SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 1, 1999
___________________________
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 1-11596 58-1954497
________________ _________________ ___________________
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1940 N.W. 67th Place, Suite A, Gainesville, Florida 32653
___________________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (352) 373-4200
______________________
Not applicable
____________________________________________________________
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
_____________________________________
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 $90,276.96
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,
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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.
For a period of thirty (30) calendar days prior to the end of
the Guarantee Period, (i) the TPS Trust, ALS Trust, TPS and ALS
shall not, directly or indirectly, or in conjunction with or
through any other person, firm, corporation, entity, partnership,
company or association, sell or dispose of or otherwise transfer
any shares of Common Stock, or other securities of the Company, and
(ii) the Company shall not, and shall cause its directors to not,
buy or otherwise acquire any shares of Common Stock over the NASDAQ
(other than in connection with the exercise of any outstanding
warrants or the conversion of any outstanding options or
convertible securities of the Company, or in connection with an
underwritten public offering of Common Stock).
The Company has listed the shares of Common Stock issued to
the ALS Trust on the NASDAQ and the Boston Stock Exchange, however,
such shares of Common Stock have not been registered with the
Securities and Exchange Commission (the "Commission") and the ALS
Trust agreed that such shares of Common Stock may be transferred
only pursuant to an effective registration statement under the
Securities Act of 1933, as amended, and any applicable state
securities laws unless there is furnished to the Company an opinion
of counsel or other evidence satisfactory to the Company's counsel,
to the effect that such registration is not required. In addition,
such shares of Common Stock may only be transferred in accordance
with the terms of the Chem-Con Stock Purchase Agreement. The
Company intends to File a Form D with the Commission and with
certain state agencies to describe the delivery of the 1,500,000
shares of Common Stock to the ALS Trust.
In connection with the Stock Purchase Agreements, the ALS
Trust, the TPS Trust, ALS and TPS agreed that for a period of two
(2) years from the date of Closing, none of them shall without the
prior consent of the Board of Directors of the Company (i) acquire
or permit any of their affiliates to acquire beneficial ownership
of any voting securities of the Company or any rights or option to
acquire voting securities of the Company or any securities
convertible into any voting securities of the Company, with the
exception that Michael F. Sullivan and Patrick Sullivan, sons of
TPS and ALS, may acquire shares of Common Stock; (ii) solicit, or
encourage any solicitation of, or permit any of their affiliates to
solicit, or encourage any solicitation of, (a) proxies with respect
to voting securities of the Company, or (b) tender or exchange
offers for voting securities of the Company or (c) any election
contest relating to the election of directors of the Company; or
(iii) take any action to acquire or affect the control of the
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Company, except that under the Stock Purchase Agreements, it is
recognized that the Sullivan Trusts have the right to select one
nominee to the Board of Directors of the Company under certain
limited conditions. In connection with the closing of the Stock
Purchase Agreements, a new seat was created on the Board of Directors
of the Company and TPS was appointed to fill such vacant seat.
The cash portion of the purchase price for Chem-Con and Chem-
Met were 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
Congress. In connection with the closing, using funds borrowed from
Congress, the Company paid an aggregate of approximately $3,842,560
to satisfy certain obligations of Chem-Met.
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.
Item 5. Other Events.
____________
(a) Amendment to Loan Agreement with Congress. In connection
with the acquisition of Chem-Con and Chem-Met, on May 27, 1999, Congress,
the Company, and the Company's subsidiaries, including Chem-Con and Chem-Met
(which, when acquired by the Company, would be wholly owned subsidiaries of
the Company) 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
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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.
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.
Immediately after the closing of the Stock Purchase Agreements, the
Company's availability under the revolving line of credit of the
Original Loan Agreement, as amended, was approximately
$2.0 million. 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.
(b) Election of Thomas P. Sullivan to the Board of Directors of
the Company. Under the terms of the Stock Purchase Agreements, the
Company's Board of Directors elected Thomas P. Sullivan ("TPS") to the
Board of Directors of the Company to fill a newly created directorship.
