
Corporation's Common Stock and/or any other class or series of the
Corporation's voting securities, the Series 14 Class N Preferred Stock,
the Corporation's Common Stock and all other classes or series of the
Corporation's voting securities shall vote together as one class, with
each share of Series 14 Class N Preferred Stock entitled to a number of
votes equal to the number of shares of the Corporation's Common Stock
into which it is then convertible using the record date for the taking
of such vote of stockholders as the date as of which the Conversion
Price (as defined in Section 4.3 hereof) is calculated and conversion
is effected. Holders of the Series 14 Class N 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.
1.2 No Preemptive Rights. The Series 14 Class N 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 14 Class N Preferred Stock shall be outstanding,
the holders of the then outstanding Series 14 Class N Preferred Stock
shall have a preference in distribution of the Corporation's property
available for distribution to the holders of the Corporation's Common
Stock equal to $1,000 consideration per outstanding share of Series 14
Class N Preferred Stock, 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.
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 14 Class N 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 14 Class N Preferred Stock of the full Liquidation
Preference amounts provided for in this Part 2, the holders of the
Series 14 Class N 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 14 Class N Preferred Stock upon any
dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
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<PAGE>
<PAGE>
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 14 Class N Preferred Stock upon such dissolution,
liquidation or winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series 14 Class N
Preferred Stock and shares of such other class or series ranking on a
parity with the shares of this Series 14 Class N 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 14 Class N Preferred Stock are entitled
to receive if, when and as declared by the Board out of funds legally
available therefor, cumulative dividends, payable in cash or Common
Stock of the Corporation, par value $.001 per share (the "Common
Stock"), at the Corporation's election, at the rate of six percent (6%)
per annum of the Liquidation Value of the Series 14 Class N Preferred
Stock. The Liquidation Value of the Series 14 Class N Preferred Stock
shall be $1,000.00 per share (the "Dividend Rate"). 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, 1999
(each, a "Dividend Declaration Date"). Dividends shall be paid only
with respect to shares of Series 14 Class N Preferred Stock actually
issued and outstanding on a Dividend Declaration Date and to holders of
record 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 August 3, 1999. In the event that the Corporation
elects to pay dividends in Common Stock of the Corporation, each holder
of the Series 14 Class N Preferred Stock shall receive shares of Common
Stock of the Corporation equal to the quotient of (i) the Dividend Rate
in effect on the applicable Dividend Declaration Date dividend by (ii)
the average of the 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 prior to the Dividend Declaration Date (the "Stock Dividend
Price"). Dividends on the Series 14 Class N Preferred Stock shall be
cumulative, and no dividends or other distributions shall be paid or
declared or set aside for payment on the Common Stock until all accrued
and unpaid dividends on all outstanding shares of Series 14 Class N
Preferred Stock shall have been paid or declared and set aside for
payment.
Part 4 - Conversion. The holders of the Series 14 Class N Preferred
Stock shall have rights to convert the shares of Series 14 Class N
Preferred Stock into shares of the Corporation's Common Stock, par
value $.001 per share ("Common Stock"), as follows (the "Conversion
Rights"):
4.1 No Right to Convert. The Series 14 Class N Preferred shall not be
convertible into shares of Common Stock until after April 20, 2000.
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<PAGE>
4.2 Right to Convert. The Series 14 Class N Preferred Stock may be
convertible into shares of Common Stock at any time on or after
April 20, 2000.
4.3 Conversion Price. As used herein, the term Conversion Price shall
be the product 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 4.4 below multiplied by (ii) seventy-five
percent (75%), subject to the provisions of this Section 4.3.
Notwithstanding the foregoing, the Conversion Price shall not be (i)
less than a minimum of $1.50 per share for a period of twenty-four (24)
months from April 20, 1999, or, after twenty-four (24) months from
April 20, 1999, a minimum of $.50 per share (as applicable, the
"Minimum Conversion Price") or (ii) more than a maximum of $1.50 per
share ( "Maximum Conversion Price"). If, after July 1, 1996, the
Corporation sustains a net loss, on a consolidated basis, in each of
two (2) consecutive quarters, as determined under generally accepted
accounting principles, the Minimum Conversion Price shall be reduced
$.25 a share, but there shall be no change to, or reduction of, the
Maximum Conversion Price. For the purpose of determining whether the
Corporation has had a net loss in each of two (2) consecutive quarters,
at no time shall a quarter that has already been considered in such
determination be considered in any subsequent determination (as an
example the third quarter of 1996 in which there is a net profit and
the fourth quarter of 1996 in which there is a net loss shall be
considered as two consecutive quarters, and, as a result, the fourth
quarter of 1996 shall not be considered along with the first quarter of
1997 as two (2) consecutive quarters, but the first quarter of 1997
must be considered with the second quarter of 1997 for the purposes of
such determination). For the purposes of this Section 4.3, a "quarter"
is a three (3) month period ending on March 31, June 30, September 30,
and December 31. If any of the outstanding shares of Series 14 Class
N 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 14 Class N 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 14 Class N 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 product of
dividing the amount of such unpaid and accrued dividends to the date of
conversion on the shares of Series 14 Class N Preferred Stock so
converted by the Conversion Price in effect at the date of conversion.
4.4 Mechanics of Conversion. Any holder of the Series 14 Class N
Preferred Stock who wishes to exercise its Conversion Rights pursuant
to the terms of this Part 4 must, if such shares are not being held in
escrow by the Corporation's attorneys, surrender the certificate
therefor at the principal executive office of the Corporation, and give
written notice, which may be via facsimile transmission, to the
Corporation at such office that it elects to convert the same (the
"Conversion Notice"). In the event that the shares of Series 14 Class
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N Preferred Stock are being held in escrow by the Corporation's
attorneys, no delivery of the certificates shall be required. No
Conversion Notice with respect to any shares of Series 14 Class N
Preferred Stock can be given prior to the time such shares of Series 14
Class N Preferred Stock are eligible for conversion in accordance with
the provision of Section 4.1 above. Any such premature Conversion
Notice shall automatically be null and void. The Corporation shall,
within five (5) business days after receipt of an appropriate and
timely Conversion Notice (and certificate, if necessary), issue to such
holder of Series 14 Class N 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 14 Class N 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 14
Class N Preferred Stock to be converted have been surrendered and the
Conversion Notice is received by the Corporation (or in the event that
no surrender of the Certificate is required, then only upon the receipt
by the Corporation of the Conversion Notice) (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. If the Corporation fails to deliver to the holder
or its agent the certificate representing the shares of Common Stock
that the holder is entitled to receive as a result of such conversion
within five (5) business days after receipt by the Corporation from the
holder of an appropriate and timely Conversion Notice and certificates
pursuant to the terms of this Section 4.4, the Corporation shall pay to
the holder U.S. $1,000 for each day that the Corporation is late in
delivering such certificate to the holder or its agent.
4.5 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 14 Class N
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. If
the Corporation shall declare or pay, without consideration, any
dividend on the Common Stock payable in any right to acquire Common
stock for no consideration, then the Corporation shall be deemed to
have made a dividend payable in Common Stock in an amount of shares
equal to the maximum number of shares issuable upon exercise of such
rights to acquire Common Stock.
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4.6. Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Series 14 Class N
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 4.5 hereof), the
Conversion Price then in effect shall, concurrently with the
effectiveness of such reorganization or reclassification, be
proportionately adjusted so that the Series 14 Class N Preferred Stock
shall be convertible into, in lieu of the number of shares of Common
Stock which the holders of Series 14 Class N 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 14 Class N Preferred Stock immediately
before that change.
4.7 Common Stock Duly Issued. All Common Stock which may be issued
upon conversion of Series 14 Class N 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.
4.8 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 14 Class N
Preferred Stock a notice setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment is based.
4.9 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 14 Class N 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 14 Class N Preferred Stock in
connection with such conversion.
4.10 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 14 Class N 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 14 Class N 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
14 Class N 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.
4.11 Fractional Shares. No fractional share shall be issued upon the
conversion of any share or shares of Series 14 Class N Preferred Stock.
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All shares of Common Stock (including fractions thereof) issuable upon
conversion of more than one share of Series 14 Class N 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.
4.12 Notices. Any notices required by the provisions of this Part 4 to
be given to the holders of shares of Series 14 Class N 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.
4.13 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 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, 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 14 Class N Preferred Stock at the following
cash redemption prices if redeemed during the following periods: (i)
within twelve (12) months from April 20, 1999 - $1,100 per share, and
(ii) after twelve (12) months from April 20, 1999 - $1,200 per share
(as applicable, the redemption price of $1,100 or $1,200 is referred to
herein as the "Redemption Price").
5.2 Mechanics of Redemption. Prior to any date stipulated by the
Corporation for the redemption of Series 14 Class N 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 14
Class N Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 14 Class N
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 14
Class N Preferred Stock to be redeemed from such holder, and (iv)
instructions as to how to specify to the Corporation the number of
Series 14 Class N Preferred Stock to be redeemed as provided in this
Part 5 and, if the Redemption Notice is mailed to the Holder after the
first twelve (12) months from April 20, 1999, the number of shares to
be converted into Common Stock as provided in Part 4 hereof.
5.3 Mechanics of Redemption. Prior to any date stipulated by the
Corporation for the redemption of Series 14 Class N 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 14
Class N Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 14 Class N
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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 14
Class N Preferred Stock to be redeemed from such holder, and (iv)
instructions as to how to specify to the Corporation the number of
Series 14 Class N Preferred Stock to be redeemed as provided in this
Part 5 and, if the Redemption Notice is mailed to the Holder after the
first 12 months from April 20, 1999, the number of shares to be
converted into Common Stock as provided in Part 4 hereof.
5.4 Rights of Conversion Upon Redemption. If the redemption occurs
during the first 12 months after April 20, 1999, the holder may not
convert any redeemed shares. If the redemption occurs pursuant to
Section 5.1 (i) hereof, the Holder of the Series 14 Class N Preferred
Stock shall not have the right to convert those outstanding shares of
Series 14 Class N Preferred Stock that the Company is redeeming after
receipt of the Redemption Notice. If the redemption occurs pursuant to
Section 5.1 (ii) hereof, then, upon receipt of the Redemption Notice,
any holder of Series 14 Class N Preferred Stock shall have the next
five business days during which it may exercise the option, at its sole
election, to specify what portion of its Series 14 Class N 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, except that, notwithstanding any provision
of such Part 4 to the contrary, after twelve (12) months from April,
20, 1999, such holder shall have the right to convert into Common Stock
that number of Series 14 Class N Preferred Stock called for redemption
in the Redemption Notice.
5.5 Surrender of Certificates. On or before the Redemption Date in
respect of any Series 14 Class N 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, and each surrendered share certificate shall be canceled and
retired. 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 14 Class N 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 14 Class
N 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 First
Year Redemption Price or the Redemption Price, whichever is applicable,
of all such shares called from redemption (less the aggregate
Redemption Price for those Series 14 Class N Preferred Stock in respect
of which the Corporation has received notice from the holder thereof of
its election to convert Series 14 Class N 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
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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 First Year
Redemption Price or the Redemption Price, whichever is applicable, 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 First Year
Redemption Price or the Redemption Price, whichever is applicable, in
respect of their shares only from the Corporation.
Part 6 - Parity with Other Shares of Series 14 Class N Preferred Stock
and Priority.
6.1 Rateable Participation. If any cumulative dividends or return of
capital in respect of Series 14 Class N 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 14 Class N
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 14 Class N Preferred Stock;
6.2.2 On a parity with, or equal to, shares of this Series 14
Class N 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
14 Class N 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 14 Class N
Preferred Stock; and,
6.2.3 Junior to shares of this Series 14 Class N 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 14 Class N 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
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involuntary, as the case may be, in preference or priority to the
holders of shares of such class or series.
Part 7 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the Corporation's
Certificate of Incorporation would alter or change the powers,
preferences or special rights of the Series 14 Class N Preferred Stock
so as to affect such adversely, then the Corporation must obtain the
affirmative vote of such amendment to the Certificate of Incorporation
at a duly called and held series meeting of the holders of the Series
14 Class N Preferred Stock or written consent by the holders of a
majority of the Series 14 Class N Preferred Stock then outstanding.
Notwithstanding the above, the number of authorized shares of any class
or classes of stock may be increased or decreased (but not below the
number of shares thereof outstanding) by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to vote
thereon, voting together as a single class, irrespective of this
Section 7.1 or the requirements of Section 242 of the GCL.
7.2 Authorized. Any shares of Series 14 Class N 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.
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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 TENTH DAY OF AUGUST,
A.D. 1999, AT 12:31 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9913988
2249849 8100 Date: 08-10-99
991331579
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CERTIFICATE OF DESIGNATIONS
OF SERIES 15 CLASS O 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 15 Class O 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 15 Class O
Convertible Preferred Stock as set forth in the attached resolutions.
Dated: August 10, 1999
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>
<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 15 CLASS O 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, restrictions and conditions 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 15 Class O Convertible Preferred Stock, par value $.001 per
share (the "Series 15 Class O Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 15 Class O
Preferred Stock shall consist of six hundred sixteen (616) shares and
no more and shall be designated as the Series 15 Class O Convertible
Preferred Stock, and the preferences, rights, privileges, restrictions
and conditions attaching to the Series 15 Class O Preferred Stock shall
be as follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided in Part 7
hereof or under Section 242(b)(2) of the General Corporation
Law of the State of Delaware (the "GCL"), the holders of the
Series 15 Class O Preferred Stock shall have no voting rights
whatsoever. To the extent that under Section 242(b)(2) of
the GCL or Part 7 hereof, the holders of the Series 15 Class
O Preferred Stock are entitled to vote on a matter, each
share of the Series 15 Class O Preferred Stock shall be
entitled one (1) vote for each outstanding share of Series 15
Class O Preferred Stock. Holders of the Series 15 Class O
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.
1.2 No Preemptive Rights. The Series 15 Class O 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.
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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 15 Class O Preferred Stock
shall be outstanding, the holders of the then outstanding
Series 15 Class O Preferred Stock shall have a preference in
distribution of the Corporation's property available for
distribution to the holders of the Corporation's Common Stock
equal to $1,000 consideration per outstanding share of Series
15 Class O Preferred Stock, 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.
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 15 Class O
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 15 Class O Preferred
Stock of the full Liquidation Preference amounts provided for
in this Part 2, the holders of the Series 15 Class O
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 15 Class
O Preferred Stock upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or
involuntary, shall be 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 15 Class O Preferred
Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account
of the shares of this Series 15 Class O Preferred Stock and
shares of such other class or series ranking on a parity with
the shares of this Series 15 Class O 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. The holders of the Series 15 Class O
Preferred Stock are entitled to receive if, when and as
declared by the Board out of funds legally available
therefor, cumulative 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
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annum of the Liquidation Value (as defined below) of each issued
and outstanding share of Series 15 Class O Preferred Stock (the
"Dividend Rate"). The Liquidation Value of the Series 15 Class O
Preferred Stock shall be $1,000 per outstanding share of the
Series 15 Class O 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, 1999 (each, a "Dividend Declaration Date").
Dividends shall be paid only with respect to shares of Series 15
Class O Preferred Stock actually issued and outstanding on a
Dividend Declaration Date and to holders of record of the Series
15 Class O 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 August
3, 1999. 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 15 Class O 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 15 Class O
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 15 Class O Preferred
Stock shall have been paid or declared and set aside for payment.
Part 4 - Conversion. The holders of the Series 15 Class O
Preferred Stock shall have rights to convert the shares of
Series 15 Class O Preferred Stock into shares of the
Corporation's Common Stock, par value $.001 per share
("Common Stock"), as follows (the "Conversion Rights"):
4.1 No Right to Convert. The Series 15 Class O Preferred
shall not be convertible into shares of Common Stock until
after April 20, 2000.
4.2 Right to Convert. The Series 15 Class O Preferred Stock
may be convertible into shares of Common Stock at any time
after April 20, 2000.
4.3 Conversion Price. Subject to the terms hereof, as used
herein, the Conversion Price per outstanding share of Series
15 Class O Preferred Stock shall be $1.8125, except that, in
the event the average closing bid price per share of the
Common Stock as reported on the over-the-counter market, or
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<PAGE>
the closing sale price if listed on a national securities
exchange, for the five (5) trading days prior to the particular
date of conversion shall be less than $2.265, the Conversion Price
for only such particular conversion shall be the product of 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 4.4 below in connection with such conversion
multiplied by eighty percent (80%), subject to the provisions of
this Section 4.2. Notwithstanding the foregoing, the Conversion
Price shall not be less than a minimum of $1.50 per share
("Minimum Conversion Price") for a period of twenty-four (24)
months from April 20, 1999. If any of the outstanding shares of
Series 15 Class O 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 15 Class O Preferred
Stock so surrendered for conversion by (b) the Conversion Price as
of such conversion. At the time of conversion of shares of the
Series 15 Class O 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
whole shares of 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 15 Class O Preferred Stock so
converted divided by the Stock Dividend Price, as defined in Part
3 hereof, in effect at the date of conversion.
4.4 Mechanics of Conversion. Any holder of the Series 15
Class O Preferred Stock who wishes to exercise its Conversion
Rights pursuant to the terms of this Part 4 must, if such
shares are not being held in escrow by the Corporation's
attorneys, surrender the certificate therefor at the
principal executive office of the Corporation, and give
written notice, which may be via facsimile transmission, to
the Corporation at such office that it elects to convert the
same (the "Conversion Notice"). In the event that the shares
of Series 15 Class O Preferred Stock are being held in escrow
by the Corporation's attorneys, no delivery of the
certificates shall be required. The Corporation shall,
within five (5) business days after receipt of an appropriate
and timely Conversion Notice (and certificate, if necessary),
issue to such holder of Series 15 Class O 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 15 Class
O 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
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Series 15 Class O Preferred Stock to be converted have been
surrendered and the Conversion Notice is received by the
Corporation (or in the event that no surrender of the Certificate
is required, then only upon the receipt by the Corporation of the
Conversion Notice) (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. If the Corporation fails
to deliver to the holder or its agent the certificate representing
the shares of Common Stock that the holder is entitled to receive
as a result of such conversion of the Series 15 Class O Preferred
Stock within seven (7) business days after receipt by the
Corporation from the holder of an appropriate and timely
Conversion Notice and certificates pursuant to the terms of this
Section 4.4 ("Seven (7) Business Day Period"), then, upon the
written demand of RBB Bank Aktiengesellschaft ("RBB Bank"), the
holder of the Series 15 Class O Preferred Stock, for payment of
the penalty described below in this Section 4.4, which demand must
be received by the Corporation no later than ten (10) calendar
days after the expiration of such Seven (7) Business Day Period,
the Corporation shall pay to RBB Bank the following penalty for
each business day after the Seven (7) Business Day Period until
the Corporation delivers to the holder or its agent the
certificate representing the shares of Common Stock that the
holder is entitled to receive as a result of such conversion:
business day eight (8) - U.S. $1,000; business day nine (9) - U.S.
$2,000, and each business day thereafter an amount equal to the
penalty due on the immediately preceding business day times two
(2) until the Corporation delivers to the holder or its agent the
certificate representing the shares of Common Stock that the
holder is entitled to receive as a result of such conversion.
4.5 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 15 Class O Preferred
Stock are outstanding and prior to the date that the
Corporation's Registration Statement covering up to 1,379,311
shares of Common Stock issuable upon the conversion of the
Series 15 Class O 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 4.3, 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 15 Class O Preferred Stock
then outstanding shall have the right to convert such share
of Series 15 Class O 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
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<PAGE>
of shares of Common Stock into which such shares of Series 15
Class O 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.
4.6 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 15 Class O 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.
4.7 Adjustments for Reclassification and Reorganization. If
the Common Stock issuable upon conversion of the Series 15
Class O 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 4.6 hereof), the Conversion Price
shall, concurrently with the effectiveness of such
reorganization or reclassification, be proportionately
adjusted so that the Series 15 Class O Preferred Stock shall
be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 15 Class O 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 15 Class O Preferred Stock immediately before that
change.
4.8 Common Stock Duly Issued. All Common Stock which may be
issued upon conversion of Series 15 Class O 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.
4.9 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 15 Class O Preferred
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Stock a notice setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment is based.
4.10 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 15 Class O 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 15 Class O
Preferred Stock in connection with such conversion.
4.11 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 15 Class O 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 15 Class O 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 15 Class O 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.
4.12 Fractional Shares. No fractional shares shall be issued
upon the conversion of any share or shares of Series 15 Class
O Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series 15 Class O 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.
4.13 Notices. Any notices required by the provisions of this
Part 4 to be given to the holders of shares of Series 15
Class O 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.
4.14 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.
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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, 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 15 Class
O Preferred Stock at the following cash redemption prices if
redeemed during the following periods: (i) within twelve (12)
months from April 20, 1999 - $1,100 per share and (ii) after
twelve (12) months from April 20, 1999 - $1,200 per share (as
applicable, the redemption price of $1,100 or $1,200 is
referred to herein as the "Redemption Price").
5.2 Mechanics of Redemption. Prior to any date stipulated
by the Corporation for the redemption of Series 15 Class O
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 15 Class O Preferred Stock.
The Redemption Notice shall state: (i) the Redemption Date of
such shares, (ii) the number of Series 15 Class O 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 15 Class O Preferred Stock to be redeemed
from such holder, and (iv) instructions as to how to specify
to the Corporation the number of Series 15 Class O Preferred
Stock to be redeemed as provided in this Part 5 and, if the
Redemption Notice is mailed to the Holder after the first
twelve (12) months from April 20, 1999, the number of shares
to be converted into Common Stock as provided in Part 4
hereof.
5.3 Rights of Conversion Upon Redemption. If the redemption
occurs during the first twelve (12) months after April 20,
1999, the holder may not convert any redeemed shares. If the
redemption occurs after the first twelve (12) months after
April 20, 1999, then, upon receipt of the Redemption Notice,
any holder of Series 15 Class O Preferred Stock shall have
five business days during which it may exercise the option,
at its sole election, to specify what portion of its Series
15 Class O 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, except that, notwithstanding any provision of
such Part 4 to the contrary, after twelve (12) months from
April 20, 1999, such holder shall have the right to convert
into Common Stock that number of Series 15 Class O Preferred
Stock called for redemption in the Redemption Notice.
5.4 Surrender of Certificates. On or before the Redemption
Date in respect of any Series 15 Class O 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
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<PAGE>
Redemption Notice, and upon the Redemption Date, the Redemption
Price for such shares shall be made payable, in the manner
provided in Section 5.5 hereof, to the order of the person whose
name appears on such certificate or certificates as the owner
thereof, and each surrendered share certificate shall be canceled
and retired. 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 15 Class O
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.
5.5 Payment. On the Redemption Date in respect of any
Series 15 Class O Preferred Stock or prior thereto, the
Corporation shall deposit with any bank or trust company
having a capital and surplus of at least $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 15 Class O Preferred Stock
in respect of which the Corporation has received notice from
the holder thereof of its election to convert Series 15 Class
O 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 15 Class O
Preferred Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends or
return of capital in respect of Series 15 Class O 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
15 Class O Preferred Stock either as to
dividends or upon liquidation, if the holders
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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 15 Class O
Preferred Stock;
6.2.2 On a parity with, or equal to, shares of this
Series 15 Class O 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 15
Class O 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 15 Class O Preferred
Stock; and,
6.2.3 Junior to shares of this Series 15 Class O
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 15 Class O 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 - Amendment and Reissue.
7.1 Amendment. If any proposed amendment to the
Corporation's Certificate of Incorporation (the "Articles")
would alter or change the powers, preferences or special
rights of the Series 15 Class O Preferred Stock so as to
affect such adversely, then the Corporation must obtain the
affirmative vote of such amendment to the Articles at a duly
called and held series meeting of the holders of the Series
15 Class O Preferred Stock or written consent by the holders
of a majority of the Series 15 Class O Preferred Stock then
outstanding. Notwithstanding the above or the provisions of
Section 242(b)(2) of the GCL, the number of authorized shares
of any class or classes of stock of the Corporation may be
increased or decreased (but not below the number of shares
thereof outstanding) by the affirmative vote of the holders
of a majority of the stock of the Corporation entitled to
vote thereon, voting together as a single class, irrespective
of the provisions of this Section 7.1 or Section 242(b)(2) of
the GCL.
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7.2 Authorized. Any shares of Series 15 Class O 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.
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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 TENTH DAY OF AUGUST,
A.D. 1999, AT 12:32 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9914002
2249849 8100 Date: 08-10-99
991331580
<PAGE>
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 16 CLASS P 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 16 Class P 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 16 Class P
Convertible Preferred Stock as set forth in the attached resolutions.
Dated: August 10, 1999
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>
<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 16 CLASS P CONVERTIBLE PREFERRED STOCK
RE: DESIGNATION OF SERIES 16 CLASS P PREFERRED STOCK.