TPS is to hold such office until the next annual meeting of shareholders
of the Company and until his successor has been elected and qualified
or until his earlier resignation or removal. Under the Stock Purchase
Agreements, the Sullivan Trusts are entitled to have one (1) nominee
elected to the Company's Board of Directors as long as the Sullivan
Trusts own, in the aggregate, not less than 1.5 million shares of the
Company's Common Stock that the Sullivans acquired under the Stock
Purchase Agreements and the nominee is satisfactory to the Board of
Directors of the Company. TPS is the sole trustee and primary beneficiary
of the TPS Trust, which trust owned all of the capital stock of Chem-Met
prior to the consummation of the Stock Purchase Agreements. Ann L. Sullivan
("ALS"), wife of TPS, is the sole trustee and primary beneficiary of the
ALS Trust, which owned all of the capital stock of Chem-Con prior to the
consummation of the Stock Purchase Agreements. TPS was the President
of Chem-Met and Chem-Con for a period in excess of five (5) years prior
to the consummation of the Stock Purchase Agreements. TPS resides at
1021 Harvard Road, Grosse Point Park, Michigan 48320. TPS is currently
serving as a director of Charter National Bank Corp., located in Detroit,
Michigan, and has served as a director of such bank since 1982. TPS has
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a degree from John Carroll University. See Item 2 of this report for a
description of the Stock Purchase Agreements and indebtedness of the
Company to the Sullivan Trusts in connection therewith.
Item 7. Financial Statements and Exhibits.
__________________________________
(a) Financial statements of businesses acquired.
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") are not included herein, but shall
be filed by amendment to this Form 8-K not later than 60 days after
June 1, 1999.
(b) Pro forma financial information.
The unaudited pro forma financial information required by Article 11
of Regulation S-X, as promulgated pursuant to the Securities Act and the
Exchange Act is not included herein, but shall be filed by amendment
to this Form 8-K not later than 60 days after June 16, 1999.
(c) Exhibits.
2.1 Stock Purchase Agreement dated as of May 27, 1999,
among Perma-Fix Environmental Services, Inc.,
Chemical Conservation Corporation, Chemical
Conservation of Georgia, Inc., the Thomas P.
Sullivan Living Trust, dated September 6, 1978, the
Ann L. Sullivan Living Trust, dated September 6,
1978, Thomas P. Sullivan, and Ann L. Sullivan.
(Exhibits and Schedules to this agreement as
referenced therein are omitted, but will be
provided to the Commission upon request.)
2.2 Stock Purchase Agreement dated as of May 27, 1999,
among Perma-Fix Environmental Services, Inc., Chem-
Met Services, Inc., the Thomas P. Sullivan Living
Trust, dated September 6, 1978, the Ann L. Sullivan
Living Trust, dated September 6, 1978, Thomas P.
Sullivan, and Ann L. Sullivan. (Exhibits and
Schedules to this agreement as referenced therein
are omitted, but will be provided to the Commission
upon request.)
4.1 Amendment and Joinder to Loan and Security
Agreement (the "Loan Amendment") dated May 27,
1999, among Congress Financial Corporation
(Florida), Perma-Fix Environmental Services, Inc.
and the subsidiaries of Perma-Fix Environmental
Services, Inc.
10.1 Promissory Note for $1,230,000 issued to the Ann L.
Sullivan Living Trust dated September 6, 1978
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10.2 Promissory Note for $1,970,000 issued to the Ann L.
Sullivan Living Trust dated September 6, 1978
10.3 Promissory Note for $1,500,000 issued to the Thomas
P. Sullivan Living Trust dated September 6, 1978
10.4 Non-recourse Guaranty dated May 28, 1999, by and among
Chem-Met Services, Inc., the Thomas P. Sullivan Living Trust
dated September 6, 1978, and the Ann L. Sullivan Living Trust
dated September 6, 1978.
10.5 Mortgage dated May 28, 1999, by Chem-Met Services, Inc. to the
Thomas P. Sullivan Living Trust dated September 6, 1978 and the
Ann L. Sullivan Living Trust dated September 6, 1978.
10.6 Subordination Agreement dated May 27, 1999 among
Congress Financial Corporation (Florida), Perma-Fix
Environmental Services, Inc., the subsidiaries of
Perma-Fix Environmental Services, Inc., the Thomas
P. Sullivan Living Trust dated September 6, 1978
and the Ann L. Sullivan Living Trust dated
September 6, 1978
99.1 Press Release, dated June 3, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By: /s/ Richard T. Kelecy
_______________________________
Richard T. Kelecy
Chief Financial Officer
Date: June 16, 1999
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STOCK PURCHASE AGREEMENT
among
PERMA-FIX ENVIRONMENTAL SERVICES, INC.,
CHEMICAL CONSERVATION CORPORATION,
CHEMICAL CONSERVATION OF GEORGIA, INC.,
THE THOMAS P. SULLIVAN LIVING TRUST,
THE ANN L. SULLIVAN LIVING TRUST,
THOMAS P. SULLIVAN, an individual
and
ANN L. SULLIVAN, an individual
May 27, 1999
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TABLE OF CONTENTS
Page
ARTICLE
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.1 "Acquisitions". . . . . . . . . . . . . . . . . . . . .3
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . .3
1.4 "Chem-Con Common Stock" . . . . . . . . . . . . . . . .3
1.5 "Chem-Con Intellectual Property Rights" . . . . . . . .3
1.6 "Chemical Florida Shares" . . . . . . . . . . . . . . .3
1.7 "Chemical Georgia Shares" . . . . . . . . . . . . . . .3
1.8 "Chem-Met " . . . . . . . . . . . . . . . . . . . . . .3
1.9 "Chem-Met Agreement " . . . . . . . . . . . . . . . . .3
1.10 "Chem-Met Acquisition". . . . . . . . . . . . . . . . .4
1.11 "Closing" . . . . . . . . . . . . . . . . . . . . . . .4
1.12 "Closing Date". . . . . . . . . . . . . . . . . . . . .4
1.13 "Code". . . . . . . . . . . . . . . . . . . . . . . . .4
1.14 "Environmental Laws". . . . . . . . . . . . . . . . . .4
1.15 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . .4
1.16 "GAAP". . . . . . . . . . . . . . . . . . . . . . . . .4
1.17 "Governmental Authority". . . . . . . . . . . . . . . .4
1.18 "Laws". . . . . . . . . . . . . . . . . . . . . . . . .4
1.19 "Liens" . . . . . . . . . . . . . . . . . . . . . . . .5
1.20 "Mineral Rights". . . . . . . . . . . . . . . . . . . .5
1.21 "Permitted Encumbrances". . . . . . . . . . . . . . . .5
1.22 "Perma-Fix Common Stock" . . . . . . . . . . . . . . .5
1.23 "Promissory Notes". . . . . . . . . . . . . . . . . . .5
1.25 "Real Property" . . . . . . . . . . . . . . . . . . . .5
1.26 "Returns" . . . . . . . . . . . . . . . . . . . . . . .5
1.27 "Securities Act". . . . . . . . . . . . . . . . . . . .5
1.28 "SEC" . . . . . . . . . . . . . . . . . . . . . . . . .5
1.29 "Shares". . . . . . . . . . . . . . . . . . . . . . . .5
1.30 "Subsidiaries". . . . . . . . . . . . . . . . . . . . .5
1.31 "Taxes" . . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 2. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
THE ACQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . .6
2.1 The Acquisitions. . . . . . . . . . . . . . . . . . .6
2.1.1 Acquisitions of Chemical Florida and Chemical
Georgia. . . . . . . . . . . . . . . . . . . . .6
2.2 Closing . . . . . . . . . . . . . . . . . . . . . . . .6
2.3 ALS Trust/TPS Trust Nominee on Perma-Fix's Board of
Directors . . . . . . . . . . . . . . . . . . . . . . .6
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2.3.1 ALS Trust/TPS Trust Nominee to Perma-Fix Board
of Directors . . . . . . . . . . . . . . . . . .6
2.3.2 Information Regarding Sullivan Nominees. . . . .7
ARTICLE 3. . . . . . . . . . . . . . . . . . . . . . . . . . . .7
CONSIDERATION FOR SHARES . . . . . . . . . . . . . . . . . . . .7
3.1 Purchase Price. . . . . . . . . . . . . . . . . . . . .8
3.2 Guarantee Period. . . . . . . . . . . . . . . . . . . .8