RESOLVED: That the designations, powers, preferences and rights of the
Series 16 Class P Convertible Preferred Stock be, and they hereby are,
as set forth below:
1. Number of Shares of Common Stock of Series 16 Class P
Convertible Preferred Stock
The Corporation hereby authorizes the issuance of up to one thousand
eight hundred two (1,802) shares of Series 16 Class P Convertible
Preferred Stock par value $.001 per share (the "Preferred Stock").
This Preferred Stock shall pay an annual dividend based on a 365 day
calendar year of 4% of the Liquidation Value (as defined in Section 3
hereof) ("Dividend Rate"), payable semiannually within ten (10)
business days after each subsequent June 30th and December 31st (each
a "Dividend Declaration Date"), and shall be payable in cash or shares
of the Corporation's par value $.001 per share common stock (Common
Stock) at the Corporation's option. The first Dividend Declaration
Date shall be December 31st, 1999.
In the event that the Corporation elects to pay the accrued dividends
due as of a Dividend Declaration Date on the outstanding shares of
Preferred Stock in Common Stock of the Corporation, the Holder of each
share of Preferred Stock shall receive that 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
Corporation's Common Stock as reported on the National Association of
Securities Dealers Automated Quotation system ("NASDAQ"), or if the
Common Stock is not listed for trading on the NASDAQ but is listed for
trading on a national securities exchange, the average closing bid
price of the Common Stock as quoted on such national 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 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 Preferred Stock shall have been paid or
declared and set aside for payment.
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2. Voting.
Except as provided under Section 242 of the GCL, holders of Preferred
Stock (the "Holders") shall not have the right to vote on any matter.
Notwithstanding the provisions of Section 242 of the GCL or Section 4
hereof, the number of authorized shares of any class or classes of
stock of the Corporation may be increased or decreased (but not below
the number of shares thereof outstanding) by the affirmative vote of
the holders of a majority of the stock of the Corporation entitled to
vote thereon, voting together as a single class, irrespective of the
provisions of Section 242 of the GCL.
3. Liquidation.
In the event of a voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the Holders of Preferred Stock shall be
entitled to receive out of the assets of the Corporation legally
available for distribution to holders of its capital stock, before any
payment or distribution shall be made to holders of shares of Common
Stock or any other class of stock ranking junior to the Preferred
Stock, an amount per share of Preferred Stock equal to $1,000 (the
"Liquidation Value") plus any accrued and unpaid dividends on the
Preferred Stock. If upon such liquidation, dissolution, or winding up
of the Corporation, whether voluntary or involuntary, the assets to be
distributed among the Holders of Preferred Stock shall be insufficient
to permit payment to the Holders of Preferred Stock of the amount
distributable as aforesaid, then the entire assets of the Corporation
to be so distributed shall be distributed ratably among the Holders of
Preferred Stock and shares of such other classes or series ranking on
a parity with the shares of this Preferred Stock in proportion to the
full distributable amounts for which holders of all such parity shares
are entitled upon such distribution, liquidation, or winding up. Upon
any such liquidation, dissolution or winding up of the Corporation,
after the Holders of Preferred Stock shall have been paid in full the
amounts to which they shall be entitled, the remaining net assets of
the Corporation may be distributed to the holders of stock ranking on
liquidation junior to the Preferred Stock and the Holders of the
Preferred Stock shall have no right or claim to any of the remaining
assets of the Corporation. Written notice of such liquidation,
dissolution or winding up, stating a payment date, the amount of the
liquidation payments and the place where said liquidation payments
shall be payable, shall be given by mail, postage prepaid or by telex
or facsimile to non-U.S. residents, not less than 10 days prior to the
payment date stated therein, to the Holders of record of Preferred
Stock, such notice to be addressed to each such Holder at its address
as shown by the records of the Corporation. For purposes hereof the
shares of Common Stock, shall rank on liquidation junior to the
Preferred Stock.
4. Restrictions.
The Corporation will not amend or modify the terms of its Restated
Certificate of Incorporation so as to adversely alter or change the
Preferred Stock at any time when shares of Preferred Stock are
outstanding, without the approval of the Holders of at least a majority
of the then outstanding shares of Preferred Stock given in writing or
by vote at a meeting, consenting or voting (as the case may be)
separately as a series, except where the vote or written consent of the
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Holders of a greater number of shares of Common Stock of the
Corporation is required by law or by the Corporation's Certificate of
Incorporation, as amended.
5. Optional Conversion.
The Holders of shares of Preferred Stock shall have the following
conversion rights to convert the shares of Preferred Stock into shares
of Common Stock of the Corporation:
(a) No Right to Convert. The Preferred Stock shall not be convertible
into shares of Common Stock until after April 20, 2000.
(b) Conversion Dates. The Preferred Stock may be convertible into
shares of Common Stock at any time after April 20, 2000.
(c) Right to Convert; Conversion Price. Subject to the terms hereof,
as used herein, the term Conversion Price per outstanding share of
Preferred Stock shall be One Dollar and 875/100 ($1.875); except that
after the expiration of one hundred and eighty (180) days after the
Closing Date if the average of the closing bid price per share of
Common Stock quoted on the NASDAQ (or the closing bid price of the
Common Stock as quoted on the national securities exchange if the
Common Stock is not listed for trading on the NASDAQ but is listed for
trading on a national securities exchange) for the five (5) trading
days immediately prior to the particular date of each Conversion Notice
(as defined below) is less than Two Dollars and 34/100 ($2.34), then
the Conversion Price for that particular conversion shall be eighty
percent (80%) of the average of the closing bid price of the Common
Stock on the NASDAQ (or if the Common Stock is not listed for trading
on the NASDAQ but is listed for trading on a national securities
exchange then eighty percent (80%) of the average of the closing bid
price of the Common Stock on the national securities exchange) for the
five (5) trading days immediately prior to the particular date of the
Conversion Notice. Notwithstanding the foregoing, the Conversion Price
shall not be less than a minimum of $1.50 per share ("Minimum
Conversion Price") for a period of twenty-four (24) months from
April 20, 1999.
If any of the outstanding shares of Preferred Stock are converted,
in whole or in part, into Common Stock pursuant to the terms of this
Section 5(c), 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 Stated Value of the Preferred Stock so
surrendered for conversion by (b) the Conversion Price in effect on the
date of that particular Conversion Notice relating to such conversion.
At the time of conversion of shares of the 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 on the shares
of Preferred so converted to the date of the Conversion Notice relating
to such 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 the Conversion Notice
relating to such conversion of the shares of Preferred Stock so
converted divided by the Stock Dividend Price, in effect at the date of
the Conversion Notice relating to such conversion.
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(d) Conversion Notice. The right of conversion shall be exercised by
the Holder thereof by telecopying or faxing an executed and completed
written notice signed by an authorized representative of the Holder,
("Conversion Notice") to the Corporation that the Holder elects to
convert a specified number of shares of Preferred Stock representing a
specified Stated Value thereof into shares of Common Stock and by
delivering by express courier the certificate or certificates of
Preferred Stock being converted to the Corporation at its principal
office (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the Holders of the
Preferred Stock). The business date indicated on a Conversion Notice
which is telecopied to and received by the Corporation in accordance
with the provisions hereof shall be deemed a Conversion Date. The
Conversion Notice shall include therein the Stated Value of shares of
Preferred Stock to be converted, and a calculation (a) of the Stock
Dividend Price, (b) the Conversion Price, and (c) the number of Shares
of Common Stock to be issued in connection with such conversion. The
Corporation shall have the right to review the calculations included in
the Conversion Notice, and shall provide notice of any discrepancy or
dispute therewith within three (3) business days of the receipt
thereof. The Holder shall deliver to the Corporation an original
Conversion Notice and the original Preferred to be converted within
three (3) business days from the date of the Conversion Notice.
(e) Issuance of Certificates - Time Conversion Effected. Promptly,
but in no event more than six (6) business days, after the receipt by
facsimile of the Conversion Notice referred to in Subparagraph (5)(c);
and provided within the six (6) business days the Corporation receives
the certificate or certificates for the shares of Preferred Stock to be
converted, the Corporation shall issue and deliver, or cause to be
issued and delivered, to the Holder, registered in the name of the
Holder, a certificate or certificates for the number of whole shares of
Common Stock into which such shares of Preferred Stock are converted.
Such conversion shall be deemed to have been effected as of the close
of business on the date on which the telecopy or facsimile Conversion
Notice shall have been received by the Corporation, and the rights of
the Holder of such share or shares of Preferred Stock shall cease, at
such time, and the Holder or Holders shall be deemed to have become the
Holder or Holders of record of the shares of Common Stock represented
thereby.
In the event that the shares of Common Stock issuable upon conversion
of the Preferred, are not delivered within six (6) business days of the
date the Corporation receives the Conversion Notice, the Corporation
shall pay to the Holder, by wire transfer, as liquidated damages for
such failure and not as a penalty, for each $100,000 of Preferred
sought to be converted, $500 for each of the first five (5) calendar
days and $1,000 per calendar day thereafter that the shares of Common
Stock are not delivered, which liquidated damages shall begin to run
from the seventh (7th) business day after the Conversion Date. Any and
all payments required pursuant to this paragraph shall be payable only
in cash. Notwithstanding the above, liquidated damages shall not
exceed $2,000.00 per day. In addition to the liquidated damages set
forth herein, in the event the Corporation fails to deliver the shares
of Common Stock within six (6) business days after the Conversion date,
the Corporation agrees to issue the larger number of shares of Common
Stock derived from (i) the original Conversion Notice, or (ii)
utilizing the five lowest closing bid prices of the Corporation's
shares of Common Stock beginning on the Conversion Date and ending on
the day the shares of Common Stock are delivered. The Corporation
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<PAGE>
understands that a delay in the issuance of the shares of Common Stock
could result in economic loss to the Holder. Nothing contained herein,
or in the Preferred shall limit the Holder's rights to pursue actual
damages for the Corporation's failure to issue and deliver shares of
Common Stock to the Holder in accordance with the terms of the
Certificate of Designations, and this Agreement.
(f) Fractional Shares of Common Stock. No fractional shares of Common
Stock shall be issued upon conversion of any Preferred Stock into
shares of Common Stock. All fractional shares of Common Stock shall be
aggregated and then rounded down to the nearest whole share of Common
Stock. In case the number of shares of Preferred Stock represented by
the certificate or certificates surrendered pursuant to Subparagraph
5(d) exceeds the number of shares of Common Stock converted, the
Corporation shall, upon such conversion, execute and deliver to the
Holder, at the expense of the Corporation, a new certificate or
certificates for the number of shares of Preferred Stock represented by
the certificate or certificates surrendered which are not to be
converted.
(g) 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 while any shares of Preferred Stock are outstanding and prior
to the date that the Corporation's Registration Statement covering all
the shares of Common Stock issuable upon the conversion of the
Preferred Stock is declared effective by the U.S. Securities and
Exchange Commission ("Commission"), the Corporation or such successor
corporation as the case may be, shall make appropriate provision so
that the Holder of each share of Preferred Stock then outstanding shall
have the right to convert such share of 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 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 Section 5.
In the event of a Merger or Sale, where the Corporation is not the
surviving Corporation, the Holder shall have the right to redeem all of
the outstanding shares of Preferred Stock at 120% of the Liquidation
Value of each share of Preferred Stock then outstanding plus all
accrued and unpaid dividends (the "Redemption Amount"). The
Corporation shall pay this Redemption Amount in cash within ten (10)
business days of receipt by the Corporation of notice from the Holder,
and receipt by the Corporation of all outstanding shares of Preferred
Stock duly endorsed by the Holder to the Corporation.
(h) 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 Preferred Stock are
issued and outstanding shall declare or pay, 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 if the outstanding shares of
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<PAGE>
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.
(i) Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Preferred Stock shall be
changed into the same or a different number of shares of Common Stock
of any other class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision
or combination or shares of Common Stock provided for in Section 5(h)
hereof), the Conversion Price then in effect shall, concurrently with
the effectiveness of such reorganization or reclassification, be
proportionately adjusted so that the Preferred Stock shall be
convertible into, in lieu of the number of shares of Common Stock which
the holders of Preferred Stock would otherwise have been entitled to
receive, a number of shares of Common Stock 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 Preferred Stock immediately before that change.
6 Redemption.
(a) Redemption at Corporation's Option. Except as otherwise provided
in this Section 6, at any time, and from time to time, 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 16 Class P Preferred Stock at the following cash
redemption prices if redeemed during the following periods: (i) within
twelve (12) months from April 20, 1999 - $1,100 per share, and (ii)
after twelve (12) months from April 20, 1999 - $1,200 per share (as
applicable, the redemption price of $1,100 or $1,200 is referred to
herein as the "Redemption Price").
(b) Mechanics of Redemption. Prior to any date stipulated by the
Corporation for the redemption of Series 16 Class P 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 16
Class P Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 16 Class P
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 16
Class P Preferred Stock to be redeemed from such holder, and (iv)
instructions as to how to specify to the Corporation the number of
Series 16 Class P Preferred Stock to be redeemed as provided in this
Part 6 and, if the Redemption Notice is mailed to the Holder after the
first twelve (12) months from April 20, 1999, the number of shares to
be converted into Common Stock as provided in Part 5 hereof.
(c) Rights of Conversion Upon Redemption. If the redemption occurs
during the first twelve (12) months after April 20, 1999, the holder
may not convert any redeemed shares. If the redemption occurs after
the first twelve (12) months after April 20, 1999, then, upon receipt
of the Redemption Notice, any holder of Series 16 Class P Preferred
Stock shall have five business days during which it may exercise the
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<PAGE>
option, at its sole election, to specify what portion of its Series 16
Class P Preferred Stock called for redemption in the Redemption Notice
shall be redeemed as provided in this Part 6 or converted into Common
Stock in the manner provided in Part 5 hereof, except that,
notwithstanding any provision of such Part 5 to the contrary, after
twelve (12) months from April 20, 1999, such holder shall have the
right to convert into Common Stock that number of Series 16 Class P
Preferred Stock called for redemption in the Redemption Notice.
(d) Surrender of Certificates. On or before the Redemption Date in
respect of any Series 16 Class P 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 hereof, to the order of the person whose name
appears on such certificate or certificates as the owner thereof, and
each surrendered share certificate shall be canceled and retired. 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 16 Class P 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.
(e) Payment. On the Redemption Date in respect of any Series 16 Class
P Preferred Stock or prior thereto, the Corporation shall deposit with
any bank or trust company having a capital and surplus of at least
$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 16 Class P Preferred Stock in respect
of which the Corporation has received notice from the holder thereof of
its election to convert Series 16 Class P 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.
7. Assignment.
Subject to all applicable restrictions on transfer, the rights and
obligations of the Corporation and the Holder of the Preferred Stock
shall be binding upon and benefit the successors, assigns, heirs,
administrators, and transferees of the parties.
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<PAGE>
8. Shares of Common Stock to be Reserved.
The Corporation, upon the effective date of this Certificate of
Designations, has a sufficient number of shares of Common Stock
available to reserve for issuance upon the conversion of all
outstanding shares of Preferred Stock, pursuant to the terms and
conditions set forth in Section 5, and exercise of the Warrants as
defined in Section 12. The Corporation will at all times reserve and
keep available out of its authorized shares of Common Stock, solely for
the purpose of issuance upon the conversion of Preferred Stock, and
exercise of the Warrants, as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of all
outstanding shares of Preferred Stock, and exercise of the Warrants.
The Corporation covenants that all shares of Common Stock which shall
be so issued shall be duly and validly issued, fully paid and non
assessable. The Corporation will take such action as may be required,
if the total number of shares of Common Stock issued and issuable after
such action upon conversion of the Preferred Stock, and exercise of the
Warrants would exceed the total number of shares of Common Stock then
authorized by the Corporation's Certificate of Incorporation, as
amended, or would exceed 19.99% of the shares of Common Stock then
outstanding if required by law or the Rules and Regulations of NASDAQ
or the National Securities Exchange applicable to the Corporation to
take such action as a result of exceeding such 19.99%, in order to
increase the number of shares of Common Stock to permit the Corporation
to issue the number of shares of Common Stock required to effect
conversion of the Preferred, and exercise of the Warrants, to a number
sufficient to permit conversion of the Preferred Stock, and exercise of
the Warrants, including, without limitation, engaging in reasonable
efforts to obtain the requisite stockholder approval of any necessary
amendment to the Corporation's Restated Certificate of Incorporation,
and to obtain shareholders approval in order to effect conversion of
the Preferred Stock, and exercise of the Warrants, if required by law
or the rules or regulations of the NASDAQ or National Securities
Exchange applicable to the Corporation.
8(a) Shareholder Approval. In connection with the issuance to the
Holder of the shares of Preferred Stock, pursuant to this Certificate
of Designations, the Corporation is also issuing (i) certain warrants
("RBB Warrants") to the Holder pursuant to the terms of that certain
Private Securities Subscription Agreement dated June 30, 1998 (the
"Agreement"), providing for the purchase of up to 150,000 shares of
Common Stock at an exercise price of $2.50 per share and (ii) certain
warrants (collectively, the "Liviakis Warrants") to Liviakis Financial
Communication, Inc. ("Liviakis") and Robert B. Prag providing for the
purchase of up to an aggregate of 2,500,000 shares of Common Stock at
an exercise price of $1.875 per share pursuant to the terms of that
Liviakis Agreement dated June 30, 1998, between Liviakis and the
Corporation.
If (i) the aggregate number of shares of Common Stock issued by the
Corporation as a result of any or all of the following: (a) conversion
of the Preferred Stock, (b) payment of dividends accrued on the
Preferred Stock (c) exercise of the RBB Warrants, and (d) exercise of
the Liviakis Warrants exceeds 2,388,347 shares of Common Stock (which
equals 19.9% of the outstanding shares of Common Stock of the
Corporation as of the date of this Certificate of Designations) and
(ii) the Holder has converted or elects to convert any of the then
outstanding shares of Preferred Stock pursuant to the terms of Section
5 at a Conversion Price less than $ 1.875 ($1.875 being the market
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<PAGE>
value per share of Common Stock as quoted on the NASDAQ as of the close
of business on June 30, 1998) pursuant to the terms of Section 5(c)
hereof, other than if the Conversion Price is less than $ 1.875 solely
as a result of the anti-dilution provisions of Section 5(h) and (i)
hereof, then, notwithstanding anything in Section 5 to the contrary,
the Corporation shall not issue any shares of Common Stock as a result
of receipt of a Conversion Notice unless and until the Corporation
shall have obtained approval of its shareholders entitled to vote on
the transactions in accordance with subparagraphs (25)(H)(i)d, (iv) and
(v) of Rule 4310 of the NASDAQ Marketplace Rules ("Shareholder
Approval").
If Shareholder Approval is required as set forth in the above
paragraph, the Corporation shall take all necessary steps to obtain
such Shareholder Approval upon receipt of the Conversion Notice
triggering the need for Shareholder Approval ("Current Conversion
Notice"). If the Corporation has not received from the Holder a
Current Conversion Notice, the Holder, subsequent to January 1st, 1999
may, if the Corporation's shares of Common Stock trade, subsequent to
January 1st, 1999, at a five (5) day average closing bid price below
Two Dollars and 34/00 ($2.34), upon written notice to the Corporation,
require the Corporation to obtain Shareholder Approval ("Holder's
Notice"). The Holder and the Corporation's officers and directors
covenant to vote all shares of Common Stock over which they have voting
control in favor of Shareholder Approval. If the Corporation does not
obtain Shareholder Approval within ninety (90) days of the earlier of
the Corporation's receipt of (i) the Current Conversion Notice or (ii)
the Holder's Notice, and the Holder has not breached its covenant to
vote all shares of Common Stock over which they have voting control in
favor of Shareholder Approval, the Corporation shall pay in cash to the
Holder liquidated damages, in an amount of 4% per month of the
Liquidation Value of each share of Preferred Stock then outstanding,
commencing on the 91st day of the Corporation's receipt of the Holder's
Current Conversion Notice, and continuing every thirty (30) days pro-
rata until such time the Corporation receives Shareholder Approval.
9. No Reissuance of Series 16 Class P Convertible Preferred Stock.
Shares of Preferred Stock which are converted into shares of Common
Stock as provided herein 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.
10. Closing of Books.
The Corporation will at no time close its transfer books against the
transfer of any Preferred Stock or of any shares of Common Stock issued
or issuable upon the conversion of any shares of Common Stock of
Preferred Stock in any manner which interferes with the timely
conversion of such Preferred Stock, except as may otherwise be required
to comply with applicable securities laws.
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<PAGE>
11. No Preemptive Rights.
The 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.
12. Definition of Shares.
As used in this Certificate of Designations, the term "shares of Common
Stock" shall mean and include the Corporation's authorized common
stock, par value $.001, as constituted on the date of filing of these
terms of the Preferred Stock, or in case of any reorganization,
reclassification, or stock split of the outstanding shares of Common
Stock thereof, the stock, securities or assets provided for hereof.
The term "Warrants" as used herein shall have the same meaning as
defined in Section 1 of the Private Securities Subscription Agreement,
dated June 30, 1998, between the Company and RBB Bank
Aktiengesellschaft.
The said determination of the designations, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, relating to the Preferred Stock
was duly made by the Board of Directors pursuant to the provisions of
the Corporation's Restated Certificate of Incorporation and in
accordance with the provisions of the Delaware General Corporation Law.
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<PAGE>
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 TENTH DAY OF AUGUST,
A.D. 1999, AT 12:33 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 9914031
2249849 8100 Date: 08-10-99
991331581
EXCHANGE AGREEMENT
exchanging
1,769 SHARES OF SERIES 3 CLASS C CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
for
1,769 SHARES OF SERIES 11 CLASS K CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
1. Exchange and Subscription for Purchase of Securities. . . .3
1.1 Issuance of Common Stock and Warrants. . . . . . . . .3
1.1.1 Delivery . . . . . . . . . . . . . . . . . .3
1.1.2 Cancellation of Series 3 Preferred . . . . .3
1.1.3 Restrictive Legends. . . . . . . . . . . . .4
1.2 Discharge. . . . . . . . . . . . . . . . . . . . . . .4
1.3 Exchange . . . . . . . . . . . . . . . . . . . . . . .4
1.4 Reporting Company. . . . . . . . . . . . . . . . . . .4
1.5 Terms of the Series 11 Preferred . . . . . . . . . . .5
1.6 No Effect on Series 3 Warrants.. . . . . . . . . . . .5
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . .5
3. Representations, Warranties and Covenants of Subscriber . .5
3.1 Investment Intent. . . . . . . . . . . . . . . . . . .5
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . .5
3.3 Prior Investment Experience. . . . . . . . . . . . . .6
3.4 No Review by the SEC . . . . . . . . . . . . . . . . .6
3.5 Not Registered . . . . . . . . . . . . . . . . . . . .6
3.6 No Public Market . . . . . . . . . . . . . . . . . . .6
3.7 Sophisticated Investor . . . . . . . . . . . . . . . .7
3.8 Tax Consequences . . . . . . . . . . . . . . . . . . .7
3.9 SEC Filing . . . . . . . . . . . . . . . . . . . . . .7
3.10 Documents, Information and Access. . . . . . . . . . .8
3.11 No Registration, Review or Approval. . . . . . . . . .8
3.12 Transfer Restrictions. . . . . . . . . . . . . . . . .8
3.13 No Short Sale. . . . . . . . . . . . . . . . . . . . .8
3.14 No Commission. . . . . . . . . . . . . . . . . . . . .9
3.15 Reliance . . . . . . . . . . . . . . . . . . . . . . .9
3.16 Accuracy or Representations and Warranties . . . . . .9
3.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . .9
3.18 Survival . . . . . . . . . . . . . . . . . . . . . . .9
4. Representations, Warranties and Covenants of the Company. 10
4.1 Organization, Authority, Qualification . . . . . . . 10
4.2 Authorization. . . . . . . . . . . . . . . . . . . . 10
4.3 No Commission. . . . . . . . . . . . . . . . . . . . 10
4.4 Ownership of, and Title to, Securities . . . . . . . 10
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4.5 Exemption from Registration. . . . . . . . . . . . . 10