3.3 Exchange of Shares for the Purchase Price . . . . . . .9
ARTICLE 4. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
REPRESENTATIONS AND WARRANTIES OF THE ALS TRUST,
THE TPS TRUST, ALS, TPS AND CHEM-CON . . . . . . . . . . . . . .9
4.1 Organization of the Sullivan Trusts . . . . . . . . . .9
4.2 Organization of Chem-Con. . . . . . . . . . . . . . . 10
4.3 Capital Stock of Chem-Con . . . . . . . . . . . . . . 10
4.4 Ownership Interests in Securities . . . . . . . . . . 10
4.5 Financials. . . . . . . . . . . . . . . . . . . . . . 11
4.5.1 Financial Statements. . . . . . . . . . . . . .11
4.5.2 Liabilities . . . . . . . . . . . . . . . . . .11
4.5.3 Net Worth . . . . . . . . . . . . . . . . . . .11
4.5.4 Transactions Since September 30, 1998 . . . . .11
4.6 Tax and Other Returns and Reports . . . . . . . . . . 12
4.6.1 Tax Returns . . . . . . . . . . . . . . . . . .12
4.6.2 Payment of Taxes. . . . . . . . . . . . . . . .12
4.6.3 Waiver of Statute of Limitations. . . . . . . .12
4.6.4 Tax Deficiencies. . . . . . . . . . . . . . . .12
4.7 Property. . . . . . . . . . . . . . . . . . . . . . . 13
4.7.1 Assets. . . . . . . . . . . . . . . . . . . . .13
4.7.2 Real Property . . . . . . . . . . . . . . . . .13
4.7.3 Leases. . . . . . . . . . . . . . . . . . . . .13
4.7.4 Notice. . . . . . . . . . . . . . . . . . . . .13
4.7.5 Personal Property . . . . . . . . . . . . . . .14
4.7.6 Notice from Insurance Carrier . . . . . . . . .14
4.8 Intellectual Property . . . . . . . . . . . . . . . . 14
4.8.1 Ownership . . . . . . . . . . . . . . . . . . .14
4.8.2 No Breach of License. . . . . . . . . . . . . .15
4.8.3 Year 2000 Issues. . . . . . . . . . . . . . . .15
4.9 Agreements, Contracts and Commitments . . . . . . . . 16
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4.9.1 Contracts . . . . . . . . . . . . . . . . . . .16
4.9.2 Written List. . . . . . . . . . . . . . . . . .17
4.10 No Breach of Statute or Contract; Governmental
Authorizations . . . . . . . . . . . . . . . . . . . .19
4.10.1 No Violation. . . . . . . . . . . . . . . . . .19
4.10.2 Permits and Licenses. . . . . . . . . . . . . .19
4.10.3 Reports . . . . . . . . . . . . . . . . . . . .19
4.10.4 Violation of Law and Contamination of Real
Property. . . . . . . . . . . . . . . . . . . .20
4.10.5 Permits under Environmental Laws. . . . . . . .20
4.10.6 Other Permits . . . . . . . . . . . . . . . . .21
4.11 No Litigation or Adverse Effects. . . . . . . . . . . 21
4.12 Authorization, Execution and Delivery of Agreement. . 21
4.13 Ability to Conduct the Business . . . . . . . . . . . 21
4.14 Disclosure. . . . . . . . . . . . . . . . . . . . . . 22
4.15 Broker's or Finder's Fee. . . . . . . . . . . . . . . 22
4.16 Insurance . . . . . . . . . . . . . . . . . . . . . . 22
4.17 Completeness of Documents -- Chem-Con and CCC . . . . 23
4.18 Completeness of Documents -- Sullivan Trusts. . . . . 23
4.19 Disposition of Assets . . . . . . . . . . . . . . . . 23
4.20 Obligations to Employees. . . . . . . . . . . . . . . 23
4.21 Condition of Plant, Machinery and Equipment . . . . . 25
4.22 Books of Account. . . . . . . . . . . . . . . . . . . 25
4.23 Stock Redemptions . . . . . . . . . . . . . . . . . . 25
4.24 Minute Books. . . . . . . . . . . . . . . . . . . . . 25
4.25 Indebtedness of Shareholders, etc . . . . . . . . . . 25
4.26 Business Prospects. . . . . . . . . . . . . . . . . . 25
4.27 Bank Accounts; Powers of Attorney . . . . . . . . . . 25
4.28 Sensitive Payments. . . . . . . . . . . . . . . . . . 26
ARTICLE 5. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ADDITIONAL REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE SULLIVANS AND THE SULLIVAN TRUSTS . . . . 26