5. Indemnification.. . . . . . . . . . . . . . . . . . . . . 11
5.1 By the Company . . . . . . . . . . . . . . . . . . . 11
5.2 By the Subscriber. . . . . . . . . . . . . . . . . . 11
5.3 Procedure. . . . . . . . . . . . . . . . . . . . . . 12
6. Securities Legends and Notices. . . . . . . . . . . . . . 12
7. Miscellaneous.
7.1 Assignment and Power of Attorney. . . . . . . . . . .13
7.2 Amendment; Waiver. . . . . . . . . . . . . . . . . . 14
7.3 Binding Effect; Assignment . . . . . . . . . . . . . 14
7.4 Governing Law; Litigation Costs. . . . . . . . . . . 14
7.5 Severability . . . . . . . . . . . . . . . . . . . . 14
7.6 Headings . . . . . . . . . . . . . . . . . . . . . . 14
7.7 Counterparts . . . . . . . . . . . . . . . . . . . . 14
7.8 Transfer Taxes . . . . . . . . . . . . . . . . . . . 15
7.9 Entire Agreement . . . . . . . . . . . . . . . . . . 15
7.10 Authority; Enforceability. . . . . . . . . . . . . . 15
7.11 Notices. . . . . . . . . . . . . . . . . . . . . . . 15
7.12 No Third Party Beneficiaries . . . . . . . . . . . . 16
7.13 Public Announcements . . . . . . . . . . . . . . . . 16
7.14 Conflicts with Subscription Agreement. . . . . . . . 16
Exhibit "A" Certificate of Designations
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THIS EXCHANGE AGREEMENT (the "Agreement") is entered on the
15th day of July 1999, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, having offices at 1940
Northwest 67th Place, Gainesville, Florida 32653 (the "Company"),
and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of
Austria, and having its principal offices at Burgring 16, 8101
Graz, Austria (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber previously entered
into a certain Subscription and Purchase Agreement dated July 17,
1996 ("Subscription Agreement") under which (i) 5,500 shares of
"Series 3 Class C Convertible Preferred Stock," par value $.001 per
share (the "Series 3 Preferred"), and (ii) an aggregate of
2,000,000 common stock purchase warrants were issued to the
Subscriber in the form of one common stock purchase warrant dated
July 19, 1996, providing for the purchase of 1,000,000 shares of
the Company's common stock, par value $.001 per share (the "Common
Stock"), at an exercise price of $2.00 per share, and one common
stock warrant dated July 19, 1996, providing for the purchase of
1,000,000 shares of Common Stock at an exercise price of $3.50 per
share (collectively, the "Series 3 Warrants")(the Common Stock
issuable upon the exercise of the Series 6 Warrants is referred to
hereinafter as the "Warrant Shares");
WHEREAS, pursuant to the terms of the Series 3 Preferred, the
Subscriber has previously converted three thousand seven hundred
thirty-one (3,731) shares of Series 3 Preferred into Common Stock,
leaving 1,769 shares of Series 3 Preferred remaining issued and
outstanding as of the date of this Agreement;
WHEREAS, Subscriber owns all of the issued and outstanding
share of Series 3 Preferred as of the date of this Agreement;
WHEREAS, the Company and the Subscriber both desire to enter
into this Agreement, under which all of the issued and outstanding
shares of the Series 3 Preferred will be delivered and tendered to
the Company in exchange (the "Exchange") for an aggregate of 1,769
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 11 Class K Convertible Preferred Stock" (the
"Series 11 Preferred"), with the Series 11 Preferred containing
such terms, conditions, restrictions and provisions as set forth in
the Series 11 Preferred Certificate of Designations, attached
hereto as Exhibit "A," ("Series 11 Preferred Certificate of
Designations");
WHEREAS, the Subscription Agreement is not terminated, except
from and after the date of this Agreement (i) the Subscriber shall
have no rights under the Subscription Agreement or otherwise
arising out of or in connection with or relating to the Series 3
Preferred or to subscribe for Series 3 Preferred or any shares of
Common Stock issuable or obtainable upon conversion of the Series
3 Preferred and (ii) if the Subscription Agreement is in conflict
with this Agreement, this Agreement shall control in all respects;
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<PAGE>
<PAGE>
WHEREAS, the terms, conditions, restrictions and provisions of
the Series 11 Preferred shall be the same as the terms, conditions,
restrictions and provisions of the Series 3 Preferred, except that
(i) the Series 11 Preferred shall not be convertible for a period
of twelve months from the date of this Agreement, (ii) the Minimum
Conversion Price (as defined herein) shall be $1.50 for a period of
two years from the date of issuance of the Series 11 Preferred,
(iii) for the first twelve months from the date of issuance of the
Series 11 Preferred, the Company shall have the option of redeeming
the Series 11 Preferred for $1,100 per share, at any time and from
time to time during the first twelve months from the date of
issuance of the Series 11 Preferred, and if the Company does redeem
the Series 11 Preferred during the first twelve months from the
date of this Agreement, the holder of the Series 11 Preferred shall
not have the right to convert such Series 11 Preferred, (iv) after
one year from the date of issuance of the Series 11 Preferred, the
Company shall have the option of redeeming the Series 11 Preferred
for $1,200 per share, at any time and from time to time, and (v)
after one year from the date of issuance of the Series 11
Preferred, upon receipt of notice of redemption, the holder of the
Series 11 Preferred being redeemed shall have five business days in
which to exercise an option to convert some or all of the shares of
Series 11 Preferred being redeemed by the Company,
WHEREAS, the Series 3 Warrants shall not be affected by this
Agreement and shall remain issued and outstanding pursuant to the
terms, provisions and conditions of the Series 3 Warrants;
WHEREAS, the shares of Common Stock issuable upon conversion
of the Series 11 Preferred ("Conversion Shares") and the Series 11
Preferred are collectively referred to hereinafter as the
"Securities;"
WHEREAS, the Company and the Subscriber each desire that the
Exchange and the execution of the Agreement act to fully and
completely terminate the Subscriber's rights under the Series 3
Preferred, terminate the Series 3 Preferred, and will act to fully
and completely release all obligations of the Company under the
Series 3 Preferred;
WHEREAS, the Common Stock is listed for trading on the Boston
Stock Exchange and the National Association of Securities Dealers
Automated Quotation SmallCap market ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has been subject to such filing requirements for the past
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") and the
Subscriber received all information as required under Rule 502 of
Regulation D;
WHEREAS, the Subscriber is not a "U. S. Person," as such term
is defined in Regulation S promulgated under the Securities Act;
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<PAGE>
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 exchange of securities by the
Company hereunder will be exempt from registration under applicable
federal (U. S.) securities laws since this is an exchange offer
pursuant to Section 3(a)(9) of the Securities Act, and it is a
private placement and intended to be a nonpublic offering pursuant
to Sections 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act; and,
WHEREAS, the Securities 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. Exchange and Subscription for Purchase of Securities.
1.1 Issuance of Common Stock and Warrants. In full and
complete termination of the Series 3 Preferred and the
Subscriber's rights, and the interest in and to the
Series 3 Preferred, and in full and complete release of
any and all obligations of the Company under the Series
3 Preferred and to the Subscriber under the Series 3
Preferred, at the Closing (as defined herein) the
Subscriber shall deliver all of the issued and
outstanding shares of the Series 3 Preferred to the
Company in exchange for 1,769 shares of Series 11
Preferred, containing such terms, conditions and
provisions as set forth in the Series 11 Preferred
Certificate of Designations, pursuant to the terms and
conditions set forth in this Agreement. Dividends on the
Series 3 Preferred shall cease to accrue as of the close
of business on the day immediately preceding the date of
this Agreement, and dividends on the Series 11 Preferred
shall begin to accrue on the date of this Agreement.
1.1.1 Delivery. Upon receipt by the Company of the
canceled Series 3 Preferred duly assigned to
the Company, the Company shall deliver or
cause to be delivered: (a) to Conner &
Winters, A Professional Corporation ("Conner &
Winters"), a certificate or certificates
representing the 1,769 shares of Series 11
Preferred issued in the name of the
Subscriber, in such denominations as
Subscriber requests in writing, to be held in
escrow by Conner & Winters, for the
Subscriber; and (b) to the Subscriber, written
evidence from the Secretary of State of the
State of Delaware that the Series 11 Preferred
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.
1.1.2 Cancellation of Series 3 Preferred. At the
Closing, RBB Bank does hereby assign and
transfer unto the Company all of the Series 3
Preferred and the Series 3 Preferred shall be
terminated and rendered null and void in all
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<PAGE>
respects, and Conner & Winters is directed to
deliver to the Company the Series 3 Preferred
marked "Canceled."
1.1.3 Restrictive Legends. Subscriber agrees that
all certificates representing the Securities
shall bear the restrictive legend
substantially in the form set forth in Section
6 below which shall include, but not be
limited to, a legend to the effect that (a)the
Securities represented by such certificate
have not been registered under the Securities
Act, and (b) unless there is an effective
registration statement relating to the
Securities, the Securities may not be offered,
sold, transferred, mortgaged, pledged or
hypothecated without an exemption from
registration and an opinion of counsel to 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 Securities Act is
not required in connection with such sale or
transfer and the reasons therefor.
1.2 Discharge. As of the Closing, the Series 3 Preferred
shall be fully terminated in all respects. From and
after the Closing, the Subscriber releases, acquits and
forever discharges the Company, and all of its respective
subsidiaries, affiliates, agents, employees, officers,
and directors, as well as their respective heirs, suc-
cessors, legal and personal representatives, and assigns
of any and all of them, from and against any and all
claims, liabilities, losses, damages, cause or causes of
action of any kind or character whatsoever, whether
liquidated, unliquidated or disputed, asserted or
assertable, known or unknown, in contract or in tort, at
law or in equity, which the Subscriber might now or
hereafter have arising out of or in connection with or
relating to the Series 3 Preferred.
1.3 Exchange. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, at the Closing,
the Company agrees to exchange and deliver to the
Subscriber, and the Subscriber agrees to accept in such
exchange the delivery from the Company, of the Series 11
Preferred in exchange for the transfer of the Series 3
Preferred from the Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company
under the Exchange Act and has filed with the United
States Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The 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 Series 11 Preferred.
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<PAGE>
1.5 Terms of the Series 11 Preferred. The Series 11
Preferred shall contain and be subject to the terms,
conditions, preferences and restrictions set forth in the
Series 11 Preferred Certificate of Designations attached
hereto as Exhibit "A."
1.6 No Effect on Series 3 Warrants. Nothing contained in
this Agreement shall have any effect on the Series 3
Warrants.
2. Closing.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on at the time and on the date that
the 1,769 shares of Series 11 Preferred are delivered by
the Company to Conner & Winters (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
3.1 Investment Intent. The Subscriber represents and
warrants that the shares of Series 11 Preferred are
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 Securities have not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the 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 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 11 Preferred involves a high
degree of risk in that (a) the Company has sustained
losses through December 31, 1998, 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 11
Preferred; (d) an investor may not be able to liquidate
his investment; (e) transferability of the Series 11
Preferred is extremely limited; (f) in the event of a
disposition an investor could sustain the loss of his
entire investment; (g) the Series 11 Preferred represent
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
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<PAGE>
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 and while the Subscriber is a
beneficiary of certain registration rights provided
herein, the Series 11 Preferred subscribed for and that
are purchased under this Agreement and the Conversion
Shares (i) are not registered under applicable federal
(U. S.) or state securities laws, and thus may not be
sold, conveyed, assigned or transferred unless registered
under such laws or unless an exemption from registration
is available under such laws, as more fully described
herein, and (ii) the Series 11 Preferred subscribed for
and that are to be purchased under this Agreement are not
quoted, 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 11 Preferred, 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 11 Preferred has not
been reviewed by the SEC because this private placement
is intended to be an exchange offer under Section 3(a)(9)
of the Securities Act and a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation
D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 11 Preferred 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 11 Preferred. The
Subscriber understands that although there is presently
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<PAGE>
a public market for the Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. 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
understands and hereby acknowledges that the Company is
under no obligation to register the Series 11 Preferred
or the Conversion Shares under the Securities Act. 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 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 11 Preferred; (b) the Subscriber is able to bear
the economic risks inherent in an investment in the
Series 11 Preferred and that an important consideration
bearing on its ability to bear the economic risk of the
purchase of Series 11 Preferred is whether the
Subscriber can afford a complete loss of the Subscriber's
investment in the Series 11 Preferred and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (c) 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 11 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the
Company has made no representation regarding the
potential or actual tax consequences for the Subscriber
which will result from entering into the Agreement and
from consummation of the Exchange. The Subscriber
acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and
the Exchange.
3.9 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, and that such have been furnished to the
Subscriber a reasonable time prior to the date hereof:
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<PAGE>
(i) Annual Report on Form 10-K for the year ended
December 31, 1998 (the "Form 10-K"); (ii) Current Report
on Form 8-K, date of earliest event reported April 8,
1999; (iii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999; and (iv) the information contained
in any reports or documents required to be filed by the
Company under Sections 13(a), 14(a), 14(c) or 15(d) of
the Exchange Act since the distribution of the Form 10-K.
3.10 Documents, Information and Access. The Subscriber's
decision to purchase the Series 11 Preferred 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 documents
and information which Subscriber deems material to an
investment decision with respect to the purchase of
Series 11 Preferred hereunder.
3.11 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of securities pursuant to this Agreement has not
been reviewed or approved by the SEC or by any state
securities commission, authority or agency, and is not
registered under the Securities Laws. The Subscriber
acknowledges, understands and agrees that the shares of
Series 11 Preferred are being offered and exchanged
hereunder pursuant to (i) an exchange offer exemption
under Section 3(a)(9) of the Securities Act and (ii) (x)
a private placement exemption to the registration
provisions of the Securities Act pursuant to Section 4(2)
of such Securities Act and/or Regulation D promulgated
under the Securities Act) and (y) a similar exemption to
the registration provisions of applicable state
securities laws.
3.12 Transfer Restrictions. The Subscriber will not transfer
any Series 11 Preferred Securities purchased under this
Agreement or any Conversion Shares purchased under this
Agreement unless such are registered under the Securities
Laws, or unless an exemption is available under such
Securities Laws, and the Company may, if it chooses,
where an exemption from registration is claimed by such
Subscriber, condition any transfer of Series 11 Preferred
or Conversion Shares out of the Subscriber's name on
receipt of an opinion of the Company's counsel, to the
effect that the proposed transfer is being effected in
accordance with, and does not violate, an applicable
exemption from registration under the Securities Laws, or
an opinion of counsel to the 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.
3.13 No Short Sale. The Subscriber expressly agrees that
until such time that it has sold all of the Securities
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,
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<PAGE>
agreement, arrangement, scheme, or artifice of nature
whatsoever, engage in the short selling of the Company's
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.
3.14 No Commission. The Subscriber agrees and acknowledges
that no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
3.15 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 11
Preferred to the Subscriber.
3.16 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.
3.17 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.
3.18 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
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execution, delivery and Closing of this Agreement, the
sale, purchase, and conversion, if any, of the Series 11
Preferred, the sale of the Conversion Shares, the
exercise of the Series 3 Warrants, and the sale of the
Warrant Shares.
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
exchange the Series 3 Preferred for the Series 11 Preferred, 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
Securities, this Agreement shall have been duly and
validly executed and delivered by the Company and shall
constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms.
4.3 No Commission. The Company agrees and acknowledges that
no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
4.4 Ownership of, and Title to, Securities. The Series 11
Preferred to be exchanged for the Series 3 Preferred by
the Subscriber are, 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 exchange of the Series 11 Preferred (and upon the
conversion of the Series 11 Preferred, in whole or in
part) pursuant to this Agreement, the Subscriber will own
and acquire title to the Series 11 Preferred (and the
Conversion Shares, as the case may be) free and clear of
any and all proxies, voting trusts, pledges, options,
restrictions, or other legal or equitable encumbrance of
any nature whatsoever (other than the restrictions on
transfer due to Securities Laws or as otherwise provided
for in this Agreement or the Series 11 Preferred
Certificate of Designations).
4.5 Exemption from Registration. The offer and exchange of
securities with the Subscriber in accordance with the
terms and provisions of this Agreement is being affected
in accordance with the Securities Act, pursuant to an
exchange offer exemption to the registration provision of
the Securities Act pursuant to Section 3(a)(9) thereunder
and to a private placement exemption to the registration
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<PAGE>
provisions of the Act pursuant to Section 4(2) of such
Act and/or Regulation D promulgated under the Securities
Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
5. Indemnification.
5.1 By the Company. Subject to the terms of this Section 5,
the Company will indemnify and hold harmless the
Subscriber, its directors and officers, and any
underwriter (as defined in the Securities Act) for the
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 in
connection with the Conversion Shares, 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.
5.2 By the Subscriber. Subject to the terms of this Section
5, 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 a Registration Statement filed with the
SEC in connection to the Conversion Shares, 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
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upon, and in strict conformity with, written information
furnished by, or on behalf of, the Subscriber
specifically for use in the preparation thereof.
5.3 Procedure. Promptly after receipt by an indemnified
party pursuant to the provisions of Section 5.1 or 5.2 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 5.1 or 5.2, promptly notify the
indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not
relieve the indemnifying party from any liability which
it may have to any indemnified party otherwise than
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 5.1 or 5.2 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.
6. 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 11 Preferred:
Series 11 Preferred 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,
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HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS
COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
7. Miscellaneous.
7.1 Assignment and Power of Attorney. For purposes of
affecting the exchange of the Series 3 Preferred in
accordance with the terms of this Agreement, at the
Closing the Subscriber does hereby assign all of its
right, title and interest in and to the Series 3
Preferred to the Company and irrevocably makes,
constitutes and appoints the Company as the true and
lawful agents and attorneys-in-fact of the Subscriber
("Attorney-In-Fact") with full power and authority
(except as provided below) to act hereunder individually,
or through duly appointed successor attorneys-in-fact, in
its sole discretion, all as hereinafter provided, in the
name of, for and on behalf of the Subscriber, as fully as
could the Subscriber if present and acting in person,
with respect to all matters in connection with the
transfer of the Series 3 Preferred.
-13-
<PAGE>
7.2 Amendment; Waiver. Neither this Agreement nor the
Warrants shall be changed, modified or amended in any
respect except by the mutual written agreement of the
parties hereto. Any provision of this Agreement or the
Warrants may be waived in writing by the party which is
entitled to the benefits thereof. No waiver of any
provision of this Agreement or the Series 3 Warrants
shall be deemed to, or shall constitute a waiver of, any
other provision hereof or thereof (whether or not
similar), nor shall nay such waiver constitute a
continuing waiver.
7.3 Binding Effect; Assignment. Neither this Agreement nor
the Series 3 Warrants, or any rights or obligations
hereunder or thereunder, are assignable by the
Subscriber.
7.4 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
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.
7.5 Severability. Any term or provisions of this Agreement
or the Series 3 Warrants 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 or thereof affecting the
validity or enforceability of such provision in any other
jurisdiction.
7.6 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or the Warrants or any term or provisions
hereof or thereof.
7.7 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
shall be deemed an original and all of which shall be
considered one and the same agreement, binding on all of
the parties hereto, 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.
-14-
<PAGE>
7.8 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Shares to be sold.
7.9 Entire Agreement. This Agreement, along with the Series
3 Warrants and the Series 11 Preferred 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.
7.10 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.
7.11 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
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
7.11:
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
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<PAGE>
211 North Robinson
Oklahoma City, Oklahoma 73102
Fax No.: (405) 232-2695
If to the Herbert Strauss
Subscriber: RBB Bank Aktiengesellschaft
Burgring 16, 8010 Graz, Austria
Fax No.: 011-43-316-8072 ext. 392
7.12 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.
7.13 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.
7.14 Conflicts with Subscription Agreement. In the event of
a conflict between the terms of the Subscription
Agreement and the terms of this Agreement, this Agreement
shall control in all respects.
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement on the 15th day of July 1999.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
___________________________
Dr. Louis F. Centofanti
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/ Herbert Strauss
___________________________
Herbert Strauss
Headtrader
-16-
EXCHANGE AGREEMENT
exchanging
916 SHARES OF SERIES 8 CLASS H CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
for
916 SHARES OF SERIES 12 CLASS L CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
1. Exchange and Subscription for Purchase of Securities. . . .3
1.1 Issuance of Common Stock and Warrants. . . . . . . . .3
1.1.1 Delivery . . . . . . . . . . . . . . . . . .4
1.1.2 Cancellation of Series 8 Preferred . . . . .4
1.1.4 Restrictive Legends. . . . . . . . . . . . .4
1.2 Discharge. . . . . . . . . . . . . . . . . . . . . . .5
1.3 Exchange . . . . . . . . . . . . . . . . . . . . . . .5
1.4 Reporting Company. . . . . . . . . . . . . . . . . . .5
1.5 Terms of the Series 12 Preferred . . . . . . . . . . .5
1.6 No Effect on Series 6 Warrants.. . . . . . . . . . . .5
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . .5
3. Representations, Warranties and Covenants of Subscriber . .5
3.1 Investment Intent. . . . . . . . . . . . . . . . . . .5
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . .6
3.3 Prior Investment Experience. . . . . . . . . . . . . .7
3.4 No Review by the SEC . . . . . . . . . . . . . . . . .7
3.5 Not Registered . . . . . . . . . . . . . . . . . . . .7
3.6 No Public Market . . . . . . . . . . . . . . . . . . .7
3.7 Sophisticated Investor . . . . . . . . . . . . . . . .8
3.8 Tax Consequences . . . . . . . . . . . . . . . . . . .8
3.9 SEC Filing . . . . . . . . . . . . . . . . . . . . . .8
3.10 Documents, Information and Access. . . . . . . . . . .8
3.11 No Registration, Review or Approval. . . . . . . . . .8
3.12 Transfer Restrictions. . . . . . . . . . . . . . . . .9
3.13 No Short Sale. . . . . . . . . . . . . . . . . . . . .9
3.14 No Commission. . . . . . . . . . . . . . . . . . . . .9
3.15 Reliance . . . . . . . . . . . . . . . . . . . . . . .9
3.16 Accuracy or Representations and Warranties . . . . . 10
3.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . 10
3.18 Survival . . . . . . . . . . . . . . . . . . . . . . 10
4. Representations, Warranties and Covenants of the Company. 10
4.1 Organization, Authority, Qualification . . . . . . . 10
4.2 Authorization. . . . . . . . . . . . . . . . . . . . 10
4.3 No Commission. . . . . . . . . . . . . . . . . . . . 11
4.4 Ownership of, and Title to, Securities . . . . . . . 11
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<PAGE>
4.5 Exemption from Registration. . . . . . . . . . . . . 11
5. Registration Rights . . . . . . . . . . . . . . . . . . . 11
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.
8.1 Assignment and Power of Attorney. . . . . . . . . . 14
8.2 Amendment; Waiver. . . . . . . . . . . . . . . . . . 15
8.3 Binding Effect; Assignment . . . . . . . . . . . . . 15
8.4 Governing Law; Litigation Costs. . . . . . . . . . . 15
8.5 Severability . . . . . . . . . . . . . . . . . . . . 15
8.6 Headings . . . . . . . . . . . . . . . . . . . . . . 15
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . 15
8.8 Transfer Taxes . . . . . . . . . . . . . . . . . . . 16
8.9 Entire Agreement . . . . . . . . . . . . . . . . . . 16
8.10 Authority; Enforceability. . . . . . . . . . . . . . 16
8.11 Notices. . . . . . . . . . . . . . . . . . . . . . . 16
8.12 No Third Party Beneficiaries . . . . . . . . . . . . 17
8.13 Public Announcements . . . . . . . . . . . . . . . . 17
8.14 Conflicts with First Exchange Agreement. . . . . . . 17
Exhibit "A" Certificate of Designations
-ii-
<PAGE>
THIS EXCHANGE AGREEMENT (the "Agreement") is entered on the
15th day of July 1999, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, having offices at 1940
Northwest 67th Place, Gainesville, Florida 32653 (the "Company"),
and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of
Austria, and having its principal offices at Burgring 16, 8101
Graz, Austria (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber previously entered
into a certain Subscription and Purchase Agreement dated as of the
9th day of June, 1997 ("Subscription Agreement") under which (i)
2,500 shares of "Series 4 Class D Convertible Preferred Stock," par
value $.001 per share (the "Series 4 Preferred"), and (ii) an
aggregate of 375,000 common stock purchase warrants were issued to
the Subscriber in the form of one common stock purchase warrant
dated June 9, 1997, providing for the purchase of 187,500 shares of
the Company's common stock, par value $.001 per share (the "Common
Stock"), at an exercise price of $2.10 per share, and one common
stock warrant dated June 9, 1997, providing for the purchase of
187,500 shares of Common Stock at an exercise price of $2.50 per
share (collectively, the "June 1997 Warrants");
WHEREAS, the Company and the Subscriber previously entered
into a certain Exchange Agreement dated as of the 6th day of
November, 1997, but effective as of the 16th day of September, 1997
("First Exchange Agreement"), under which the Subscription
Agreement was terminated in all respects and all of the Series 4
Preferred and the June 1997 Warrants were delivered and tendered to
the Company in exchange (the "First Exchange") for (i) an aggregate
of 2,500 shares of "Series 6 Class F Convertible Preferred Stock,"
par value $.001 per share (the "Series 6 Preferred") and (ii) an
aggregate of 656,250 common stock purchase warrants (the "Series 6
Warrants"), each providing for the purchase of one share of the
Company's Common Stock, 375,000 of which are exercisable at $1.8125
per share and 281,250 of which are exercisable at $2.125 per share
(the Common Stock issuable upon the exercise of the Series 6
Warrants is referred to hereinafter as the "Warrant Shares");
WHEREAS, the Company and the Subscriber previously entered
into a certain Exchange Agreement dated as of the 30th day of
April, 1998, but effective as of the 28th day of February, 1998
("Second Exchange Agreement"), under which all of the Series 6
Preferred were delivered and tendered to the Company in exchange
(the "Second Exchange") for an aggregate of 2,500 shares of "Series
8 Class H Convertible Preferred Stock," par value $.001 per share
(the "Series 8 Preferred");
WHEREAS, the First Exchange Agreement is not terminated,
except from and after the date of this Agreement, (i) the
Subscriber shall have no rights under the First Exchange Agreement
or otherwise arising out of or in connection with or relating to
the Series 6 Preferred or to subscribe for Series 6 Preferred or
any shares of Common Stock issuable or obtainable upon conversion
of the Series 6 Preferred and (ii) if the First Exchange Agreement
is in conflict with this Agreement, this Agreement shall control in
all respects;
-1-
<PAGE>
WHEREAS, pursuant to the terms of the Series 8 Preferred, the
Subscriber has previously converted 1,584 shares of Series 8
Preferred into Common Stock leaving 916 shares remaining issued and
outstanding as of the date of this Agreement;
WHEREAS, the Subscriber owns all of the issued and outstanding
shares of Series 8 Preferred as of the date of this Agreement;
WHEREAS, the Company and the Subscriber both desire to enter
into this Agreement, under which all of the issued and outstanding
shares of the Series 8 Preferred will be delivered and tendered to
the Company in exchange (the "Third Exchange") for an aggregate of
916 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 12 Class L Convertible Preferred Stock" (the
"Series 12 Preferred"), with the Series 12 Preferred containing
such terms, conditions, restrictions and provisions as set forth in
the Series 12 Preferred Certificate of Designations, attached
hereto as Exhibit "A," ("Series 12 Preferred Certificate of
Designations");
WHEREAS, upon execution of this Agreement, the Second Exchange
Agreement is to be terminated in all respects;
WHEREAS, the terms, conditions, restrictions and provisions of
the Series 12 Preferred shall be the same as the terms, conditions,
restrictions and provisions of the Series 8 Preferred, except that
(i) the Series 12 Preferred shall not be convertible for a period
of twelve months from the date of this Agreement, (ii) the Minimum
Conversion Price (as defined herein) shall be $1.50 for a period of
twenty-four months from the date of issuance of the Series 12
Preferred, (iii) the Company shall, at any time and from time to
time within 120 days from the date of issuance of the Series 12
Preferred, have the option to redeem up to 300 shares of Series 12
Preferred of the 916 currently outstanding for $1,000 per share,
and upon such redemption the holder of the Series 12 Preferred so
redeemed shall not have the right to convert such redeemed shares;
(iv) for a period of twelve months from the date of issuance of the
Series 12 Preferred, the Company shall, at any time and from time
to time, have the option of redeeming the Series 12 Preferred for
$1,100 per share, except as otherwise provided in (iii) above, and
upon such date of redemption the holder of the Series 12 Preferred
so redeemed shall not have the right to convert such redeemed
shares; (v) after a period of twelve months from the issuance of
the Series 12 Preferred, the Company shall, at any time and from
time to time, have the option of redeeming the outstanding shares
of Series 12 Preferred for $1,200 per share, and (vi) after a
period of twelve months from the date of this Agreement, upon
receipt of notice of redemption, the holder of the Series 12
Preferred being redeemed shall have five business days in which to
exercise an option to convert some or all of the shares of Series
12 Preferred being redeemed by the Company;
WHEREAS, the Series 6 Warrants shall not be affected by this
Agreement and shall remain issued and outstanding pursuant to the
terms, provisions and conditions of the Series 6 Warrants;
-2-
<PAGE>
WHEREAS, the shares of Common Stock issuable upon conversion
of the Series 12 Preferred ("Conversion Shares") and the Series 12
Preferred are collectively referred to hereinafter as the
"Securities;"
WHEREAS, the Company and the Subscriber each desire that the
Third Exchange and the execution of the Agreement act to fully and
completely terminate the Subscriber's rights under the Series 8
Preferred, terminate the Series 8 Preferred, and will act to fully
and completely release all obligations of the Company under the
Series 8 Preferred;
WHEREAS, the Common Stock is listed for trading on the Boston
Stock Exchange and the National Association of Securities Dealers
Automated Quotation SmallCap market ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has been subject to such filing requirements for the past
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") and the
Subscriber received all information as required under Rule 502 of
Regulation D;
WHEREAS, the Subscriber is not a "U. S. Person," as such term
is defined in Regulation S promulgated under the Securities Act;
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 exchange of securities by the
Company hereunder will be exempt from registration under applicable
federal (U. S.) securities laws since this is an exchange offer
pursuant to Section 3(a)(9) of the Securities Act, and it is a
private placement and intended to be a nonpublic offering pursuant
to Sections 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act; and,
WHEREAS, the Securities 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. Exchange and Subscription for Purchase of Securities.
1.1 Issuance of Common Stock and Warrants. In full and
complete termination of the Series 8 Preferred and the
Subscriber's rights, and the interest in and to the
Series 8 Preferred, and in full and complete release of
any and all obligations of the Company under the Series
8 Preferred and to the Subscriber under the Series 8
Preferred, at the Closing (as defined herein) the
-3-
<PAGE>
Subscriber shall deliver all of the issued and
outstanding shares of the Series 8 Preferred to the
Company in exchange for 916 shares of Series 12
Preferred, containing such terms, conditions and
provisions as set forth in the Series 12 Preferred
Certificate of Designations, pursuant to the terms and
conditions set forth in this Agreement. Dividends on the
Series 8 Preferred shall cease to accrue as of the close
of business on the day immediately preceding the date of
this Agreement and dividends on the Series 12 Preferred
shall begin to accrue on the date of this Agreement.
1.1.1 Delivery. Upon receipt by the Company of the
canceled Series 8 Preferred duly assigned to
the Company, the Company shall deliver or
cause to be delivered: (a) to Conner &
Winters, A Professional Corporation ("Conner &
Winters"), a certificate or certificates
representing the 916 shares of Series 12
Preferred issued in the name of the
Subscriber, in such denominations as
Subscriber requests in writing, to be held in
escrow by Conner & Winters, for the
Subscriber; and (b) to the Subscriber, written
evidence from the Secretary of State of the
State of Delaware that the Series 12 Preferred
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.
1.1.2 Cancellation of Series 8 Preferred. At the
Closing, the Subscriber does hereby assign and
transfer unto the Company all of the Series 8
Preferred and the Series 8 Preferred shall be
terminated and rendered null and void in all
respects, and Conner & Winters is directed to
deliver to the Company the Series 8 Preferred
marked "Canceled."
1.1.3 Termination of Second Exchange Agreement. The
Second Exchange Agreement is hereby terminated
in its entirety.
1.1.4 Restrictive Legends. Subscriber agrees that,
subject to the provisions of Section 5 below,
all certificates representing the Securities
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
Securities represented by such certificate
have not been registered under the Securities
Act, and (b) unless there is an effective
registration statement relating to the
Securities, the Securities may not be offered,
sold, transferred, mortgaged, pledged or
hypothecated without an exemption from
registration and an opinion of counsel to 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 Securities 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.
-4-
<PAGE>
1.2 Discharge. As of the Closing, the Series 8 Preferred
shall be fully terminated in all respects. From and
after the Closing, the Subscriber releases, acquits and
forever discharges the Company, and all of its respective
subsidiaries, affiliates, agents, employees, officers,
and directors, as well as their respective heirs, suc-
cessors, legal and personal representatives, and assigns
of any and all of them, from and against any and all
claims, liabilities, losses, damages, cause or causes of
action of any kind or character whatsoever, whether
liquidated, unliquidated or disputed, asserted or
assertable, known or unknown, in contract or in tort, at
law or in equity, which the Subscriber might now or
hereafter have arising out of or in connection with or
relating to the Series 8 Preferred.
1.3 Exchange. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, at the Closing,
the Company agrees to exchange and deliver to the
Subscriber, and the Subscriber agrees to accept in such
exchange the delivery from the Company, of the Series 12
Preferred in exchange for the transfer of the Series 8
Preferred from the Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company
under the Exchange Act and has filed with the United
States Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The 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 Series 12 Preferred.
1.5 Terms of the Series 12 Preferred. The Series 12
Preferred shall contain and be subject to the terms,
conditions, preferences and restrictions set forth in the
Series 12 Preferred Certificate of Designations attached
hereto as Exhibit "A."
1.6 No Effect on Series 6 Warrants. Nothing contained in
this Agreement shall have any effect on the Series 6
Warrants.
2. Closing.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on at the time and on the date that
the 916 shares of Series 12 Preferred are delivered by
the Company to Conner & Winters (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
3.1 Investment Intent. The Subscriber represents and
warrants that the shares of Series 12 Preferred are
being, and any underlying Conversion Shares will be,
-5-
<PAGE>
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 Securities have not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the 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 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 12 Preferred involves a high
degree of risk in that (a) the Company has sustained
losses through December 31, 1998, 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 12
Preferred; (d) an investor may not be able to liquidate
his investment; (e) transferability of the Series 12
Preferred is extremely limited; (f) in the event of a
disposition an investor could sustain the loss of his
entire investment; (g) the Series 12 Preferred represent
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 and while the Subscriber is a
beneficiary of certain registration rights provided
herein, the Series 12 Preferred subscribed for and that
are purchased under this Agreement and the Conversion
Shares (i) are not registered under applicable federal
(U. S.) or state securities laws, and thus may not be
sold, conveyed, assigned or transferred unless registered
under such laws or unless an exemption from registration
is available under such laws, as more fully described
herein, and (ii) the Series 12 Preferred subscribed for
and that are to be purchased under this Agreement are not
quoted, 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 12 Preferred, 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 or
on any other organized market or quotation system.
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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 12 Preferred has not
been reviewed by the SEC because this private placement
is intended to be an exchange offer under Section 3(a)(9)
of the Securities Act and a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation
D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 12 Preferred 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 12 Preferred. The
Subscriber understands that although there is presently
a public market for the Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. 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
understands and hereby acknowledges that the Company is
under no obligation to register the Series 12 Preferred
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").
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3.7 Sophisticated Investor. That (a) 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 12 Preferred; (b) the Subscriber is able to bear
the economic risks inherent in an investment in the
Series 12 Preferred and that an important consideration
bearing on its ability to bear the economic risk of the
purchase of Series 12 Preferred is whether the
Subscriber can afford a complete loss of the Subscriber's
investment in the Series 12 Preferred and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (c) 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 12 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the
Company has made no representation regarding the
potential or actual tax consequences for the Subscriber
which will result from entering into the Agreement and
from consummation of the Second Exchange. The Subscriber
acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and
the Second Exchange.
3.9 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, and that such have been furnished to the
Subscriber a reasonable time prior to the date hereof:
(i) Annual Report on Form 10-K for the year ended
December 31, 1998 (the "Form 10-K"); (ii) Current Report
on Form 8-K, date of earliest event reported April 8,
1999; (iii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999; and (iv) the information contained
in any reports or documents required to be filed by the
Company under Sections 13(a), 14(a), 14(c) or 15(d) of
the Exchange Act since the distribution of the Form 10-K.
3.10 Documents, Information and Access. The Subscriber's
decision to purchase the Series 12 Preferred 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 documents
and information which Subscriber deems material to an
investment decision with respect to the purchase of
Series 12 Preferred hereunder.
3.11 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of securities pursuant to this Agreement has not
been reviewed or approved by the SEC or by any state
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securities commission, authority or agency, and is not
registered under the Securities Laws. The Subscriber
acknowledges, understands and agrees that the shares of
Series 12 Preferred are being offered and exchanged
hereunder pursuant to (i) an exchange offer exemption
under Section 3(a)(9) of the Securities Act and (ii) (x)
a private placement exemption to the registration
provisions of the Securities Act pursuant to Section 4(2)
of such Securities Act and/or Regulation D promulgated
under the Securities Act) and (y) a similar exemption to
the registration provisions of applicable state
securities laws.
3.12 Transfer Restrictions. The Subscriber will not transfer
any Series 12 Preferred Securities purchased under this
Agreement or any Conversion Shares purchased under this
Agreement unless such are registered under the Securities
Laws, or unless an exemption is available under such
Securities Laws, and the Company may, if it chooses,
where an exemption from registration is claimed by such
Subscriber, condition any transfer of Series 12 Preferred
or Conversion Shares out of the Subscriber's name on
receipt of an opinion of the Company's counsel, to the
effect that the proposed transfer is being effected in
accordance with, and does not violate, an applicable
exemption from registration under the Securities Laws, or
an opinion of counsel to the 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.
3.13 No Short Sale. The Subscriber expressly agrees that
until such time that it has sold all of the Securities
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
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.
3.14 No Commission. The Subscriber agrees and acknowledges
that no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Third
Exchange.
3.15 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this
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Agreement in determining whether to accept this
subscription and to sell and issue the Series 12
Preferred to the Subscriber.
3.16 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.
3.17 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.
3.18 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, purchase, and conversion, if any, of the Series 12
Preferred, the sale of the Conversion Shares, the
exercise of the Series 6 Warrants, and the sale of the
Warrant Shares.
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
exchange the Series 8 Preferred for the Series 12 Preferred, 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
Securities, this Agreement shall have been duly and
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<PAGE>
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 No Commission. The Company agrees and acknowledges that
no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Third
Exchange.
4.4 Ownership of, and Title to, Securities. The Series 12
Preferred to be exchanged for the Series 8 Preferred by
the Subscriber are, 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 exchange of the Series 12 Preferred (and upon the
conversion of the Series 12 Preferred, in whole or in
part) pursuant to this Agreement, the Subscriber will own
and acquire title to the Series 12 Preferred (and the
Conversion Shares, as the case may be) free and clear of
any and all proxies, voting trusts, pledges, options,
restrictions, or other legal or equitable encumbrance of
any nature whatsoever (other than the restrictions on
transfer due to Securities Laws or as otherwise provided
for in this Agreement or the Series 12 Preferred
Certificate of Designations).
4.5 Exemption from Registration. The offer and exchange of
securities with the Subscriber in accordance with the
terms and provisions of this Agreement is being affected
in accordance with the Securities Act, pursuant to an
exchange offer exemption to the registration provision of
the Securities Act pursuant to Section 3(a)(9) thereunder
and to a private placement exemption to the registration
provisions of the Act pursuant to Section 4(2) of such
Act and/or Regulation D promulgated under the Securities
Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
5. Registration Rights. In order to induce the Subscriber to
enter into this Agreement and exchange the Series 8 Preferred for
the Series 12 Preferred, the Company hereby covenants and agrees to
grant to the Subscriber the registration rights with respect to the
Conversion Shares and the shares of Common Stock which may issue as
dividends on the Series 12 Preferred, as set forth in Section 5 of
the First Exchange Agreement regarding the shares of Common Stock
issuable upon conversion of the Series 8 Preferred and as dividends
thereon. The registration rights as set forth in Section 5 of the
First Exchange Agreement regarding the shares of Common Stock
issuable upon exercise of the Series 6 Warrants are not changed by
this Agreement.
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
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
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<PAGE>
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 12 Preferred:
Series 12 Preferred 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
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
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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 EXCHANGE
AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND THE
COMPANY, DATED AS OF FEBRUARY 28, 1998, A COPY OF WHICH
IS ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS
COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THESE SHARES OF COMMON
STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET
FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND BETWEEN
THE HOLDER HEREOF AND THE COMPANY, DATED AS OF FEBRUARY
28, 1998, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Assignment and Power of Attorney. For purposes of
affecting the exchange of the Series 8 Preferred in
accordance with the terms of this Agreement, at the
Closing the Subscriber does hereby assign all of its
right, title and interest in and to the Series 8
Preferred to the Company and irrevocably makes,
constitutes and appoints the Company as the true and
lawful agents and attorneys-in-fact of the Subscriber
("Attorney-In-Fact") with full power and authority
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(except as provided below) to act hereunder individually,
or through duly appointed successor attorneys-in-fact, in
its sole discretion, all as hereinafter provided, in the
name of, for and on behalf of the Subscriber, as fully as
could the Subscriber if present and acting in person,
with respect to all matters in connection with the
transfer of the Series 8 Preferred Stock.
8.2 Amendment; Waiver. Neither this Agreement nor the
Warrants shall be changed, modified or amended in any
respect except by the mutual written agreement of the
parties hereto. Any provision of this Agreement or the
Warrants may be waived in writing by the party which is
entitled to the benefits thereof. No waiver of any
provision of this Agreement or the Series 6 Warrants
shall be deemed to, or shall constitute a waiver of, any
other provision hereof or thereof (whether or not
similar), nor shall nay such waiver constitute a
continuing waiver.
8.3 Binding Effect; Assignment. Neither this Agreement nor
the Series 6 Warrants, or any rights or obligations
hereunder or thereunder, are assignable by the
Subscriber.
8.4 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
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.
8.5 Severability. Any term or provisions of this Agreement
or the Series 6 Warrants 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 or thereof affecting the
validity or enforceability of such provision in any other
jurisdiction.
8.6 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or the Warrants or any term or provisions
hereof or thereof.
8.7 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
shall be deemed an original and all of which shall be
considered one and the same agreement, binding on all of
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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.
8.8 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Shares to be sold.
8.9 Entire Agreement. This Agreement, along with the Series
6 Warrants and the Series 12 Preferred 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.
8.10 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.
8.11 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
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
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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 Herbert Strauss
Subscriber: RBB Bank Aktiengesellschaft
Burgring 16, 8010 Graz, Austria
Fax No.: 011-43-316-8072 ext. 392
8.12 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.
8.13 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.
8.14 Conflicts with First Exchange Agreement. In the event of
a conflict between the terms of the First Exchange
Agreement and the terms of this Agreement, this Agreement
shall control in all respects.
-17-
<PAGE>
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement on the 15th day of July 1999.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
___________________________
Dr. Louis F. Centofanti
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/ Herbert Strauss
___________________________
Herbert Strauss
Headtrader
-18-
EXCHANGE AGREEMENT
exchanging
2,252 SHARES OF SERIES 10 CLASS J CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
for
2,252 SHARES OF SERIES 13 CLASS M CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
1. Exchange and Subscription for Purchase of Securities. . . .3
1.1 Issuance of Common Stock and Warrants. . . . . . . . .3
1.1.1 Delivery . . . . . . . . . . . . . . . . . .3
1.1.2 Cancellation of Series 10 Preferred. . . . .4
1.1.3 Restrictive Legends. . . . . . . . . . . . .4
1.2 Discharge. . . . . . . . . . . . . . . . . . . . . . .4
1.3 Exchange . . . . . . . . . . . . . . . . . . . . . . .4
1.4 Reporting Company. . . . . . . . . . . . . . . . . . .4
1.5 Terms of the Series 13 Preferred . . . . . . . . . . .5
1.6 No Effect on Series 10 Warrants. . . . . . . . . . . .5
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . .5
3. Representations, Warranties and Covenants of Subscriber . .5
3.1 Investment Intent. . . . . . . . . . . . . . . . . . .5
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . .5
3.3 Prior Investment Experience. . . . . . . . . . . . . .6
3.4 No Review by the SEC . . . . . . . . . . . . . . . . .6
3.5 Not Registered . . . . . . . . . . . . . . . . . . . .6
3.6 No Public Market . . . . . . . . . . . . . . . . . . .6
3.7 Sophisticated Investor . . . . . . . . . . . . . . . .7
3.8 Tax Consequences . . . . . . . . . . . . . . . . . . .7
3.9 SEC Filing . . . . . . . . . . . . . . . . . . . . . .7
3.10 Documents, Information and Access. . . . . . . . . . .8
3.11 No Registration, Review or Approval. . . . . . . . . .8
3.12 Transfer Restrictions. . . . . . . . . . . . . . . . .8
3.13 No Short Sale. . . . . . . . . . . . . . . . . . . . .8
3.14 No Commission. . . . . . . . . . . . . . . . . . . . .9
3.15 Reliance . . . . . . . . . . . . . . . . . . . . . . .9
3.16 Accuracy or Representations and Warranties . . . . . .9
3.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . .9
3.18 Survival . . . . . . . . . . . . . . . . . . . . . . .9
4. Representations, Warranties and Covenants of the Company. 10
4.1 Organization, Authority, Qualification . . . . . . . 10
4.2 Authorization. . . . . . . . . . . . . . . . . . . . 10
4.3 No Commission. . . . . . . . . . . . . . . . . . . . 10
4.4 Ownership of, and Title to, Securities . . . . . . . 10
-i-
<PAGE>
4.5 Exemption from Registration. . . . . . . . . . . . . 10
5. Registration Rights . . . . . . . . . . . . . . . . . . . 11
6. Indemnification.. . . . . . . . . . . . . . . . . . . . . 11
6.1 By the Company . . . . . . . . . . . . . . . . . . . 11
6.2 By the Subscriber. . . . . . . . . . . . . . . . . . 11
6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . 12
7. Securities Legends and Notices. . . . . . . . . . . . . . 12
8. Miscellaneous.
8.1 Assignment and Power of Attorney. . . . . . . . . . .14
8.2 Amendment; Waiver. . . . . . . . . . . . . . . . . . 14
8.3 Binding Effect; Assignment . . . . . . . . . . . . . 14
8.4 Governing Law; Litigation Costs. . . . . . . . . . . 14
8.5 Severability . . . . . . . . . . . . . . . . . . . . 15
8.6 Headings . . . . . . . . . . . . . . . . . . . . . . 15
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . 15
8.8 Transfer Taxes . . . . . . . . . . . . . . . . . . . 15
8.9 Entire Agreement . . . . . . . . . . . . . . . . . . 15
8.10 Authority; Enforceability. . . . . . . . . . . . . . 15
8.11 Notices. . . . . . . . . . . . . . . . . . . . . . . 16
8.12 No Third Party Beneficiaries . . . . . . . . . . . . 16
8.13 Public Announcements . . . . . . . . . . . . . . . . 16
8.14 Conflicts with Subscription Agreement. . . . . . . . 17
Exhibit "A" Certificate of Designations
-ii-
<PAGE>
THIS EXCHANGE AGREEMENT (the "Agreement") is entered on the
15th day of July 1999, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, having offices at 1940
Northwest 67th Place, Gainesville, Florida 32653 (the "Company"),
and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of
Austria, and having its principal offices at Burgring 16, 8101
Graz, Austria (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber previously entered
into a certain Private Securities Subscription Agreement dated June
30, 1998 ("Subscription Agreement") under which (i) 3,000 shares of
"Series 10 Class Convertible Preferred Stock," par value $.001 per
share (the "Series 10 Preferred"), and (ii) an aggregate of 350,000
common stock purchase warrants were issued to the Subscriber in the
form of one common stock purchase warrant dated June 30, 1998,
providing for the purchase of 200,000 shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), at an
exercise price of $1.875 per share, and one common stock warrant
dated June 30, 1998, providing for the purchase of 150,000 shares
of Common Stock at an exercise price of $2.50 per share
(collectively, the "Series 10 Warrants")(the Common Stock issuable
upon the exercise of the Series 10 Warrants is referred to
hereinafter as the "Warrant Shares");
WHEREAS, pursuant to the terms of the Series 10 Preferred, the
Subscriber has previously converted seven hundred forty-eight (748)
shares of Series 10 Preferred into Common Stock leaving two
thousand two hundred fifty-two (2,252) shares remaining issued and
outstanding as of the date of this Agreement;
WHEREAS, the subscriber owns all of the issued and outstanding
shares of Series 10 Preferred as of the date of this Agreement;
WHEREAS, the Company and the Subscriber both desire to enter
into this Agreement, under which all of the issued and outstanding
shares of the Series 10 Preferred will be delivered and tendered to
the Company in exchange (the "Exchange") for an aggregate of two
thousand two hundred fifty-two (2,252) 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 13 Class
M Convertible Preferred Stock" (the "Series 13 Preferred"), with
the Series 13 Preferred containing such terms, conditions,
restrictions and provisions as set forth in the Series 13 Preferred
Certificate of Designations, attached hereto as Exhibit "A,"
("Series 13 Preferred Certificate of Designations");
WHEREAS, the Subscription Agreement is not terminated, except
from and after the date of this Agreement (i) the Subscriber shall
have no rights under the Subscription Agreement or otherwise
arising out of or in connection with or relating to the Series 10
Preferred or to subscribe for Series 10 Preferred or any shares of
Common Stock issuable or obtainable upon conversion of the Series
10 Preferred and (ii) if the Subscription Agreement is in conflict
with this Agreement, this Agreement shall control in all respects;
-1-
<PAGE>
WHEREAS, the terms, conditions, restrictions and provisions of
the Series 13 Preferred shall be the same as the terms, conditions,
restrictions and provisions of the Series 10 Preferred, except that
(i) the Series 13 Preferred shall not be convertible for a period
of twelve months from the date of this Agreement, (ii) the Minimum
Conversion Price (as defined herein) shall be $1.50 for a period of
twenty-four months from the date of issuance of the Series 13
Preferred, (iii) the Company shall, at any time and from time to
time within 120 days from the date of issuance of the Series 13
Preferred have the option to redeem up to 450 shares of Series 13
Preferred of the 2,252 currently outstanding for $1,000 per share,
and upon such redemption the holder of the Series 13 Preferred so
redeemed shall not have the right to convert such redeemed shares,
(iv) for a period of twelve months from the date of issuance of the
Series 13 Preferred, the Company shall at any time and from time to
time, have the option of redeeming the Series 13 Preferred for
$1,100 per share, except as otherwise provided in (iii) above, and
upon such redemption the holder of the Series 13 Preferred so
redeemed shall not have the right to convert such redeemed shares,
(v) after a period of twelve months from the date of issuance of
the Series 13 Preferred, the Company shall, at any time and from
time to time, have the option of redeeming the Series 13 Preferred
for $1,200 per share, and (vi) after a period of twelve months from
the date of the issuance of the Series 13 Preferred, upon receipt
of notice of redemption, the holder of the Series 13 Preferred
being redeemed shall have five business days in which to exercise
an option to convert some or all of the shares of Series 13
Preferred being redeemed by the Company;
WHEREAS, the Series 10 Warrants shall not be affected by this
Agreement and shall remain issued and outstanding pursuant to the
terms, provisions and conditions of the Series 10 Warrants;
WHEREAS, the shares of Common Stock issuable upon conversion
of the Series 13 Preferred ("Conversion Shares") and the Series 13
Preferred are collectively referred to hereinafter as the
"Securities;"
WHEREAS, the Company and the Subscriber each desire that the
Exchange and the execution of the Agreement act to fully and
completely terminate the Subscriber's rights under the Series 10
Preferred, terminate the Series 10 Preferred and will act to fully
and completely release all obligations of the Company under the
Series 10 Preferred;
WHEREAS, the Common Stock is listed for trading on the Boston
Stock Exchange and the National Association of Securities Dealers
Automated Quotation SmallCap market ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has been subject to such filing requirements for the past
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") and the
Subscriber received all information as required under Rule 502 of
Regulation D.;
-2-
<PAGE>
WHEREAS, the Subscriber is not a "U. S. Person," as such term
is defined in Regulation S promulgated under the Securities Act;
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 exchange of securities by the
Company hereunder will be exempt from registration under applicable
federal (U. S.) securities laws since this is an exchange offer
pursuant to Section 3(a)(9) of the Securities Act, and it is a
private placement and intended to be a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act; and,
WHEREAS, the Securities 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. Exchange and Subscription for Purchase of Securities.