Investment . . . . . . . . . . . . . . . . .. . . . . 26
5.3 Resale of Shares. . . . . . . . . . . . . . . . . . . 27
5.5 Shares to be held Indefinitely. . . . . . . . . . . 27
5.6 Periodic Reports-No Registration. . . . . . . . . . 28
5.7 Public Solicitation. . . . . . . . . . . . . . . . . 28
5.8 SEC Filings. . . . . . . . . . . . . . . . . . . . . 28
5.9 Total Assets of the ALS Trust; Knowledge of
Purchaser's Representatives . . . . . . . . . . . . . 28
5.10 Restrictions on Certain Actions. . . . . . . . . . . 28
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5.10.1 Prohibition Against Acquisition . . . . . . . . . . 28
5.10.2 Prohibition Against Solicitation. . . . . . . . . . 29
5.10.3 Prohibition Against Control . . . . . . . . . . . . 29
5.11 Attendance . . . . . . . . . . . . . . . . . . . . . . . . 29
5.12 Confidential Information; Non-Compete, and Non-
Solicitation . . . . . . . . . . . . . . . . . . . . . . . 29
5.12.1 Confidentiality . . . . . . . . . . . . . . . . . . 30
5.12.2 Covenant Not to Compete . . . . . . . . . . . . . . 30
5.12.3 Agreement Not to Solicit Employees and
Customers . . . . . . . . . . . . . . . . . . . . . 30
5.13 Specific Enforcement . . . . . . . . . . . . . . . . . . . 31
ARTICLE 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
NO SOLICITATION OF TRANSACTIONS . . . . . . . . . . . . . . . . . . 31
6.1 No Solicitation of Transactions. . . . . . . . . . . . . . 31
ARTICLE 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
REPRESENTATIONS AND WARRANTIES OF PERMA-FIX . . . . . . . . . . . . 32
7.1 Organization, etc. . . . . . . . . . . . . . . . . . . . . 32
7.2 Authorization, Execution and Delivery of Agreement . . . . 32
7.3 Capital Stock of Perma-Fix . . . . . . . . . . . . . . . . 32
7.4 SEC Filings. . . . . . . . . . . . . . . . . . . . . . . . 32
7.4.1. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.4.2 Material Adverse Change . . . . . . . . . . . . . . 33
7.5 Status of Perma-Fix Common Stock . . . . . . . . . . . . . 33
7.6 No Breach of Statute or Contract, Governmental
Authorizations . . . . . . . . . . . . . . . . . . . . . . 33
7.7 No Litigation or Adverse Events. . . . . . . . . . . . . . 34
7.8 Broker's or Finder's Fees. . . . . . . . . . . . . . . . . 34
ARTICLE 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
COVENANTS OF CONDUCT AND TRANSACTIONS
PRIOR TO AND AFTER THE CLOSING. . . . . . . . . . . . . . . . . . . 34
8.1 Investigations; Operation of Business of Chem-Con. . . . . 34
8.1.1 Access to Premises and Books. . . . . . . . . . . . 34
8.1.2 Business Organization of Chem-Con . . . . . . . . . 35
8.1.3 Ordinary Course of Business . . . . . . . . . . . . 35
8.1.4 Sale of Assets. . . . . . . . . . . . . . . . . . . 37
8.2 No Selling of Shares or Granting of Options. . . . . . . . 37
8.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.4 Governmental Reports . . . . . . . . . . . . . . . . . . . 38
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<PAGE>
8.5 Conduct of Business. . . . . . . . . . . . . . . . . . . . 38
8.6 Governmental Approvals . . . . . . . . . . . . . . . . . . 38
8.7 Encumber . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.8 Title Policies for Real Property Owned by Chemical
Florida. . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.9 Title Policies for Real Properties owned by Chemical
Georgia. . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.10 Real Property Located in Orlando, Florida. . . . . . . . . 39
8.11 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.12 Public Announcements . . . . . . . . . . . . . . . . . . . 40
8.13 Notification . . . . . . . . . . . . . . . . . . . . . . . 40