1.1 Issuance of Common Stock and Warrants. In full and
complete termination of the Series 10 Preferred and the
Subscriber's rights, and the interest in and to the
Series 10 Preferred, and in full and complete release of
any and all obligations of the Company under the Series
10 Preferred and to the Subscriber under the Series 10
Preferred, at the Closing (as defined herein) the
Subscriber shall deliver all of the issued and
outstanding shares of the Series 10 Preferred to the
Company in exchange for 2,252 shares of Series 13
Preferred, containing such terms, conditions and
provisions as set forth in the Series 13 Preferred
Certificate of Designations, pursuant to the terms and
conditions set forth in this Agreement. Dividends on the
Series 10 Preferred shall cease to accrue as of the close
of business on the day immediately preceding the date of
this Agreement, and dividends on the Series 13 Preferred
shall begin to accrue on the date of this Agreement.
1.1.1 Delivery. Upon receipt by the Company of the
canceled Series 10 Preferred duly assigned to
the Company, the Company shall deliver or
cause to be delivered: (a) to Conner &
Winters, A Professional Corporation ("Conner &
Winters"), a certificate or certificates
representing the 2,252 shares of Series 13
Preferred issued in the name of the
Subscriber, in such denominations as
Subscriber requests in writing, to be held in
escrow by Conner & Winters, for the
Subscriber; and (b) to the Subscriber, written
evidence from the Secretary of State of the
State of Delaware that the Series 13 Preferred
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.
-3-
<PAGE>
1.1.2 Cancellation of Series 10 Preferred. At the
Closing the Subscriber does hereby assign and
transfer unto the Company all of the Series 10
Preferred, the Series 10 Preferred shall be
terminated and rendered null and void in all
respects, and Conner & Winters is directed to
deliver to the Company the Series 10 Preferred
marked "Canceled."
1.1.3 Restrictive Legends. Subscriber agrees that
all certificates representing the Securities
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
Securities represented by such certificate
have not been registered under the Securities
Act, and (b) unless there is an effective
registration statement relating to the
Securities, the Securities may not be offered,
sold, transferred, mortgaged, pledged or
hypothecated without an exemption from
registration and an opinion of counsel to 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 Securities Act is
not required in connection with such sale or
transfer and the reasons therefor.
1.2 Discharge. As of the Closing, the Series 10 Preferred
shall be fully terminated in all respects. From and
after the Closing, the Subscriber releases, acquits and
forever discharges the Company, and all of its respective
subsidiaries, affiliates, agents, employees, officers,
and directors, as well as their respective heirs, suc-
cessors, legal and personal representatives, and assigns
of any and all of them, from and against any and all
claims, liabilities, losses, damages, cause or causes of
action of any kind or character whatsoever, whether
liquidated, unliquidated or disputed, asserted or
assertable, known or unknown, in contract or in tort, at
law or in equity, which the Subscriber might now or
hereafter have arising out of or in connection with or
relating to the Series 10 Preferred.
1.3 Exchange. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, at the Closing,
the Company agrees to exchange and deliver to the
Subscriber, and the Subscriber agrees to accept in such
exchange the delivery from the Company, of the Series 13
Preferred in exchange for the transfer of the Series 10
Preferred from the Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company
under the Exchange Act and has filed with the United
States Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The 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 Series 13 Preferred.
-4-
<PAGE>
1.5 Terms of the Series 13 Preferred. The Series 13
Preferred shall contain and be subject to the terms,
conditions, preferences and restrictions set forth in the
Series 13 Preferred Certificate of Designations attached
hereto as Exhibit "A."
1.6 No Effect on Series 10 Warrants. Nothing contained in
this Agreement shall have any effect on the Series 10
Warrants.
2. Closing.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on at the time and on the date that
the 2,252 shares of Series 13 Preferred are delivered by
the Company to Conner & Winters (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
3.1 Investment Intent. The Subscriber represents and
warrants that the shares of Series 13 Preferred are
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 Securities have not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the 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 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 13 Preferred involves a high
degree of risk in that (a) the Company has sustained
losses through December 31, 1998, 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 13
Preferred; (d) an investor may not be able to liquidate
his investment; (e) transferability of the Series 13
Preferred is extremely limited; (f) in the event of a
disposition an investor could sustain the loss of his
entire investment; (g) the Series 13 Preferred represent
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,
-5-
<PAGE>
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 and while the Subscriber is a
beneficiary of certain registration rights provided
herein, the Series 13 Preferred subscribed for and that
are purchased under this Agreement and the Conversion
Shares (i) are not registered under applicable federal
(U. S.) or state securities laws, and thus may not be
sold, conveyed, assigned or transferred unless registered
under such laws or unless an exemption from registration
is available under such laws, as more fully described
herein, and (ii) the Series 13 Preferred subscribed for
and that are to be purchased under this Agreement are not
quoted, 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 13 Preferred, 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 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 13 Preferred has not
been reviewed by the SEC because this private placement
is intended to be an exchange offer under Section 3(a)(9)
of the Securities Act and a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation
D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 13 Preferred 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 13 Preferred. The
Subscriber understands that although there is presently
-6-
<PAGE>
a public market for the Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. 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
understands and hereby acknowledges that the Company is
under no obligation to register the Series 13 Preferred
or the Conversion Shares under the Securities Act. 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 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 13 Preferred; (b) the Subscriber is able to bear
the economic risks inherent in an investment in the
Series 13 Preferred and that an important consideration
bearing on its ability to bear the economic risk of the
purchase of Series 13 Preferred is whether the
Subscriber can afford a complete loss of the Subscriber's
investment in the Series 13 Preferred and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (c) 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 13 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the
Company has made no representation regarding the
potential or actual tax consequences for the Subscriber
which will result from entering into the Agreement and
from consummation of the Exchange. The Subscriber
acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and
the Exchange.
3.9 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, and that such have been furnished to the
Subscriber a reasonable time prior to the date hereof:
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<PAGE>
(i) Annual Report on Form 10-K for the year ended
December 31, 1998 (the "Form 10-K"); (ii) Current Report
on Form 8-K, date of earliest event reported April 8,
1999; (iii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999; and (iv) the information contained
in any reports or documents required to be filed by the
Company under Sections 13(a), 14(a), 14(c) or 15(d) of
the Exchange Act since the distribution of the Form 10-K.
3.10 Documents, Information and Access. The Subscriber's
decision to purchase the Series 13 Preferred 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 documents
and information which Subscriber deems material to an
investment decision with respect to the purchase of
Series 13 Preferred hereunder.
3.11 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of securities pursuant to this Agreement has not
been reviewed or approved by the SEC or by any state
securities commission, authority or agency, and is not
registered under the Securities Laws. The Subscriber
acknowledges, understands and agrees that the shares of
Series 13 Preferred are being offered and exchanged
hereunder pursuant to (i) an exchange offer exemption
under Section 3(a)(9) of the Securities Act and (ii) (x)
a private placement exemption to the registration
provisions of the Securities Act pursuant to Section 4(2)
of such Securities Act and/or Regulation D promulgated
under the Securities Act) and (y) a similar exemption to
the registration provisions of applicable state
securities laws.
3.12 Transfer Restrictions. The Subscriber will not transfer
any Series 13 Preferred Securities purchased under this
Agreement or any Conversion Shares purchased under this
Agreement unless such are registered under the Securities
Laws, or unless an exemption is available under such
Securities Laws, and the Company may, if it chooses,
where an exemption from registration is claimed by such
Subscriber, condition any transfer of Series 13 Preferred
or Conversion Shares out of the Subscriber's name on
receipt of an opinion of the Company's counsel, to the
effect that the proposed transfer is being effected in
accordance with, and does not violate, an applicable
exemption from registration under the Securities Laws, or
an opinion of counsel to the 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.
3.13 No Short Sale. The Subscriber expressly agrees that
until such time that it has sold all of the Securities
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,
-8-
<PAGE>
<PAGE>
agreement, arrangement, scheme, or artifice of nature
whatsoever, engage in the short selling of the Company's
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.
3.14 No Commission. The Subscriber agrees and acknowledges
that no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
3.15 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 13
Preferred to the Subscriber.
3.16 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.
3.17 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.
3.18 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
-9-
<PAGE>
execution, delivery and Closing of this Agreement, the
sale, purchase, and conversion, if any, of the Series 13
Preferred, the sale of the Conversion Shares, the
exercise of the Series 10 Warrants, and the sale of the
Warrant Shares.
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
exchange the Series 10 Preferred for the Series 13 Preferred, 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
Securities, this Agreement shall have been duly and
validly executed and delivered by the Company and shall
constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms.
4.3 No Commission. The Company agrees and acknowledges that
no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
4.4 Ownership of, and Title to, Securities. The Series 13
Preferred to be exchanged for the Series 10 Preferred by
the Subscriber are, 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 exchange of the Series 13 Preferred (and upon the
conversion of the Series 13 Preferred, in whole or in
part) pursuant to this Agreement, the Subscriber will own
and acquire title to the Series 13 Preferred (and the
Conversion Shares, as the case may be) free and clear of
any and all proxies, voting trusts, pledges, options,
restrictions, or other legal or equitable encumbrance of
any nature whatsoever (other than the restrictions on
transfer due to Securities Laws or as otherwise provided
for in this Agreement or the Series 13 Preferred
Certificate of Designations).
4.5 Exemption from Registration. The offer and exchange of
securities with the Subscriber in accordance with the
terms and provisions of this Agreement is being affected
in accordance with the Securities Act, pursuant to an
exchange offer exemption to the registration provision of
the Securities Act pursuant to Section 3(a)(9) thereunder
and to a private placement exemption to the registration
-10-
<PAGE>
provisions of the Act pursuant to Section 4(2) of such
Act and/or Regulation D promulgated under the Securities
Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
5. Registration Rights. In order to induce the Subscriber to
enter into this Agreement and exchange the Series 10 Preferred for
the Series 13 Preferred, the Company hereby covenants and agrees to
grant to the Subscriber the registration rights with respect to the
Conversion Shares and the shares of Common Stock which may issue as
dividends on the Series 13 Preferred, as set forth in Section 10 of
the Subscription Agreement regarding the shares of Common Stock
issuable upon conversion of the Series 13 Preferred and as
dividends thereon. The registration rights as set forth in Section
10 of the Subscription Agreement regarding the shares of Common
Stock issuable upon exercise of the Series 10 Warrants are not
changed by this Agreement.
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
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 in
connection with the Conversion Shares, 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,
-11-
<PAGE>
liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material
fact contained in a Registration Statement filed with the
SEC in connection to the Conversion Shares, 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
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 13 Preferred:
-12-
<PAGE>
Series 13 Preferred 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
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 ARE ALSO SUBJECT TO THE
REGISTRATION RIGHTS SET FORTH IN THAT CERTAIN
SUBSCRIPTION AGREEMENT BY AND BETWEEN THE HOLDER HEREOF
AND THE COMPANY, DATED AS OF JUNE 30, 1998, A COPY OF
WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE
OFFICE.
Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS
COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
-13-
<PAGE>
<PAGE>
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THESE SHARES OF COMMON
STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET
FORTH IN THAT CERTAIN SUBSCRIPTION AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED AS OF
JUNE 30, 1998, A COPY OF WHICH IS ON FILE AT THE
COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Assignment and Power of Attorney. For purposes of
affecting the exchange of the Series 10 Preferred in
accordance with the terms of this Agreement at the
Closing, the Subscriber does hereby assign all of its
right, title and interest in and to the Series 10
Preferred to the Company and irrevocably makes,
constitutes and appoints the Company as the true and
lawful agents and attorneys-in-fact of the Subscriber
("Attorney-In-Fact") with full power and authority
(except as provided below) to act hereunder individually,
or through duly appointed successor attorneys-in-fact, in
its sole discretion, all as hereinafter provided, in the
name of, for and on behalf of the Subscriber, as fully as
could the Subscriber if present and acting in person,
with respect to all matters in connection with the
transfer of the Series 10 Preferred.
8.2 Amendment; Waiver. Neither this Agreement nor the
Warrants shall be changed, modified or amended in any
respect except by the mutual written agreement of the
parties hereto. Any provision of this Agreement or the
Warrants may be waived in writing by the party which is
entitled to the benefits thereof. No waiver of any
provision of this Agreement or the Series 10 Warrants
shall be deemed to, or shall constitute a waiver of, any
other provision hereof or thereof (whether or not
similar), nor shall nay such waiver constitute a
continuing waiver.
8.3 Binding Effect; Assignment. Neither this Agreement nor
the Series 10 Warrants, or any rights or obligations
hereunder or thereunder, are assignable by the
Subscriber.
8.4 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
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
-14-
<PAGE>
<PAGE>
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.
8.5 Severability. Any term or provisions of this Agreement
or the Series 10 Warrants 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 or thereof affecting the
validity or enforceability of such provision in any other
jurisdiction.
8.6 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or the Warrants or any term or provisions
hereof or thereof.
8.7 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
shall be deemed an original and all of which shall be
considered one and the same agreement, binding on all of
the parties hereto, 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.
8.8 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Shares to be sold.
8.9 Entire Agreement. This Agreement, along with the Series
10 Warrants and the Series 13 Preferred 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.
8.10 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.
-15-
<PAGE>
8.11 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
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 Herbert Strauss
Subscriber: RBB Bank Aktiengesellschaft
Burgring 16, 8010 Graz, Austria
Fax No.: 011-43-316-8072 ext. 392
8.12 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.
8.13 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
-16-
<PAGE>
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.
8.14 Conflicts with Subscription Agreement. In the event of
a conflict between the terms of the Subscription
Agreement and the terms of this Agreement, this Agreement
shall control in all respects.
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement on the 15th day of July,
1999.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
___________________________
Dr. Louis F. Centofanti
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/ Herbert Strauss
___________________________
Herbert Strauss
Headtrader
-17-
SEE RESTRICTIVE LEGEND ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF
DELAWARE
No. **** Shares ****
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
SERIES 11 CLASS K 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 11 Class K Convertible
Preferred Stock of
Perma-Fix Environmental Services, Inc.
transferable 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
________,1999.
_____________________________ ______________________________
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. 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.
*******************
CERTIFICATE
FOR
****
SHARES
of the
CAPITAL STOCK
of
Perma-Fix Environmental Services, Inc.
Series 11 Class K Convertible Preferred Stock
Par Value $.001 Per Share
ISSUED TO
**** S P E C I M E N ****
DATED
___________, 1999
********************
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 ________________________________________
SEE RESTRICTIVE LEGEND ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF
DELAWARE
No. **** Shares ****
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
SERIES 12 CLASS L 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 12 Class L Convertible
Preferred Stock of
Perma-Fix Environmental Services, Inc.
transferable 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
________,1999.
_____________________________ ______________________________
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. 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 ARE ALSO SUBJECT TO THE REGISTRATION
RIGHTS SET FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED AS OF FEBRUARY
28, 1998, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICE.
*******************
CERTIFICATE
FOR
****
SHARES
of the
CAPITAL STOCK
of
Perma-Fix Environmental Services, Inc.
Series 12 Class L Convertible Preferred Stock
Par Value $.001 Per Share
ISSUED TO
**** S P E C I M E N ****
DATED
___________, 1999
********************
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 ________________________________________
SEE RESTRICTIVE LEGEND ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF
DELAWARE
No. **** Shares ****
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
SERIES 13 CLASS M 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 13 Class M Convertible
Preferred Stock of
Perma-Fix Environmental Services, Inc.
transferable 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
________,1999.
_____________________________ ______________________________
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. 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 ARE ALSO SUBJECT TO THE REGISTRATION
RIGHTS SET FORTH IN THAT CERTAIN SUBSCRIPTION AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED AS OF JUNE 30,
1998, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICE.
*******************
CERTIFICATE
FOR
****
SHARES
of the
CAPITAL STOCK
of
Perma-Fix Environmental Services, Inc.
Series 13 Class M Convertible Preferred Stock
Par Value $.001 Per Share
ISSUED TO
**** S P E C I M E N ****
DATED
___________, 1999
********************
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 ________________________________________
EXCHANGE AGREEMENT
exchanging
1,769 SHARES OF SERIES 11 CLASS K CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
for
1,769 SHARES OF SERIES 14 CLASS N CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
<PAGE>
TABLE OF CONTENTS
Page
1. Exchange and Subscription for Purchase of Securities. . . .4
1.1 Issuance of Common Stock and Warrants. . . . . . . . .4
1.1.1 Delivery . . . . . . . . . . . . . . . . . .4
1.1.2 Cancellation of Series 11 Preferred. . . . .4
1.1.3 . . . . . . . . . . . . . . . . . . . . . .5
1.1.4 Restrictive Legends. . . . . . . . . . . . .5
1.2 Discharge. . . . . . . . . . . . . . . . . . . . . . .5
1.3 Exchange . . . . . . . . . . . . . . . . . . . . . . .5
1.4 Reporting Company. . . . . . . . . . . . . . . . . . .5
1.5 Terms of the Series 14 Preferred . . . . . . . . . . .6
1.6 No Effect on Series 3 Warrants.. . . . . . . . . . . .6
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . .6
3. Representations, Warranties and Covenants of Subscriber . .6
3.1 Investment Intent. . . . . . . . . . . . . . . . . . .6
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . .6
3.3 Prior Investment Experience. . . . . . . . . . . . . .7
3.4 No Review by the SEC . . . . . . . . . . . . . . . . .7
3.5 Not Registered . . . . . . . . . . . . . . . . . . . .7
3.6 No Public Market . . . . . . . . . . . . . . . . . . .7
3.7 Sophisticated Investor . . . . . . . . . . . . . . . .8
3.8 Tax Consequences . . . . . . . . . . . . . . . . . . .8
3.9 SEC Filing . . . . . . . . . . . . . . . . . . . . . .8
3.10 Documents, Information and Access. . . . . . . . . . .9
3.11 No Registration, Review or Approval. . . . . . . . . .9
3.12 Transfer Restrictions. . . . . . . . . . . . . . . . .9
3.13 No Short Sale. . . . . . . . . . . . . . . . . . . . .9
3.14 No Commission. . . . . . . . . . . . . . . . . . . . 10
3.15 Reliance . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Accuracy or Representations and Warranties . . . . . 10
3.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . 10
3.18 Survival . . . . . . . . . . . . . . . . . . . . . . 10
4. Representations, Warranties and Covenants of the Company. 11
4.1 Organization, Authority, Qualification . . . . . . . 11
4.2 Authorization. . . . . . . . . . . . . . . . . . . . 11
4.3 No Commission. . . . . . . . . . . . . . . . . . . . 11
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4.4 Ownership of, and Title to, Securities . . . . . . . 11
4.5 Exemption from Registration. . . . . . . . . . . . . 11
5. Registration Rights. . . . . . . . . . . . . . . . . . . 12
5.1 Registration. . . . . . . . . . . . . . . . . . . . 12
5.2 Current Registration Statement. . . . . . . . . . . 12
5.3 2.0% Penalty. . . . . . . . . . . . . . . . . . . . 13
5.4 Other Provisions. . . . . . . . . . . . . . . . . . 13
5.5 Costs. . . . . . . . . . . . . . . . . . . . . . . 14
5.6 Successors. . . . . . . . . . . . . . . . . . . . . 14
6. Indemnification.. . . . . . . . . . . . . . . . . . . . . 14
6.1 By the Company . . . . . . . . . . . . . . . . . . . 14
6.2 By the Subscriber. . . . . . . . . . . . . . . . . . 14
6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . 15
7. Securities Legends and Notices. . . . . . . . . . . . . . 16
8. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . 17
8.1 Assignment and Power of Attorney . . . . . . . . . . 17
8.2 Amendment; Waiver. . . . . . . . . . . . . . . . . . 17
8.3 Binding Effect; Assignment . . . . . . . . . . . . . 17
8.4 Governing Law; Litigation Costs. . . . . . . . . . . 17
8.5 Severability . . . . . . . . . . . . . . . . . . . . 18
8.6 Headings . . . . . . . . . . . . . . . . . . . . . . 18
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . 18
8.8 Transfer Taxes . . . . . . . . . . . . . . . . . . . 18
8.9 Entire Agreement . . . . . . . . . . . . . . . . . . 18
8.10 Authority; Enforceability. . . . . . . . . . . . . . 18
8.11 Notices. . . . . . . . . . . . . . . . . . . . . . . 18
8.12 No Third Party Beneficiaries . . . . . . . . . . . . 19
8.13 Public Announcements . . . . . . . . . . . . . . . . 19
7.14 Conflicts with Subscription Agreement. . . . . . . . 20
Exhibit "A" Certificate of Designations
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<PAGE>
THIS EXCHANGE AGREEMENT (the "Agreement") is entered on the
3rd day of August 1999, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, having offices at 1940
Northwest 67th Place, Gainesville, Florida 32653 (the "Company"),
and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of
Austria, and having its principal offices at Burgring 16, 8101
Graz, Austria (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber previously entered
into a certain Subscription and Purchase Agreement dated July 17,
1996 ("Subscription Agreement") under which (i) 5,500 shares of
"Series 3 Class C Convertible Preferred Stock," par value $.001 per
share (the "Series 3 Preferred"), and (ii) an aggregate of
2,000,000 common stock purchase warrants were issued to the
Subscriber in the form of one common stock purchase warrant dated
July 19, 1996, providing for the purchase of 1,000,000 shares of
the Company's common stock, par value $.001 per share (the "Common
Stock"), at an exercise price of $2.00 per share, and one common
stock warrant dated July 19, 1996, providing for the purchase of
1,000,000 shares of Common Stock at an exercise price of $3.50 per
share (collectively, the "Series 3 Warrants") (the Common Stock
issuable upon the exercise of the Series 6 Warrants is referred to
hereinafter as the "Warrant Shares");
WHEREAS, pursuant to the terms of the Series 3 Preferred, the
Subscriber has previously converted three thousand seven hundred
thirty-one (3,731) shares of Series 3 Preferred into Common Stock,
leaving 1,769 shares of Series 3 Preferred remaining issued and
outstanding as of the date of this Agreement;
WHEREAS, the Company and the Subscriber previously entered
into a certain Exchange Agreement dated as of the 15th day of July,
1999, ("First Exchange Agreement"), under which all of the Series
3 Preferred were delivered and tendered to the Company in exchange
(the "First Exchange") for an aggregate of 1,769 shares of "Series
11 Class K Convertible Preferred Stock" (the "Series 11
Preferred").