8.14 Filings. . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.15 Supplemental Disclosure. . . . . . . . . . . . . . . . . . 41
8.16 SEC Filings. . . . . . . . . . . . . . . . . . . . . . . . 41
8.17 Listing of Perma-Fix Common Stock. . . . . . . . . . . . . 41
8.18 Information for SEC Filings. . . . . . . . . . . . . . . . 41
8.19 Audited Financial Statements . . . . . . . . . . . . . . . 41
8.20 Public Disclosure. . . . . . . . . . . . . . . . . . . . . 42
8.21 Letter of Public Accountants . . . . . . . . . . . . . . . 42
8.22 Assumption of Liabilities. . . . . . . . . . . . . . . . . 43
8.23 Liability to Broker. . . . . . . . . . . . . . . . . . . . 43
8.24 Access to Premises and Books . . . . . . . . . . . . . . . 43
ARTICLE 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
CONDITIONS OF TRANSACTIONS CONTEMPLATED BY AGREEMENT;
ABANDONMENT OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 44
9.1 Closing Conditions of Perma-Fix. . . . . . . . . . . . . . 44
9.1.1 Resolutions of Board of Directors and
Shareholders of Chem-Con. . . . . . . . . . . . . . 44
9.1.2 Delivery of Trust Documents . . . . . . . . . . . . 44
9.1.3 Approval by Lender. . . . . . . . . . . . . . . . . 45
9.1.4 Representations and Warranties of the
Sullivans and the Sullivan Trusts to be True
and Correct and Compliance With Covenants. . . . . . 45
9.1.5 Representations and Warranties of Chem-Con to
be True and Compliance With Covenants. . . . . . . . 45
9.1.6 Third Party Consents. . . . . . . . . . . . . . . . 46
9.1.7 No Material Adverse Change. . . . . . . . . . . . . 46
9.1.8 Statutory Requirements; Litigation. . . . . . . . . 46
9.1.9 Opinion of Counsel of Chem-Con, the Sullivans
and the Sullivan Trusts . . . . . . . . . . . . . . 47
9.1.10 Due Diligence . . . . . . . . . . . . . . . . . . . 47
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9.1.11 Environmental Audit . . . . . . . . . . . . . . . . 47
9.1.12 Stock Certificates. . . . . . . . . . . . . . . . . 47
9.1.13 Permits . . . . . . . . . . . . . . . . . . . . . . 47
9.1.14 No Liens on Assets. . . . . . . . . . . . . . . . . 47
9.1.15 Listing of Perma-Fix Common Stock . . . . . . . . . 48
9.1.16 Minute Books and Stock Ledgers. . . . . . . . . . . 48
9.1.17 Financial Statements. . . . . . . . . . . . . . . . 48
9.1.18 Orlando Real Estate . . . . . . . . . . . . . . . . 48
9.1.19 Title Policies and Surveys. . . . . . . . . . . . . 48
9.1.20 Good Standing Certificates. . . . . . . . . . . . . 48
9.1.21 Resignation of Directors. . . . . . . . . . . . . . 48
9.1.22 Chem-Met Agreement. . . . . . . . . . . . . . . . . 49
9.1.23 Valdosta Remediation. . . . . . . . . . . . . . . . 49
9.1.24 Shareholder Approval. . . . . . . . . . . . . . . . 49
9.1.25 Accountants Letters . . . . . . . . . . . . . . . . 49
9.1.26 Officer and Director Waiver . . . . . . . . . . . . 49
9.1.27 Fairness Opinion. . . . . . . . . . . . . . . . . . 49
9.1.28 Michigan Strategic Fund . . . . . . . . . . . . . . 49
9.2 Conditions to Obligations of Chem-Con and The ALS
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.2.1 Resolutions of Perma-Fix Board of Directors
and Shareholders. . . . . . . . . . . . . . . . . . 49
9.2.2 Representations and Warranties of Perma-Fix
to be True. . . . . . . . . . . . . . . . . . . . . 50
9.2.3 No Material Adverse Change. . . . . . . . . . . . . 50
9.2.4 Litigation. . . . . . . . . . . . . . . . . . . . . 50
9.2.5 Opinion of Counsel of Perma-Fix . . . . . . . . . . 51
9.3 Termination of Agreement and Abandonment of
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . 51
9.3.1 Conditions of the Sullivans, the Sullivan
Trusts or Chem-Con Not Met. . . . . . . . . . . . . 51