WHEREAS, Subscriber owns all of the issued and outstanding
shares of Series 11 Preferred as of the date of this Agreement;
WHEREAS, the Company and the Subscriber both desire to enter
into this Agreement, under which all of the issued and outstanding
shares of the Series 11 Preferred will be delivered and tendered to
the Company in exchange (the "Second Exchange") for an aggregate of
1,769 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 14 Class N Convertible Preferred Stock" (the
"Series 14 Preferred"), with the Series 14 Preferred containing
such terms, conditions, restrictions and provisions as set forth in
the Series 14 Preferred Certificate of Designations, attached
hereto as Exhibit "A," ("Series 14 Preferred Certificate of
Designations");
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<PAGE>
WHEREAS, the Subscription Agreement and First Exchange
Agreement is are be terminated in all respects;
WHEREAS, the terms, conditions, restrictions and provisions of
the Series 14 Preferred shall be the same as the terms, conditions,
restrictions and provisions of the Series 11 Preferred, except that
(i) the Series 11 Preferred shall not be convertible for a period
of twelve months from April 20, 1999, (ii) the Minimum Conversion
Price (as defined herein) shall be $1.50 for a period of twenty-
four months from April 20, 1999, (iii) for a period of twelve
months from April 20, 1999, the Company shall have the option of
redeeming the Series 11 Preferred for $1,100 per share, at any time
and from time to time, and if the Company does redeem the Series 11
Preferred during the first twelve months from April 20, 1999, the
holder of the Series 11 Preferred shall not have the right to
convert such redeemed shares, (iv) after twelve months from April
20, 1999, the Company shall have the option of redeeming the Series
11 Preferred for $1,200 per share, at any time and from time to
time, and (v) after twelve months from April 20, 1999, upon receipt
of notice of redemption, the holder of the Series 11 Preferred
being redeemed shall have five business days in which to exercise
an option to convert some or all of the shares of Series 11
Preferred being redeemed by the Company,
WHEREAS, the Series 3 Warrants shall not be affected by this
Agreement and shall remain issued and outstanding pursuant to the
terms, provisions and conditions of the Series 3 Warrants;
WHEREAS, the shares of Common Stock issuable upon conversion
of the Series 14 Preferred ("Conversion Shares") and the Series 14
Preferred are collectively referred to hereinafter as the
"Securities;"
WHEREAS, the Common Stock is listed for trading on the Boston
Stock Exchange and the National Association of Securities Dealers
Automated Quotation SmallCap market ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has been subject to such filing requirements for the past
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") and the
Subscriber received all information as required under Rule 502 of
Regulation D;
WHEREAS, the Subscriber is not a "U. S. Person," as such term
is defined in Regulation S promulgated under the Securities Act;
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 exchange of securities by the
Company hereunder will be exempt from registration under applicable
federal (U. S.) securities laws since this is an exchange offer
pursuant to Section 3(a)(9) of the Securities Act, and it is a
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<PAGE>
private placement and intended to be a nonpublic offering pursuant
to Sections 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act; and,
WHEREAS, the Securities 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. Exchange and Subscription for Purchase of Securities.
1.1 Issuance of Common Stock and Warrants. In full and
complete termination of the Series 11 Preferred and the
Subscriber's rights, and the interest in and to the
Series 11 Preferred, and in full and complete release of
any and all obligations of the Company under the Series
11 Preferred and to the Subscriber under the Series 11
Preferred, at the Closing (as defined herein) the
Subscriber shall deliver all of the issued and
outstanding shares of the Series 11 Preferred to the
Company in exchange for 1,769 shares of Series 14
Preferred, containing such terms, conditions and
provisions as set forth in the Series 14 Preferred
Certificate of Designations, pursuant to the terms and
conditions set forth in this Agreement. Dividends on the
Series 11 Preferred shall cease to accrue as of the close
of business on the day immediately preceding the date of
this Agreement, and dividends on the Series 14 Preferred
shall begin to accrue on the date of this Agreement.
1.1.1 Delivery. Upon receipt by the Company of the
canceled Series 11 Preferred duly assigned to
the Company, the Company shall deliver or
cause to be delivered: (a) to Conner &
Winters, A Professional Corporation ("Conner &
Winters"), a certificate or certificates
representing the 1,769 shares of Series 14
Preferred issued in the name of the
Subscriber, in such denominations as
Subscriber requests in writing, to be held in
escrow by Conner & Winters, for the
Subscriber; and (b) to the Subscriber, written
evidence from the Secretary of State of the
State of Delaware that the Series 14 Preferred
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.
1.1.2 Cancellation of Series 11 Preferred. At the
Closing, RBB Bank does hereby assign and
transfer unto the Company all of the Series 11
Preferred and the Series 11 Preferred shall be
terminated and rendered null and void in all
respects, and Conner & Winters is directed to
deliver to the Company the Series 11 Preferred
marked "Canceled."
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<PAGE>
1.1.3 Termination of Previous Agreements. The
Subscription Agreement and the First Exchange
Agreement are hereby terminated in their
entirety.
1.1.4 Restrictive Legends. Subscriber agrees that
all certificates representing the Securities
shall bear the restrictive legend
substantially in the form set forth in Section
6 below which shall include, but not be
limited to, a legend to the effect that (a)the
Securities represented by such certificate
have not been registered under the Securities
Act, and (b) unless there is an effective
registration statement relating to the
Securities, the Securities may not be offered,
sold, transferred, mortgaged, pledged or
hypothecated without an exemption from
registration and an opinion of counsel to 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 Securities Act is
not required in connection with such sale or
transfer and the reasons therefor.
1.2 Discharge. As of the Closing, the Series 11 Preferred
shall be fully terminated in all respects. From and
after the Closing, the Subscriber releases, acquits and
forever discharges the Company, and all of its respective
subsidiaries, affiliates, agents, employees, officers,
and directors, as well as their respective heirs, suc-
cessors, legal and personal representatives, and assigns
of any and all of them, from and against any and all
claims, liabilities, losses, damages, cause or causes of
action of any kind or character whatsoever, whether
liquidated, unliquidated or disputed, asserted or
assertable, known or unknown, in contract or in tort, at
law or in equity, which the Subscriber might now or
hereafter have arising out of or in connection with or
relating to the Series 11 Preferred.
1.3 Exchange. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, at the Closing,
the Company agrees to exchange and deliver to the
Subscriber, and the Subscriber agrees to accept in such
exchange the delivery from the Company, of the Series 14
Preferred in exchange for the transfer of the Series 11
Preferred from the Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company
under the Exchange Act and has filed with the United
States Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The 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 Series 14 Preferred.
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<PAGE>
1.5 Terms of the Series 14 Preferred. The Series 14
Preferred shall contain and be subject to the terms,
conditions, preferences and restrictions set forth in the
Series 14 Preferred Certificate of Designations attached
hereto as Exhibit "A."
1.6 No Effect on Series 3 Warrants. Nothing contained in
this Agreement shall have any effect on the Series 3
Warrants.
2. Closing.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on at the time and on the date that
the 1,769 shares of Series 14 Preferred are delivered by
the Company to Conner & Winters (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
3.1 Investment Intent. The Subscriber represents and
warrants that the shares of Series 14 Preferred are
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 Securities have not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the 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 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 14 Preferred involves a high
degree of risk in that (a) the Company has sustained
losses through March 31, 1999, 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 14
Preferred; (d) an investor may not be able to liquidate
his investment; (e) transferability of the Series 14
Preferred is extremely limited; (f) in the event of a
disposition an investor could sustain the loss of his
entire investment; (g) the Series 14 Preferred represent
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
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<PAGE>
<PAGE>
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 and while the Subscriber is a
beneficiary of certain registration rights provided
herein, the Series 14 Preferred subscribed for and that
are purchased under this Agreement and the Conversion
Shares (i) are not registered under applicable federal
(U. S.) or state securities laws, and thus may not be
sold, conveyed, assigned or transferred unless registered
under such laws or unless an exemption from registration
is available under such laws, as more fully described
herein, and (ii) the Series 14 Preferred subscribed for
and that are to be purchased under this Agreement are not
quoted, 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 14 Preferred, 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 14 Preferred has not
been reviewed by the SEC because this private placement
is intended to be an exchange offer under Section 3(a)(9)
of the Securities Act and a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation
D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 14 Preferred 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 14 Preferred. The
Subscriber understands that although there is presently
a public market for the Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated
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<PAGE>
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
understands and hereby acknowledges that the Company is
under no obligation to register the Series 14 Preferred
or the Conversion Shares under the Securities Act. 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 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 14 Preferred; (b) the Subscriber is able to bear
the economic risks inherent in an investment in the
Series 14 Preferred and that an important consideration
bearing on its ability to bear the economic risk of the
purchase of Series 14 Preferred is whether the
Subscriber can afford a complete loss of the Subscriber's
investment in the Series 14 Preferred and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (c) 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 14 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the
Company has made no representation regarding the
potential or actual tax consequences for the Subscriber
which will result from entering into the Agreement and
from consummation of the Exchange. The Subscriber
acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and
the Exchange.
3.9 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, and that such have been furnished to the
Subscriber a reasonable time prior to the date hereof:
(i) Annual Report on Form 10-K for the year ended
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December 31, 1998 (the "Form 10-K"); (ii) Current Report
on Form 8-K, date of earliest event reported April 8,
1999; (iii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999; (iv) Current Report on Form 8-K,
date of earliest event reported June 1, 1999; and (v) the
information contained in any reports or documents
required to be filed by the Company under Sections 13(a),
14(a), 14(c) or 15(d) of the Exchange Act since the
distribution of the Form 10-K.
3.10 Documents, Information and Access. The Subscriber's
decision to purchase the Series 14 Preferred 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 documents
and information which Subscriber deems material to an
investment decision with respect to the purchase of
Series 14 Preferred hereunder.
3.11 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of securities pursuant to this Agreement has not
been reviewed or approved by the SEC or by any state
securities commission, authority or agency, and is not
registered under the Securities Laws. The Subscriber
acknowledges, understands and agrees that the shares of
Series 14 Preferred are being offered and exchanged
hereunder pursuant to (i) an exchange offer exemption
under Section 3(a)(9) of the Securities Act and (ii) (x)
a private placement exemption to the registration
provisions of the Securities Act pursuant to Section 4(2)
of such Securities Act and/or Regulation D promulgated
under the Securities Act) and (y) a similar exemption to
the registration provisions of applicable state
securities laws.
3.12 Transfer Restrictions. The Subscriber will not transfer
any Series 14 Preferred Securities purchased under this
Agreement or any Conversion Shares purchased under this
Agreement unless such are registered under the Securities
Laws, or unless an exemption is available under such
Securities Laws, and the Company may, if it chooses,
where an exemption from registration is claimed by such
Subscriber, condition any transfer of Series 14 Preferred
or Conversion Shares out of the Subscriber's name on
receipt of an opinion of the Company's counsel, to the
effect that the proposed transfer is being effected in
accordance with, and does not violate, an applicable
exemption from registration under the Securities Laws, or
an opinion of counsel to the 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.
3.13 No Short Sale. The Subscriber expressly agrees that
until such time that it has sold all of the Securities
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
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<PAGE>
<PAGE>
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
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.
3.14 No Commission. The Subscriber agrees and acknowledges
that no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
3.15 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 14
Preferred to the Subscriber.
3.16 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.
3.17 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.
3.18 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
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execution, delivery and Closing of this Agreement, the
sale, purchase, and conversion, if any, of the Series 14
Preferred, the sale of the Conversion Shares, the
exercise of the Series 3 Warrants, and the sale of the
Warrant Shares.
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
exchange the Series 11 Preferred for the Series 14 Preferred, 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
Securities, this Agreement shall have been duly and
validly executed and delivered by the Company and shall
constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms.
4.3 No Commission. The Company agrees and acknowledges that
no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
4.4 Ownership of, and Title to, Securities. The Series 14
Preferred to be exchanged for the Series 11 Preferred by
the Subscriber are, 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 exchange of the Series 14 Preferred (and upon the
conversion of the Series 14 Preferred, in whole or in
part) pursuant to this Agreement, the Subscriber will own
and acquire title to the Series 14 Preferred (and the
Conversion Shares, as the case may be) free and clear of
any and all proxies, voting trusts, pledges, options,
restrictions, or other legal or equitable encumbrance of
any nature whatsoever (other than the restrictions on
transfer due to Securities Laws or as otherwise provided
for in this Agreement or the Series 14 Preferred
Certificate of Designations).
4.5 Exemption from Registration. The offer and exchange of
securities with the Subscriber in accordance with the
terms and provisions of this Agreement is being affected
in accordance with the Securities Act, pursuant to an
exchange offer exemption to the registration provision of
the Securities Act pursuant to Section 3(a)(9) thereunder
and to a private placement exemption to the registration
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<PAGE>
provisions of the Act pursuant to Section 4(2) of such
Act and/or Regulation D promulgated under the Securities
Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
5. Registration Rights. In order to induce the Subscriber to
enter into this Agreement and purchase the Securities, 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
Warrant Shares and the Conversion Shares.
5.1 Registration. The Company has previously prepared and
filed with the SEC, a registration statement on Form S-3
(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 3,700,000 shares of Common Stock issuable upon
conversion of the Series 3 Preferred, plus up to 330,000
shares of Common Stock, if any, issuable as payment of
dividends on the Series 3 Preferred, pursuant to the
terms of the Series 3 Preferred, and 2,000,000 shares of
Common Stock issuable upon exercise of the Series 3
Warrants. The Company shall use its reasonable efforts
to maintain the effectiveness of such Registration
Statement for a three year period or until the Conversion
Shares have been sold by the Subscriber, whichever is
sooner. In connection with the offering of such Common
Stock registered pursuant to this Section 5, the Company
shall take such actions as shall be reasonably necessary
to qualify the Common 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 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 any of the Series 3
Preferred, Series 11 Preferred or Series 14 Preferred
itself, but only with respect to the underlying
Conversion Shares issuable upon exercise of the Series 3
Preferred, Series 11 Preferred or Series 14 Preferred, as
applicable, and the Warrant Shares issuable upon the
exercise of the Series 3 Warrants.
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 three (3) years or until
the shares of Common Stock covered by such Registration
Statement are sold by the Subscriber, whichever is
sooner. The Subscriber shall promptly provide all such
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<PAGE>
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 2.0% Penalty. In the event the Registration Statement
referred to in Section 5.1 above is not effective on
January 31, 2000 (or the next business day thereafter if
such day is a Saturday, Sunday or legal holiday), the
Company agrees to pay to the Subscriber a penalty in an
amount equal to two percent (2%) of the product of (a)
the number of shares of Series 14 Preferred then
outstanding times (b) $1,000, payable in cash. The
Company agrees that for each month thereafter which
terminates without the Registration Statement being
declared effective by the SEC before 5:00 p.m. Eastern
Daylight Savings Time on the last day thereof (or the
next business day thereafter if such day is a Saturday,
Sunday or legal holiday), the Company shall pay to the
Subscriber a penalty in an amount equal to two percent
(2%) of the product of (a) the number of shares of Series
14 Preferred then outstanding times (b) $1,000, payable
in cash.
5.4 Other Provisions. In connection with the offering of any
Conversion Shares and/or Warrant 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
and/or Warrant Shares to be offered and sold. In
connection with any offering of Conversion Shares and/or
Warrant Shares registered pursuant to this Section 5.3,
the Company shall (a) furnish to the underwriters (if
any), at the Company's expense, unlegended certificates
representing ownership of the Conversion Shares and/or
Warrant Shares sold under such Registration Statement in
such denominations as requested and (b) instruct any
transfer agent and registrar of the Conversion Shares
and/or Warrant Shares to release immediately any stop
transfer order, and to remove any restrictive legend,
with respect to Conversion Shares and/or Warrant Shares
included in any registration becoming effective pursuant
to this Agreement upon the sale of such shares by the
Subscriber.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK
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<PAGE>
5.5 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 and the Warrant 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 and/or
Warrant Shares pursuant hereto and all fees of its legal
counsel and other advisors retained in connection with
reviewing any registration statement.
5.6 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
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 in
connection with the Conversion Shares, 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
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<PAGE>
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 a Registration Statement filed with the
SEC in connection to the Conversion Shares, 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
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.
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<PAGE>
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 14 Preferred:
Series 14 Preferred 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
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, THESE SHARES OF COMMON
STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET
FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND BETWEEN
THE HOLDER HEREOF AND THE COMPANY, DATED AS OF AUGUST 3,
1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS
COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
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<PAGE>
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THESE SHARES OF COMMON
STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET
FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND BETWEEN
THE HOLDER HEREOF AND THE COMPANY, DATED AS OF AUGUST 3,
1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Assignment and Power of Attorney. For purposes of
affecting the exchange of the Series 11 Preferred in
accordance with the terms of this Agreement, at the
Closing the Subscriber does hereby assign all of its
right, title and interest in and to the Series 11
Preferred to the Company and irrevocably makes,
constitutes and appoints the Company as the true and
lawful agents and attorneys-in-fact of the Subscriber
("Attorney-In-Fact") with full power and authority
(except as provided below) to act hereunder individually,
or through duly appointed successor attorneys-in-fact, in
its sole discretion, all as hereinafter provided, in the
name of, for and on behalf of the Subscriber, as fully as
could the Subscriber if present and acting in person,
with respect to all matters in connection with the
transfer of the Series 11 Preferred.
8.2 Amendment; Waiver. Neither this Agreement nor the
Warrants shall be changed, modified or amended in any
respect except by the mutual written agreement of the
parties hereto. Any provision of this Agreement or the
Warrants may be waived in writing by the party which is
entitled to the benefits thereof. No waiver of any
provision of this Agreement or the Series 3 Warrants
shall be deemed to, or shall constitute a waiver of, any
other provision hereof or thereof (whether or not
similar), nor shall nay such waiver constitute a
continuing waiver.
8.3 Binding Effect; Assignment. Neither this Agreement nor
the Series 3 Warrants, or any rights or obligations
hereunder or thereunder, are assignable by the
Subscriber.
8.4 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
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
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<PAGE>
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.
8.5 Severability. Any term or provisions of this Agreement
or the Series 3 Warrants 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 or thereof affecting the
validity or enforceability of such provision in any other
jurisdiction.
8.6 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or the Warrants or any term or provisions
hereof or thereof.
8.7 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
shall be deemed an original and all of which shall be
considered one and the same agreement, binding on all of
the parties hereto, 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.
8.8 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Shares to be sold.
8.9 Entire Agreement. This Agreement, along with the Series
3 Warrants and the Series 14 Preferred 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.
8.10 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.
8.11 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
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<PAGE>
requested, postage prepaid, or by U. S. Express Mail
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
7.11:
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 Herbert Strauss
Subscriber: RBB Bank Aktiengesellschaft
Burgring 16, 8010 Graz, Austria
Fax No.: 011-43-316-8072 ext. 392
8.12 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.
8.13 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>
<PAGE>
8.14 Conflicts with Subscription Agreement. In the event of
a conflict between the terms of the Subscription
Agreement and the terms of this Agreement, this Agreement
shall control in all respects.
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement on the 3rd day of August
1999.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
__________________________
Dr. Louis F. Centofanti
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/ Herbert Strauss
___________________________
Herbert Strauss
Headtrader
EXCHANGE AGREEMENT
exchanging
616 SHARES OF SERIES 12 CLASS L CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
for
616 SHARES OF SERIES 15 CLASS O CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
<PAGE>
TABLE OF CONTENTS
Page
1. Exchange and Subscription for Purchase of Securities. . . .4
1.1 Issuance of Common Stock and Warrants. . . . . . . . .4
1.1.1 Delivery . . . . . . . . . . . . . . . . . .5
1.1.2 Cancellation of Series 12 Preferred. . . . .5
1.1.4 Restrictive Legends. . . . . . . . . . . . .5
1.2 Discharge. . . . . . . . . . . . . . . . . . . . . . .6
1.3 Exchange . . . . . . . . . . . . . . . . . . . . . . .6
1.4 Reporting Company. . . . . . . . . . . . . . . . . . .6
1.5 Terms of the Series 15 Preferred . . . . . . . . . . .6
1.6 No Effect on Series 6 Warrants.. . . . . . . . . . . .6
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . .6
3. Representations, Warranties and Covenants of Subscriber . .6
3.1 Investment Intent. . . . . . . . . . . . . . . . . . .6
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . .7
3.3 Prior Investment Experience. . . . . . . . . . . . . .8
3.4 No Review by the SEC . . . . . . . . . . . . . . . . .8
3.5 Not Registered . . . . . . . . . . . . . . . . . . . .8
3.6 No Public Market . . . . . . . . . . . . . . . . . . .8
3.7 Sophisticated Investor . . . . . . . . . . . . . . . .9
3.8 Tax Consequences . . . . . . . . . . . . . . . . . . .9
3.9 SEC Filing . . . . . . . . . . . . . . . . . . . . . .9
3.10 Documents, Information and Access. . . . . . . . . . .9
3.11 No Registration, Review or Approval. . . . . . . . . .9
3.12 Transfer Restrictions. . . . . . . . . . . . . . . . 10
3.13 No Short Sale. . . . . . . . . . . . . . . . . . . . 10
3.14 No Commission. . . . . . . . . . . . . . . . . . . . 10
3.15 Reliance . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Accuracy or Representations and Warranties . . . . . 11
3.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . 11
3.18 Survival . . . . . . . . . . . . . . . . . . . . . . 11
4. Representations, Warranties and Covenants of the Company. 11
4.1 Organization, Authority, Qualification . . . . . . . 11
4.2 Authorization. . . . . . . . . . . . . . . . . . . . 11
4.3 No Commission. . . . . . . . . . . . . . . . . . . . 12
4.4 Ownership of, and Title to, Securities . . . . . . . 12
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<PAGE>
4.5 Exemption from Registration. . . . . . . . . . . . . 12
5. Registration Rights. . . . . . . . . . . . . . . . . . . 12
5.1 Registration . . . . . . . . . . . . . . . . . . . . 12
5.2 Current Registration Statement . . . . . . . . . . . 13
5.3 2.0% Penalty.. . . . . . . . . . . . . . . . . . . . 13
5.4 Other Provisions . . . . . . . . . . . . . . . . . . 14
5.5 Costs. . . . . . . . . . . . . . . . . . . . . . . . 14
5.6 Successors . . . . . . . . . . . . . . . . . . . . . 14
6. Indemnification.. . . . . . . . . . . . . . . . . . . . . 14
6.1 By the Company . . . . . . . . . . . . . . . . . . . 15
6.2 By the Subscriber. . . . . . . . . . . . . . . . . . 15
6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . 15
7. Securities Legends and Notices. . . . . . . . . . . . . . 16
8. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . 17
8.1 Assignment and Power of Attorney . . . . . . . . . . 17
8.2 Amendment; Waiver. . . . . . . . . . . . . . . . . . 18
8.3 Binding Effect; Assignment . . . . . . . . . . . . . 18
8.4 Governing Law; Litigation Costs. . . . . . . . . . . 18
8.5 Severability . . . . . . . . . . . . . . . . . . . . 18
8.6 Headings . . . . . . . . . . . . . . . . . . . . . . 18
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . 19
8.8 Transfer Taxes . . . . . . . . . . . . . . . . . . . 19
8.9 Entire Agreement . . . . . . . . . . . . . . . . . . 19
8.10 Authority; Enforceability. . . . . . . . . . . . . . 19
8.11 Notices. . . . . . . . . . . . . . . . . . . . . . . 19
8.12 No Third Party Beneficiaries . . . . . . . . . . . . 20
8.13 Public Announcements . . . . . . . . . . . . . . . . 20
8.14 Conflicts with First Exchange Agreement. . . . . . . 20
Exhibit "A" Certificate of Designations
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<PAGE>
THIS EXCHANGE AGREEMENT (the "Agreement") is entered into on
the 3rd day of August 1999, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, having offices at 1940
Northwest 67th Place, Gainesville, Florida 32653 (the "Company"),
and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of
Austria, and having its principal offices at Burgring 16, 8101
Graz, Austria (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber previously entered
into a certain Subscription and Purchase Agreement dated as of the
9th day of June, 1997 ("Subscription Agreement") under which (i)
2,500 shares of "Series 4 Class D Convertible Preferred Stock," par
value $.001 per share (the "Series 4 Preferred"), and (ii) an
aggregate of 375,000 common stock purchase warrants were issued to
the Subscriber in the form of one common stock purchase warrant
dated June 9, 1997, providing for the purchase of 187,500 shares of
the Company's common stock, par value $.001 per share (the "Common
Stock"), at an exercise price of $2.10 per share, and one common
stock warrant dated June 9, 1997, providing for the purchase of
187,500 shares of Common Stock at an exercise price of $2.50 per
share (collectively, the "June 1997 Warrants");
WHEREAS, the Company and the Subscriber previously entered
into a certain Exchange Agreement dated as of the 6th day of
November, 1997, but effective as of the 16th day of September, 1997
("First Exchange Agreement"), under which the Subscription
Agreement was terminated in all respects and all of the Series 4
Preferred and the June 1997 Warrants were delivered and tendered to
the Company in exchange (the "First Exchange") for (i) an aggregate
of 2,500 shares of "Series 6 Class F Convertible Preferred Stock,"
par value $.001 per share (the "Series 6 Preferred") and (ii) an
aggregate of 656,250 common stock purchase warrants (the "Series 6
Warrants"), each providing for the purchase of one share of the
Company's Common Stock, 375,000 of which are exercisable at $1.8125
per share and 281,250 of which are exercisable at $2.125 per share
(the Common Stock issuable upon the exercise of the Series 6
Warrants is referred to hereinafter as the "Warrant Shares");
WHEREAS, the Company and the Subscriber previously entered
into a certain Exchange Agreement dated as of the 30th day of
April, 1998, but effective as of the 28th day of February, 1998
("Second Exchange Agreement"), under which all of the Series 6
Preferred were delivered and tendered to the Company in exchange
(the "Second Exchange") for an aggregate of 2,500 shares of "Series
8 Class H Convertible Preferred Stock," par value $.001 per share
(the "Series 8 Preferred");
WHEREAS, pursuant to the terms of the Series 8 Preferred, the
Subscriber has previously converted one thousand five hundred
eighty-four (1,584) shares of Series 8 Preferred into Common Stock,
leaving nine hundred sixteen (916) shares of Series 8 Preferred
issued and outstanding;
WHEREAS, the Company and the Subscriber previously entered
into a certain Exchange Agreement dated as of the 15th day of July,
1999 ("Third Exchange Agreement"), under which all of the Series 8
Preferred were delivered and tendered to the Company in exchange
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<PAGE>
(the "Third Exchange") for an aggregate of nine hundred sixteen
(916) shares of "Series 12 Class L Convertible Preferred Stock,"
par value $.001 per share (the "Series 12 Preferred");
WHEREAS, pursuant to the terms of the Series 12 Preferred, the
Company redeemed three hundred (300) shares of the Series 12
Preferred, leaving six hundred sixteen (616) shares of Series 12
Preferred issued and outstanding;
WHEREAS, Subscriber owns all of the issued and outstanding
shares of Series 12 Preferred as of the date of this Agreement;
WHEREAS, the Company and the Subscriber both desire to enter
into this Agreement, under which all of the issued and outstanding
shares of the Series 12 Preferred will be delivered and tendered to
the Company in exchange (the "Fourth Exchange") for an aggregate of
616 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 15 Class O Convertible Preferred Stock" (the
"Series 15 Preferred"), with the Series 15 Preferred containing
such terms, conditions, restrictions and provisions as set forth in
the Series 15 Preferred Certificate of Designations, attached
hereto as Exhibit "A," ("Series 15 Preferred Certificate of
Designations");
WHEREAS, upon execution of this Agreement, the Subscription
Agreement, First Exchange Agreement, Second Exchange Agreement and
Third Exchange Agreement are to be terminated in all respects;
WHEREAS, the terms, conditions, restrictions and provisions of
the Series 15 Preferred shall be the same as the terms, conditions,
restrictions and provisions of the Series 12 Preferred, except that
(i) the Series 15 Preferred shall not be convertible for a period
of twelve months from April 20, 1999, (ii) the Minimum Conversion
Price (as defined herein) shall be $1.50 for a period of
twenty-four months from April 20, 1999, (iii) for a period of
twelve months from April 20, 1999, the Company shall, have the
option of redeeming the Series 15 Preferred for $1,100 per share,
at any time and from time to time, and if the Company does redeem
the Series 15 Preferred during the first twelve months from April
20, 1999, the holder of the Series 15 Preferred so redeemed shall
not have the right to convert such redeemed shares, (iv) after a
period of twelve months from April 20, 1999, the Company shall, at
any time and from time to time, have the option of redeeming the
outstanding shares of Series 15 Preferred for $1,200 per share, and
(v) after a period of twelve months from April 20, 1999, upon
receipt of notice of redemption, the holder of the Series 15
Preferred being redeemed shall have five business days in which to
exercise an option to convert some or all of the shares of Series
15 Preferred being redeemed by the Company;
WHEREAS, the Company and the Subscriber each desire that the
Fourth Exchange and the execution of the Agreement act to fully and
completely terminate the Subscriber's rights under the Series 12
Preferred, terminate the Series 12 Preferred, and will act to fully
and completely release all obligations of the Company under the
Series 12 Preferred;
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<PAGE>
WHEREAS, the Series 6 Warrants shall not be affected by this
Agreement and shall remain issued and outstanding pursuant to the
terms, provisions and conditions of the Series 6 Warrants;
WHEREAS, the shares of Common Stock issuable upon conversion
of the Series 15 Preferred ("Conversion Shares") and the Series 15
Preferred are collectively referred to hereinafter as the
"Securities;"
WHEREAS, the Common Stock is listed for trading on the Boston
Stock Exchange and the National Association of Securities Dealers
Automated Quotation SmallCap market ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has been subject to such filing requirements for the past
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") and the
Subscriber received all information as required under Rule 502 of
Regulation D;
WHEREAS, the Subscriber is not a "U. S. Person," as such term
is defined in Regulation S promulgated under the Securities Act;
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 exchange of securities by the
Company hereunder will be exempt from registration under applicable
federal (U. S.) securities laws since this is an exchange offer
pursuant to Section 3(a)(9) of the Securities Act, and it is a
private placement and intended to be a nonpublic offering pursuant
to Sections 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act; and,
WHEREAS, the Securities 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. Exchange and Subscription for Purchase of Securities.
1.1 Issuance of Common Stock and Warrants. In full and
complete termination of the Series 12 Preferred and the
Subscriber's rights, and the interest in and to the
Series 12 Preferred, and in full and complete release of
any and all obligations of the Company under the Series
12 Preferred and to the Subscriber under the Series 12
Preferred, at the Closing (as defined herein) the
Subscriber shall deliver all of the issued and
outstanding shares of the Series 12 Preferred to the
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<PAGE>
Company in exchange for 616 shares of Series 15
Preferred, containing such terms, conditions and
provisions as set forth in the Series 15 Preferred
Certificate of Designations, pursuant to the terms and
conditions set forth in this Agreement. Dividends on the
Series 12 Preferred shall cease to accrue as of the close
of business on the day immediately preceding the date of
this Agreement and dividends on the Series 15 Preferred
shall begin to accrue on the date of this Agreement.
1.1.1 Delivery. Upon receipt by the Company of the
canceled Series 12 Preferred duly assigned to
the Company, the Company shall deliver or
cause to be delivered: (a) to Conner &
Winters, A Professional Corporation ("Conner &
Winters"), a certificate or certificates
representing the 616 shares of Series 15
Preferred issued in the name of the
Subscriber, in such denominations as
Subscriber requests in writing, to be held in
escrow by Conner & Winters, for the
Subscriber; and (b) to the Subscriber, written
evidence from the Secretary of State of the
State of Delaware that the Series 15 Preferred
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.
1.1.2 Cancellation of Series 12 Preferred. At the
Closing, the Subscriber does hereby assign and
transfer unto the Company all of the Series 12
Preferred and the Series 12 Preferred shall be
terminated and rendered null and void in all
respects, and Conner & Winters is directed to
deliver to the Company the Series 12 Preferred
marked "Canceled."
1.1.3 Termination of Previous Agreements. Each of
the Subscription Agreement, First Exchange
Agreement, Second Agreement and Third Exchange
Agreement is hereby terminated in its
entirety.
1.1.4 Restrictive Legends. Subscriber agrees that,
subject to the provisions of Section 5 below,
all certificates representing the Securities
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
Securities represented by such certificate
have not been registered under the Securities
Act, and (b) unless there is an effective
registration statement relating to the
Securities, the Securities may not be offered,
sold, transferred, mortgaged, pledged or
hypothecated without an exemption from
registration and an opinion of counsel to 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 Securities 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.
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<PAGE>
1.2 Discharge. As of the Closing, the Series 12 Preferred
shall be fully terminated in all respects. From and
after the Closing, the Subscriber releases, acquits and
forever discharges the Company, and all of its respective
subsidiaries, affiliates, agents, employees, officers,
and directors, as well as their respective heirs, suc-
cessors, legal and personal representatives, and assigns
of any and all of them, from and against any and all
claims, liabilities, losses, damages, cause or causes of
action of any kind or character whatsoever, whether
liquidated, unliquidated or disputed, asserted or
assertable, known or unknown, in contract or in tort, at
law or in equity, which the Subscriber might now or
hereafter have arising out of or in connection with or
relating to the Series 12 Preferred.
1.3 Exchange. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, at the Closing,
the Company agrees to exchange and deliver to the
Subscriber, and the Subscriber agrees to accept in such
exchange the delivery from the Company, of the Series 15
Preferred in exchange for the transfer of the Series 12
Preferred from the Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company
under the Exchange Act and has filed with the United
States Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The 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 Series 15 Preferred.
1.5 Terms of the Series 15 Preferred. The Series 15
Preferred shall contain and be subject to the terms,
conditions, preferences and restrictions set forth in the
Series 15 Preferred Certificate of Designations attached
hereto as Exhibit "A."
1.6 No Effect on Series 6 Warrants. Nothing contained in
this Agreement shall have any effect on the Series 6
Warrants.
2. Closing.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on at the time and on the date that
the 616 shares of Series 15 Preferred are delivered by
the Company to Conner & Winters (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
3.1 Investment Intent. The Subscriber represents and
warrants that the shares of Series 15 Preferred are
being, and any underlying Conversion Shares will be,
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<PAGE>
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 Securities have not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the 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 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 15 Preferred involves a high
degree of risk in that (a) the Company has sustained
losses through March 31, 1999, 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 15
Preferred; (d) an investor may not be able to liquidate
his investment; (e) transferability of the Series 15
Preferred is extremely limited; (f) in the event of a
disposition an investor could sustain the loss of his
entire investment; (g) the Series 15 Preferred represent
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 and while the Subscriber is a
beneficiary of certain registration rights provided
herein, the Series 15 Preferred subscribed for and that
are purchased under this Agreement and the Conversion
Shares (y) are not registered under applicable federal
(U. S.) or state securities laws, and thus may not be
sold, conveyed, assigned or transferred unless registered
under such laws or unless an exemption from registration
is available under such laws, as more fully described
herein, and (z) the Series 15 Preferred subscribed for
and that are to be purchased under this Agreement are not
quoted, 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 15 Preferred, 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 or
on any other organized market or quotation system.
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<PAGE>
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 15 Preferred has not
been reviewed by the SEC because this private placement
is intended to be an exchange offer under Section 3(a)(9)
of the Securities Act and a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation
D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 15 Preferred 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 15 Preferred. The
Subscriber understands that although there is presently
a public market for the Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. 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
understands and hereby acknowledges that the Company is
under no obligation to register the Series 15 Preferred
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").
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<PAGE>
3.7 Sophisticated Investor. That (a) 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 15 Preferred; (b) the Subscriber is able to bear
the economic risks inherent in an investment in the
Series 15 Preferred and that an important consideration
bearing on its ability to bear the economic risk of the
purchase of Series 15 Preferred is whether the
Subscriber can afford a complete loss of the Subscriber's
investment in the Series 15 Preferred and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (c) 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 15 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the
Company has made no representation regarding the
potential or actual tax consequences for the Subscriber
which will result from entering into the Agreement and
from consummation of the Second Exchange. The Subscriber
acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and
the Second Exchange.
3.9 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, and that such have been furnished to the
Subscriber a reasonable time prior to the date hereof:
(i) Annual Report on Form 10-K for the year ended
December 31, 1998 (the "Form 10-K"); (ii) Current Report
on Form 8-K, date of earliest event reported April 8,
1999; (iii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999; (iv) Current Report on Form 8-K,
date of earliest event reported June 1, 1999; and (v) the
information contained in any reports or documents
required to be filed by the Company under Sections 13(a),
14(a), 14(c) or 15(d) of the Exchange Act since the
distribution of the Form 10-K.
3.10 Documents, Information and Access. The Subscriber's
decision to purchase the Series 15 Preferred 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 documents
and information which Subscriber deems material to an
investment decision with respect to the purchase of
Series 15 Preferred hereunder.
3.11 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of securities pursuant to this Agreement has not
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<PAGE>
<PAGE>
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 shares of
Series 15 Preferred are being offered and exchanged
hereunder pursuant to (i) an exchange offer exemption
under Section 3(a)(9) of the Securities Act and (ii) (y)
a private placement exemption to the registration
provisions of the Securities Act pursuant to Section 4(2)
of such Securities Act and/or Regulation D promulgated
under the Securities Act) and (z) a similar exemption to
the registration provisions of applicable state
securities laws.
3.12 Transfer Restrictions. The Subscriber will not transfer
any Series 15 Preferred Securities purchased under this
Agreement or any Conversion Shares purchased under this
Agreement unless such are registered under the Securities
Laws, or unless an exemption is available under such
Securities Laws, and the Company may, if it chooses,
where an exemption from registration is claimed by such
Subscriber, condition any transfer of Series 15 Preferred
or Conversion Shares out of the Subscriber's name on
receipt of an opinion of the Company's counsel, to the
effect that the proposed transfer is being effected in
accordance with, and does not violate, an applicable
exemption from registration under the Securities Laws, or
an opinion of counsel to the 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.
3.13 No Short Sale. The Subscriber expressly agrees that
until such time that it has sold all of the Securities
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
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.
3.14 No Commission. The Subscriber agrees and acknowledges
that no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Third
Exchange.
3.15 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 15
Preferred to the Subscriber.
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<PAGE>
3.16 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.
3.17 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.
3.18 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, purchase, and conversion, if any, of the Series 15
Preferred, the sale of the Conversion Shares, the
exercise of the Series 6 Warrants, and the sale of the
Warrant Shares.
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
exchange the Series 12 Preferred for the Series 15 Preferred, 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
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Securities, this Agreement shall have been duly and
validly executed and delivered by the Company and shall
constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms.
4.3 No Commission. The Company agrees and acknowledges that
no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Third
Exchange.
4.4 Ownership of, and Title to, Securities. The Series 15
Preferred to be exchanged for the Series 12 Preferred by
the Subscriber are, 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 exchange of the Series 15 Preferred (and upon the
conversion of the Series 15 Preferred, in whole or in
part) pursuant to this Agreement, the Subscriber will own
and acquire title to the Series 15 Preferred (and the
Conversion Shares, as the case may be) free and clear of
any and all proxies, voting trusts, pledges, options,
restrictions, or other legal or equitable encumbrance of
any nature whatsoever (other than the restrictions on
transfer due to Securities Laws or as otherwise provided
for in this Agreement or the Series 15 Preferred
Certificate of Designations).
4.5 Exemption from Registration. The offer and exchange of
securities with the Subscriber in accordance with the
terms and provisions of this Agreement is being affected
in accordance with the Securities Act, pursuant to an
exchange offer exemption to the registration provision of
the Securities Act pursuant to Section 3(a)(9) thereunder
and to a private placement exemption to the registration
provisions of the Act pursuant to Section 4(2) of such
Act and/or Regulation D promulgated under the Securities
Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
5. Registration Rights. In order to induce the Subscriber to
enter into this Agreement and purchase the Securities, 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
Warrant Shares and the Conversion Shares.
5.1 Registration. Subject to the terms of Section 5 hereof,
the Company agrees that 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 1,379,311 shares of Common Stock
issuable upon conversion of the Series 6 Preferred,
Series 8 Preferred, Series 12 Preferred or Series 15
Preferred, plus up to 250,000 shares of Common Stock, if
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<PAGE>
any, issuable as payment of dividends on the Series 6
Preferred, Series 8 Preferred, Series 12 Preferred or
Series 15 Preferred pursuant to the terms of the
applicable series of preferred stock, and 656,250 shares
of Common Stock issuable upon exercise of the Series 6
Warrants. The Company shall use its reasonable efforts
to cause such Registration Statement to become effective
on or before January 31, 2000. In connection with the
offering of such Common Stock registered pursuant to this
Section 5, the Company shall take such actions as shall
be reasonably necessary to qualify the Common 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 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 any of the Series 6 Preferred, Series 8
Preferred, Series 12 Preferred or Series 15 Preferred
itself, but only with respect to the underlying
Conversion Shares issuable upon exercise of the Series 6
Preferred, Series 8 Preferred, Series 12 Preferred or
Series 15 Preferred, as applicable, and the Warrant
Shares issuable upon the exercise of the Series 6
Warrants.
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 three (3) years or until
the shares of Common Stock covered by such Registration
Statement are sold by the Subscriber, whichever is
sooner. The 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 2.0% Penalty. In the event the Registration Statement
referred to in Section 5.1 above is not declared
effective by the SEC before 5:00 p.m. Eastern Daylight
Savings Time on January 31, 2000 (or the next business
day thereafter if such day is a Saturday, Sunday or legal
holiday), the Company agrees to pay to the Subscriber a
penalty in an amount equal to two percent (2%) of the
product of (a) the number of shares of Series 15
Preferred then outstanding times (b) $1,000, payable in
cash. The Company agrees that for each month thereafter
which terminates without the Registration Statement being
declared effective by the SEC before 5:00 p.m. Eastern
Daylight Savings Time on the last day thereof (or the
next business day thereafter if such day is a Saturday,
Sunday or legal holiday), the Company shall pay to the
Subscriber a penalty in an amount equal to two percent
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<PAGE>
(2%) of the product of (a) the number of shares of Series
15 Preferred then outstanding times (b) $1,000, payable
in cash.
5.4 Other Provisions. In connection with the offering of any
Conversion Shares and/or Warrant 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
and/or Warrant Shares to be offered and sold. In
connection with any offering of Conversion Shares and/or
Warrant Shares registered pursuant to this Section 5.5,
the Company shall (a) furnish to the underwriters (if
any), at the Company's expense, unlegended certificates
representing ownership of the Conversion Shares and/or
Warrant Shares sold under such Registration Statement in
such denominations as requested and (b) instruct any
transfer agent and registrar of the Conversion Shares
and/or Warrant Shares to release immediately any stop
transfer order, and to remove any restrictive legend,
with respect to Conversion Shares and/or Warrant Shares
included in any registration becoming effective pursuant
to this Agreement upon the sale of such shares by the
Subscriber.
5.5 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 and the Warrant 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 and/or
Warrant Shares pursuant hereto and all fees of its legal
counsel and other advisors retained in connection with
reviewing any registration statement.
5.6 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.
6.0.1 By the Company. Subject to the terms of this
Section 6, the Company will indemnify and hold
harmless the Subscriber, its directors and
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<PAGE>
officers, and any underwriter (as defined in
the Securities Act) for the 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.
6.1 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.
6.2 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 15 Preferred:
Series 15 Preferred 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
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
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<PAGE>
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 EXCHANGE
AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND THE
COMPANY, DATED AS OF AUGUST 3, 1999, A COPY OF WHICH IS
ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS
COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THESE SHARES OF COMMON
STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET
FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND BETWEEN
THE HOLDER HEREOF AND THE COMPANY, DATED AS OF AUGUST 3,
1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Assignment and Power of Attorney. For purposes of
affecting the exchange of the Series 12 Preferred in
accordance with the terms of this Agreement, at the
Closing the Subscriber does hereby assign all of its
right, title and interest in and to the Series 12
Preferred to the Company and irrevocably makes,
constitutes and appoints the Company as the true and
lawful agents and attorneys-in-fact of the Subscriber
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<PAGE>
<PAGE>
("Attorney-In-Fact") with full power and authority
(except as provided below) to act hereunder individually,
or through duly appointed successor attorneys-in-fact, in
its sole discretion, all as hereinafter provided, in the
name of, for and on behalf of the Subscriber, as fully as
could the Subscriber if present and acting in person,
with respect to all matters in connection with the
transfer of the Series 12 Preferred Stock.
8.2 Amendment; Waiver. Neither this Agreement nor the
Warrants shall be changed, modified or amended in any
respect except by the mutual written agreement of the
parties hereto. Any provision of this Agreement or the
Warrants may be waived in writing by the party which is
entitled to the benefits thereof. No waiver of any
provision of this Agreement or the Series 6 Warrants
shall be deemed to, or shall constitute a waiver of, any
other provision hereof or thereof (whether or not
similar), nor shall nay such waiver constitute a
continuing waiver.
8.3 Binding Effect; Assignment. Neither this Agreement nor
the Series 6 Warrants, or any rights or obligations
hereunder or thereunder, are assignable by the
Subscriber.
8.4 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
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.
8.5 Severability. Any term or provisions of this Agreement
or the Series 6 Warrants 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 or thereof affecting the
validity or enforceability of such provision in any other
jurisdiction.
8.6 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or the Warrants or any term or provisions
hereof or thereof.
8.7 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
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<PAGE>
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.
8.8 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Shares to be sold.
8.9 Entire Agreement. This Agreement, along with the Series
6 Warrants and the Series 15 Preferred 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.
8.10 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.
8.11 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
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
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<PAGE>
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 Herbert Strauss
Subscriber: RBB Bank Aktiengesellschaft
Burgring 16, 8010 Graz, Austria
Fax No.: 011-43-316-8072 ext. 392
8.12 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.
8.13 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.
8.14 Conflicts with First Exchange Agreement. In the event of
a conflict between the terms of the First Exchange
Agreement and the terms of this Agreement, this Agreement
shall control in all respects.
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<PAGE>
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement on the 3rd day of August
1999.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
__________________________
Dr. Louis F. Centofanti
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/ Herbert Strauss
___________________________
Herbert Strauss
Headtrader
EXCHANGE AGREEMENT
exchanging
1,802 SHARES OF SERIES 13 CLASS M CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
for
1,802 SHARES OF SERIES 16 CLASS P CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
<PAGE>
TABLE OF CONTENTS
Page
1. Exchange and Subscription for Purchase of Securities. . . .3
1.1 Issuance of Common Stock and Warrants. . . . . . . . .3
1.1.1 Delivery . . . . . . . . . . . . . . . . . .3
1.1.2 Cancellation of Series 13 Preferred. . . . .4
1.1.4 Restrictive Legends. . . . . . . . . . . . .4
1.2 Discharge. . . . . . . . . . . . . . . . . . . . . . .4
1.3 Exchange . . . . . . . . . . . . . . . . . . . . . . .4
1.4 Reporting Company. . . . . . . . . . . . . . . . . . .4
1.5 Terms of the Series 16 Preferred . . . . . . . . . . .5
1.6 No Effect on Series 10 Warrants. . . . . . . . . . . .5
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . .5
3. Representations, Warranties and Covenants of Subscriber . .5
3.1 Investment Intent. . . . . . . . . . . . . . . . . . .5
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . .5
3.3 Prior Investment Experience. . . . . . . . . . . . . .6
3.4 No Review by the SEC . . . . . . . . . . . . . . . . .6
3.5 Not Registered . . . . . . . . . . . . . . . . . . . .6
3.6 No Public Market . . . . . . . . . . . . . . . . . . .7
3.7 Sophisticated Investor . . . . . . . . . . . . . . . .7
3.8 Tax Consequences . . . . . . . . . . . . . . . . . . 7
3.9 SEC Filing . . . . . . . . . . . . . . . . . . . . . .8
3.10 Documents, Information and Access. . . . . . . . . . 8
3.11 No Registration, Review or Approval. . . . . . . . . .8
3.12 Transfer Restrictions. . . . . . . . . . . . . . . . 8
3.13 No Short Sale. . . . . . . . . . . . . . . . . . . . .9
3.14 No Commission. . . . . . . . . . . . . . . . . . . . 9
3.15 Reliance . . . . . . . . . . . . . . . . . . . . . . .9
3.16 Accuracy or Representations and Warranties . . . . . 9
3.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . .9
3.18 Survival . . . . . . . . . . . . . . . . . . . . . . 10
4. Representations, Warranties and Covenants of the Company. 10
4.1 Organization, Authority, Qualification . . . . . . . 10
4.2 Authorization. . . . . . . . . . . . . . . . . . . . 10
4.3 No Commission. . . . . . . . . . . . . . . . . . . . 10
4.4 Ownership of, and Title to, Securities . . . . . . . 10
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4.5 Exemption from Registration. . . . . . . . . . . . . 10
4.6 Registration Rights . . . . . . . . . . . . . . . . .11
5. Registration. . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Current Registration Statement . . . . . . . . . . . 11
5.2 2.0% Penalty.. . . . . . . . . . . . . . . . . . . . 12
5.3 Other Provisions . . . . . . . . . . . . . . . . . . 12
5.4 Costs. . . . . . . . . . . . . . . . . . . . . . . . 12
5.5 Successors . . . . . . . . . . . . . . . . . . . . . 13
6. Indemnification.. . . . . . . . . . . . . . . . . . . . . 13
6.1 By the Company . . . . . . . . . . . . . . . . . . . 13
6.2 By the Subscriber. . . . . . . . . . . . . . . . . . 13
6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . 14
7. Securities Legends and Notices. . . . . . . . . . . . . . 14
8. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . 16
8.1 Assignment and Power of Attorney . . . . . . . . . . 16
8.2 Amendment; Waiver. . . . . . . . . . . . . . . . . . 16
8.3 Binding Effect; Assignment . . . . . . . . . . . . . 16
8.4 Governing Law; Litigation Costs. . . . . . . . . . . 16
8.5 Severability . . . . . . . . . . . . . . . . . . . . 17
8.6 Headings . . . . . . . . . . . . . . . . . . . . . . 17
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . 17
8.8 Transfer Taxes . . . . . . . . . . . . . . . . . . . 17
8.9 Entire Agreement . . . . . . . . . . . . . . . . . . 17
8.10 Authority; Enforceability. . . . . . . . . . . . . . 17
8.11 Notices. . . . . . . . . . . . . . . . . . . . . . . 18
8.12 No Third Party Beneficiaries . . . . . . . . . . . . 18
8.13 Public Announcements . . . . . . . . . . . . . . . . 18
8.14 Conflicts with Subscription Agreement. . . . . . . . 19
Exhibit "A" Certificate of Designations
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THIS EXCHANGE AGREEMENT (the "Agreement") is entered into on
the 3rd day of August 1999, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, having offices at 1940
Northwest 67th Place, Gainesville, Florida 32653 (the "Company"),
and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of
Austria, and having its principal offices at Burgring 16, 8101
Graz, Austria (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber previously entered
into a certain Private Securities Subscription Agreement dated June
30, 1998 ("Subscription Agreement") under which (i) 3,000 shares of
"Series 10 Class Convertible Preferred Stock," par value $.001 per
share (the "Series 10 Preferred"), and (ii) an aggregate of 350,000
common stock purchase warrants were issued to the Subscriber in the
form of one common stock purchase warrant dated June 30, 1998,
providing for the purchase of 200,000 shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), at an
exercise price of $1.875 per share, and one common stock warrant
dated June 30, 1998, providing for the purchase of 150,000 shares
of Common Stock at an exercise price of $2.50 per share
(collectively, the "Series 10 Warrants")(the Common Stock issuable
upon the exercise of the Series 10 Warrants is referred to
hereinafter as the "Warrant Shares");
WHEREAS, pursuant to the terms of the Series 10 Preferred, the
Subscriber has previously converted seven hundred forty-eight (748)
shares of Series 10 Preferred into Common Stock leaving two
thousand two hundred fifty-two (2,252) shares remaining issued and
outstanding;
WHEREAS, the Company and the Subscriber previously entered
into a certain Exchange Agreement dated as of the 15th day of July,
1999 ("First Exchange Agreement"), under which all of the Series 10
Preferred were delivered and tendered to the Company in exchange
(the "First Exchange") for an aggregate of two thousand two hundred
fifty-two (2,252) shares of "Series 13 Class M Convertible
Preferred Stock" (the "Series 13 Preferred");
WHEREAS, pursuant to the terms of the Series 13 Preferred, the
Company redeemed four hundred fifty (450) shares of the Series 13
Preferred, leaving one thousand eight hundred two (1,802) shares of
Series 13 Preferred issued and outstanding;
WHEREAS, the Subscriber owns all of the issued and outstanding
shares of Series 13 Preferred as of the date of this Agreement;
WHEREAS, the Company and the Subscriber both desire to enter
into this Agreement, under which all of the issued and outstanding
shares of the Series 13 Preferred will be delivered and tendered to
the Company in exchange (the "Second Exchange") for an aggregate of
one thousand eight hundred two (1,802) 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 16 Class
P Convertible Preferred Stock" (the "Series 16 Preferred"), with
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<PAGE>
the Series 16 Preferred containing such terms, conditions,
restrictions and provisions as set forth in the Series 16 Preferred
Certificate of Designations, attached hereto as Exhibit "A,"
("Series 16 Preferred Certificate of Designations");
WHEREAS, upon execution of this Agreement, the Subscription
Agreement and the First Exchange Agreement are each to be
terminated in all respects;
WHEREAS, the terms, conditions, restrictions and provisions of
the Series 16 Preferred shall be the same as the terms, conditions,
restrictions and provisions of the Series 13 Preferred, except that
(i) the Series 16 Preferred shall not be convertible for a period
of twelve months from April 20, 1999, (ii) the Minimum Conversion
Price (as defined herein) shall be $1.50 for a period of
twenty-four months from April 20, 1999, (iii) for a period of
twelve months from April 20, 1999, the Company shall have the
option of redeeming the Series 16 Preferred for $1,100 per share,
at any time and from time to time, and if the Company does redeem
the Series 16 Preferred during the first twelve months from April
20, 1999, the holder of the Series 16 Preferred so redeemed shall
not have the right to convert such redeemed shares, (iv) after a
period of twelve months from April 20, 1999, the Company shall, at
any time and from time to time, have the option of redeeming the
Series 16 Preferred for $1,200 per share, and (v) after a period of
twelve months from April 20, 1999, upon receipt of notice of
redemption, the holder of the Series 16 Preferred being redeemed
shall have five business days in which to exercise an option to
convert some or all of the shares of Series 16 Preferred being
redeemed by the Company;
WHEREAS, the Series 10 Warrants shall not be affected by this
Agreement and shall remain issued and outstanding pursuant to the
terms, provisions and conditions of the Series 10 Warrants;
WHEREAS, the shares of Common Stock issuable upon conversion
of the Series 16 Preferred ("Conversion Shares") and the Series 16
Preferred are collectively referred to hereinafter as the
"Securities;"
WHEREAS, the Company and the Subscriber each desire that the
Exchange and the execution of the Agreement act to fully and
completely terminate the Subscriber's rights under the Series 13
Preferred, terminate the Series 13 Preferred and will act to fully
and completely release all obligations of the Company under the
Series 13 Preferred;
WHEREAS, the Common Stock is listed for trading on the Boston
Stock Exchange and the National Association of Securities Dealers
Automated Quotation SmallCap market ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has been subject to such filing requirements for the past
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") and the
Subscriber received all information as required under Rule 502 of
Regulation D.;
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<PAGE>
WHEREAS, the Subscriber is not a "U. S. Person," as such term
is defined in Regulation S promulgated under the Securities Act;
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 exchange of securities by the
Company hereunder will be exempt from registration under applicable
federal (U. S.) securities laws since this is an exchange offer
pursuant to Section 3(a)(9) of the Securities Act, and it is a
private placement and intended to be a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act; and,
WHEREAS, the Securities 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. Exchange and Subscription for Purchase of Securities.
1.1 Issuance of Common Stock and Warrants. In full and
complete termination of the Series 13 Preferred and the
Subscriber's rights, and the interest in and to the
Series 13 Preferred, and in full and complete release of
any and all obligations of the Company under the Series
13 Preferred and to the Subscriber under the Series 13
Preferred, at the Closing (as defined herein) the
Subscriber shall deliver all of the issued and
outstanding shares of the Series 13 Preferred to the
Company in exchange for 1,802 shares of Series 16
Preferred, containing such terms, conditions and
provisions as set forth in the Series 16 Preferred
Certificate of Designations, pursuant to the terms and
conditions set forth in this Agreement. Dividends on the
Series 13 Preferred shall cease to accrue as of the close
of business on the day immediately preceding the date of
this Agreement, and dividends on the Series 16 Preferred
shall begin to accrue on the date of this Agreement.
1.1.1 Delivery. Upon receipt by the Company of the
canceled Series 13 Preferred duly assigned to
the Company, the Company shall deliver or
cause to be delivered: (a) to Conner &
Winters, A Professional Corporation ("Conner &
Winters"), a certificate or certificates
representing the 1,802 shares of Series 16
Preferred issued in the name of the
Subscriber, in such denominations as
Subscriber requests in writing, to be held in
escrow by Conner & Winters, for the
Subscriber; and (b) to the Subscriber, written
evidence from the Secretary of State of the
State of Delaware that the Series 16 Preferred
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.
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<PAGE>
1.1.2 Cancellation of Series 13 Preferred. At the
Closing the Subscriber does hereby assign and
transfer unto the Company all of the Series 13
Preferred, the Series 13 Preferred shall be
terminated and rendered null and void in all
respects, and Conner & Winters is directed to
deliver to the Company the Series 13 Preferred
marked "Canceled."
1.1.3 Termination of Previous Agreements. Each of
the Subscription Agreement and the First
Exchange Agreement is hereby terminated in its
entirety.
1.1.4 Restrictive Legends. Subscriber agrees that
all certificates representing the Securities
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
Securities represented by such certificate
have not been registered under the Securities
Act, and (b) unless there is an effective
registration statement relating to the
Securities, the Securities may not be offered,
sold, transferred, mortgaged, pledged or
hypothecated without an exemption from
registration and an opinion of counsel to 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 Securities Act is
not required in connection with such sale or
transfer and the reasons therefor.
1.2 Discharge. As of the Closing, the Series 13 Preferred
shall be fully terminated in all respects. From and
after the Closing, the Subscriber releases, acquits and
forever discharges the Company, and all of its respective
subsidiaries, affiliates, agents, employees, officers,
and directors, as well as their respective heirs, suc-
cessors, legal and personal representatives, and assigns
of any and all of them, from and against any and all
claims, liabilities, losses, damages, cause or causes of
action of any kind or character whatsoever, whether
liquidated, unliquidated or disputed, asserted or
assertable, known or unknown, in contract or in tort, at
law or in equity, which the Subscriber might now or
hereafter have arising out of or in connection with or
relating to the Series 13 Preferred.
1.3 Exchange. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, at the Closing,
the Company agrees to exchange and deliver to the
Subscriber, and the Subscriber agrees to accept in such
exchange the delivery from the Company, of the Series 16
Preferred in exchange for the transfer of the Series 13
Preferred from the Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company
under the Exchange Act and has filed with the United
States Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
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<PAGE>
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 Series 16 Preferred.
1.5 Terms of the Series 16 Preferred. The Series 16
Preferred shall contain and be subject to the terms,
conditions, preferences and restrictions set forth in the
Series 16 Preferred Certificate of Designations attached
hereto as Exhibit "A."
1.6 No Effect on Series 10 Warrants. Nothing contained in
this Agreement shall have any effect on the Series 10
Warrants.
2. Closing.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on at the time and on the date that
the 1,802 shares of Series 16 Preferred are delivered by
the Company to Conner & Winters (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
3.1 Investment Intent. The Subscriber represents and
warrants that the shares of Series 16 Preferred are
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 Securities have not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the 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 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 16 Preferred involves a high
degree of risk in that (a) the Company has sustained
losses through December 31, 1998, 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 16
Preferred; (d) an investor may not be able to liquidate
his investment; (e) transferability of the Series 16
Preferred is extremely limited; (f) in the event of a
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<PAGE>
disposition an investor could sustain the loss of his
entire investment; (g) the Series 16 Preferred represent
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 and while the Subscriber is a
beneficiary of certain registration rights provided
herein, the Series 16 Preferred subscribed for and that
are purchased under this Agreement and the Conversion
Shares (y) are not registered under applicable federal
(U. S.) or state securities laws, and thus may not be
sold, conveyed, assigned or transferred unless registered
under such laws or unless an exemption from registration
is available under such laws, as more fully described
herein, and (z) the Series 16 Preferred subscribed for
and that are to be purchased under this Agreement are not
quoted, 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 16 Preferred, 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 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 16 Preferred has not
been reviewed by the SEC because this private placement
is intended to be an exchange offer under Section 3(a)(9)
of the Securities Act and a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation
D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 16 Preferred 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,
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<PAGE>
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 16 Preferred. The
Subscriber understands that although there is presently
a public market for the Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. 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
understands and hereby acknowledges that the Company is
under no obligation to register the Series 16 Preferred
or the Conversion Shares under the Securities Act. 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 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 16 Preferred; (b) the Subscriber is able to bear
the economic risks inherent in an investment in the
Series 16 Preferred and that an important consideration
bearing on its ability to bear the economic risk of the
purchase of Series 16 Preferred is whether the
Subscriber can afford a complete loss of the Subscriber's
investment in the Series 16 Preferred and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (c) 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 16 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the
Company has made no representation regarding the
potential or actual tax consequences for the Subscriber
which will result from entering into the Agreement and
from consummation of the Exchange. The Subscriber
acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and
the Exchange.
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<PAGE>
3.9 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, and that such have been furnished to the
Subscriber a reasonable time prior to the date hereof:
(i) Annual Report on Form 10-K for the year ended
December 31, 1998 (the "Form 10-K"); (ii) Current Report
on Form 8-K, date of earliest event reported April 8,
1999; (iii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999; (iv) Current Report on Form 8-K,
date of earliest event reported June 1, 1999; and (v) the
information contained in any reports or documents
required to be filed by the Company under Sections 13(a),
14(a), 14(c) or 15(d) of the Exchange Act since the
distribution of the Form 10-K.
3.10 Documents, Information and Access. The Subscriber's
decision to purchase the Series 16 Preferred 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 documents
and information which Subscriber deems material to an
investment decision with respect to the purchase of
Series 16 Preferred hereunder.
3.11 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of securities pursuant to this Agreement has not
been reviewed or approved by the SEC or by any state
securities commission, authority or agency, and is not
registered under the Securities Laws. The Subscriber
acknowledges, understands and agrees that the shares of
Series 16 Preferred are being offered and exchanged
hereunder pursuant to (i) an exchange offer exemption
under Section 3(a)(9) of the Securities Act and (ii) (y)
a private placement exemption to the registration
provisions of the Securities Act pursuant to Section 4(2)
of such Securities Act and/or Regulation D promulgated
under the Securities Act) and (z) a similar exemption to
the registration provisions of applicable state
securities laws.
3.12 Transfer Restrictions. The Subscriber will not transfer
any Series 16 Preferred Securities purchased under this
Agreement or any Conversion Shares purchased under this
Agreement unless such are registered under the Securities
Laws, or unless an exemption is available under such
Securities Laws, and the Company may, if it chooses,
where an exemption from registration is claimed by such
Subscriber, condition any transfer of Series 16 Preferred
or Conversion Shares out of the Subscriber's name on
receipt of an opinion of the Company's counsel, to the
effect that the proposed transfer is being effected in
accordance with, and does not violate, an applicable
exemption from registration under the Securities Laws, or
an opinion of counsel to the 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.
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<PAGE>
3.13 No Short Sale. The Subscriber expressly agrees that
until such time that it has sold all of the Securities
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
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.
3.14 No Commission. The Subscriber agrees and acknowledges
that no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
3.15 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 16
Preferred to the Subscriber.
3.16 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.
3.17 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.
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<PAGE>
3.18 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, purchase, and conversion, if any, of the Series 16
Preferred, the sale of the Conversion Shares, the
exercise of the Series 10 Warrants, and the sale of the
Warrant Shares.
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
exchange the Series 13 Preferred for the Series 16 Preferred, 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
Securities, this Agreement shall have been duly and
validly executed and delivered by the Company and shall
constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms.
4.3 No Commission. The Company agrees and acknowledges that
no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
4.4 Ownership of, and Title to, Securities. The Series 16
Preferred to be exchanged for the Series 13 Preferred by
the Subscriber are, 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 exchange of the Series 16 Preferred (and upon the
conversion of the Series 16 Preferred, in whole or in
part) pursuant to this Agreement, the Subscriber will own
and acquire title to the Series 16 Preferred (and the
Conversion Shares, as the case may be) free and clear of
any and all proxies, voting trusts, pledges, options,
restrictions, or other legal or equitable encumbrance of
any nature whatsoever (other than the restrictions on
transfer due to Securities Laws or as otherwise provided
for in this Agreement or the Series 16 Preferred
Certificate of Designations).
4.5 Exemption from Registration. The offer and exchange of
securities with the Subscriber in accordance with the
terms and provisions of this Agreement is being affected
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<PAGE>
in accordance with the Securities Act, pursuant to an
exchange offer exemption to the registration provision of
the Securities Act pursuant to Section 3(a)(9) thereunder
and to a private placement exemption to the registration
provisions of the Act pursuant to Section 4(2) of such
Act and/or Regulation D promulgated under the Securities
Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
4.6 Registration Rights. In order to induce the Subscriber
to enter into this Agreement and purchase the Securities, 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 Warrant Shares and the Conversion Shares.
5. Registration. Subject to the terms of Section 5 hereof, the
Company agrees that 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 2,200,000 shares of Common Stock
issuable upon conversion of the Series 10 Preferred, Series 13
Preferred or Series 16 Preferred, plus up to 350,000 shares of
Common Stock, if any, issuable as payment of dividends on the
Series 10 Preferred, Series 13 Preferred or Series 16
Preferred pursuant to the terms of the applicable series of
preferred stock, and 350,000 shares of Common Stock issuable
upon exercise of the Series 10 Warrants. The Company shall
use its reasonable efforts to cause such Registration
Statement to become effective on or before January 31, 2000.
In connection with the offering of such Common Stock
registered pursuant to this Section 5, the Company shall take
such actions as shall be reasonably necessary to qualify the
Common 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 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 any of the Series 10 Preferred, Series 13
Preferred or Series 16 Preferred itself, but only with respect
to the underlying Conversion Shares issuable upon exercise of
the Series 10 Preferred, Series 13 Preferred or Series 16
Preferred, as applicable, and the Warrant Shares issuable upon
the exercise of the Series 10 Warrants.
5.1 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 three (3) years or until
the shares of Common Stock covered by such Registration
Statement are sold by the Subscriber, whichever is
-11-
<PAGE>
sooner. The 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.
5.2 2.0% Penalty. In the event the Registration Statement
referred to in Section 5.1 above is not declared
effective by the SEC before 5:00 p.m. Eastern Daylight
Savings Time on January 31, 2000 (or the next business
day thereafter if such day is a Saturday, Sunday or legal
holiday), the Company agrees to pay to the Subscriber a
penalty in an amount equal to two percent (2%) of the
product of (a) the number of shares of Series 16
Preferred then outstanding times (b) $1,000, payable in
cash. The Company agrees that for each month thereafter
which terminates without the Registration Statement being
declared effective by the SEC before 5:00 p.m. Eastern
Daylight Savings Time on the last day thereof (or the
next business day thereafter if such day is a Saturday,
Sunday or legal holiday), the Company shall pay to the
Subscriber a penalty in an amount equal to two percent
(2%) of the product of (a) the number of shares of Series
16 Preferred then outstanding times (b) $1,000, payable
in cash.
5.3 Other Provisions. In connection with the offering of any
Conversion Shares and/or Warrant 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
and/or Warrant Shares to be offered and sold. In
connection with any offering of Conversion Shares and/or
Warrant Shares registered pursuant to this Section 5.3,
the Company shall (a) furnish to the underwriters (if
any), at the Company's expense, unlegended certificates
representing ownership of the Conversion Shares and/or
Warrant Shares sold under such Registration Statement in
such denominations as requested and (b) instruct any
transfer agent and registrar of the Conversion Shares
and/or Warrant Shares to release immediately any stop
transfer order, and to remove any restrictive legend,
with respect to Conversion Shares and/or Warrant 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
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK
-12-
<PAGE>
associated with the Registration Statement relating to
the Conversion Shares and the Warrant 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 and/or
Warrant Shares pursuant hereto and all fees of its legal
counsel and other advisors retained in connection with
reviewing any 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
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 in
connection with the Conversion Shares, 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
-13-
<PAGE>
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 a Registration Statement filed with the
SEC in connection to the Conversion Shares, 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
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
-14-
<PAGE>
and substance set forth below, shall be placed on all of the
certificates representing the Series 16 Preferred:
Series 16 Preferred 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
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 ARE ALSO SUBJECT TO THE
REGISTRATION RIGHTS SET FORTH IN THAT CERTAIN EXCHANGE
AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND THE
COMPANY, DATED AS OF AUGUST 3, 1999, A COPY OF WHICH IS
ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS
COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
-15-
<PAGE>
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, THESE SHARES OF COMMON
STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET
FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND BETWEEN
THE HOLDER HEREOF AND THE COMPANY, DATED AS OF AUGUST 3,
1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Assignment and Power of Attorney. For purposes of
affecting the exchange of the Series 13 Preferred in
accordance with the terms of this Agreement at the
Closing, the Subscriber does hereby assign all of its
right, title and interest in and to the Series 13
Preferred to the Company and irrevocably makes,
constitutes and appoints the Company as the true and
lawful agents and attorneys-in-fact of the Subscriber
("Attorney-In-Fact") with full power and authority
(except as provided below) to act hereunder individually,
or through duly appointed successor attorneys-in-fact, in
its sole discretion, all as hereinafter provided, in the
name of, for and on behalf of the Subscriber, as fully as
could the Subscriber if present and acting in person,
with respect to all matters in connection with the
transfer of the Series 13 Preferred.
8.2 Amendment; Waiver. Neither this Agreement nor the
Warrants shall be changed, modified or amended in any
respect except by the mutual written agreement of the
parties hereto. Any provision of this Agreement or the
Warrants may be waived in writing by the party which is
entitled to the benefits thereof. No waiver of any
provision of this Agreement or the Series 10 Warrants
shall be deemed to, or shall constitute a waiver of, any
other provision hereof or thereof (whether or not
similar), nor shall nay such waiver constitute a
continuing waiver.
8.3 Binding Effect; Assignment. Neither this Agreement nor
the Series 10 Warrants, or any rights or obligations
hereunder or thereunder, are assignable by the
Subscriber.
8.4 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
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
-16-
<PAGE>
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.
8.5 Severability. Any term or provisions of this Agreement
or the Series 10 Warrants 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 or thereof affecting the
validity or enforceability of such provision in any other
jurisdiction.
8.6 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or the Warrants or any term or provisions
hereof or thereof.
8.7 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
shall be deemed an original and all of which shall be
considered one and the same agreement, binding on all of
the parties hereto, 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.
8.8 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Shares to be sold.
8.9 Entire Agreement. This Agreement, along with the Series
10 Warrants and the Series 16 Preferred 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.
8.10 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.
-17-
<PAGE>
8.11 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
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 Herbert Strauss
Subscriber: RBB Bank Aktiengesellschaft
Burgring 16, 8010 Graz, Austria
Fax No.: 011-43-316-8072 ext. 392
8.12 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.
8.13 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
-18-
<PAGE>
whatsoever with respect to the Company without the
express prior approval of the Company.
8.14 Conflicts with Subscription Agreement. In the event of
a conflict between the terms of the Subscription
Agreement and the terms of this Agreement, this Agreement
shall control in all respects.
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement on the 3rd day of August,
1999.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
____________________________
Dr. Louis F. Centofanti
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/ Herbert Strauss
____________________________
Herbert Strauss
Headtrader
-19-
SEE RESTRICTIVE LEGEND ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF
DELAWARE
No. **** Shares ****
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
SERIES 14 CLASS N 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 14 Class N Convertible
Preferred Stock of
Perma-Fix Environmental Services, Inc.
transferable 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
________,1999.
_____________________________ ______________________________
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. 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, THESE SHARES OF COMMON STOCK
ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT
CERTAIN EXCHANGE AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND
THE COMPANY, DATED AS OF AUGUST 3, 1999, A COPY OF WHICH IS ON
FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
*******************
CERTIFICATE
FOR
****
SHARES
of the
CAPITAL STOCK
of
Perma-Fix Environmental Services, Inc.
Series 14 Class N Convertible Preferred Stock
Par Value $.001 Per Share
ISSUED TO
**** S P E C I M E N ****
DATED
___________, 1999
********************
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 ________________________________________
SEE RESTRICTIVE LEGEND ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF
DELAWARE
No. **** Shares ****
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
SERIES 15 CLASS O 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 15 Class O Convertible
Preferred Stock of
Perma-Fix Environmental Services, Inc.
transferable 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
________,1999.
_____________________________ ______________________________
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. 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 ARE ALSO SUBJECT TO THE REGISTRATION
RIGHTS SET FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED AS OF AUGUST 3,
1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICE.
*******************
CERTIFICATE
FOR
****
SHARES
of the
CAPITAL STOCK
of
Perma-Fix Environmental Services, Inc.
Series 15 Class O Convertible Preferred Stock
Par Value $.001 Per Share
ISSUED TO
**** S P E C I M E N ****
DATED
___________, 1999
********************
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 ________________________________________
SEE RESTRICTIVE LEGEND ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF
DELAWARE
No. **** Shares ****
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
SERIES 15 CLASS O 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 15 Class O Convertible
Preferred Stock of
Perma-Fix Environmental Services, Inc.
transferable 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
________,1999.
_____________________________ ______________________________
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. 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 ARE ALSO SUBJECT TO THE REGISTRATION
RIGHTS SET FORTH IN THAT CERTAIN EXCHANGE AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED AS OF AUGUST 3,
1999, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICE.
*******************
CERTIFICATE
FOR
****
SHARES
of the
CAPITAL STOCK
of
Perma-Fix Environmental Services, Inc.
Series 15 Class O Convertible Preferred Stock
Par Value $.001 Per Share
ISSUED TO
**** S P E C I M E N ****
DATED
___________, 1999
********************
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 ________________________________________
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0
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