9.3.2 Conditions of Perma-Fix Not Met . . . . . . . . . . 51
9.3.3 Termination by Perma-Fix or the Sullivans
under Section 9.3 of the Chem-Met Agreement. . . . .51
9.3.4 Mutual Consent . . . . . . . . . . . . . . . . . . .51
9.4 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .51
ARTICLE 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS. . . . . . . . .51
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . .51
10.2 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . .52
ARTICLE 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
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<PAGE>
INDEMNIFICATION AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . .52
11.1 Indemnification by the Sullivans and the Sullivan
Trusts. . . . . . . . . . . . . . . . . . . . . . . . . . .52
11.2 Indemnification as to Four County Landfill. . . . . . . . .53
11.3 Notice of Claim . . . . . . . . . . . . . . . . . . . . . .53
11.4 Survival of Representations and Remedies. . . . . . . . . .54
ARTICLE 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . .54
12.1 Entire Agreement and Amendment. . . . . . . . . . . . . . .54
12.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .54
12.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . .54
12.4 Benefit of Parties; Assignment. . . . . . . . . . . . . . .54
12.5 Pronouns. . . . . . . . . . . . . . . . . . . . . . . . . .54
12.6 Headings. . . . . . . . . . . . . . . . . . . . . . . . . .55
12.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . .55
12.8 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . .55
12.9 Severability. . . . . . . . . . . . . . . . . . . . . . . .55
12.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . .56
12.11 Termination of Previous Agreement as defined in the
seventh WHEREAS clause of this Agreement. . . . . . . . .56
Schedule "A" - List of all jurisdictions in which Chem-Con is
authorized to do business
Schedule "B" - List of all of Chem-Con's ownership interests
in other business enterprises
Schedule "C" - Liabilities
Schedule "D" - List of all transactions of Chem-Con since
September 30, 1998
Schedule "E" - Tax Returns; Payment of Taxes; Waiver of
Statute of Limitations; Tax Deficiencies
Schedule "F" - List of all Permitted Encumbrances and Liens
on Chem-Con assets; Real Property owned by
Chem-Con; title insurance policies; leases;
Chem-Con personal property; notices of
violations
Schedule "G" - List of all contracts
Schedule "H" - List of contracts, leases, and agreements re
Chem-Con business (copies)
Schedule "I" - Permits and licenses and reports since
December 31, 1990
Schedule "J" - Litigation
Schedule "K" - List of all trade names, trademarks, service
marks, patents, copyrights and applications
Schedule "L" - Insurance
Schedule "M" - Disposition of Assets
Schedule "N" - Determination letters on benefit plans
Schedule "O" - Condition of plant, machinery and equipment
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Schedule "P" - Indebtedness of Shareholders
Schedule "Q" - Bank accounts/borrowing resolutions of Chem-
Con; Powers of Attorney
Schedule "R" - Intentionally Omitted
Schedule "S" - Year 2000 Information
Exhibit "A" - Permitted Encumbrances
Exhibit "B" - First Promissory Note
Exhibit "C" - Second Promissory Note
Exhibit "D" - Non-Recourse Guaranty
Exhibit "E" - Mortgage
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<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as
of the 27th day of May, 1999, among PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Perma-Fix"); 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
("ALS"). Collectively, the TPS Trust and the ALS Trust are
referred to herein as the "Sullivan Trusts,"; TPS and ALS are
collectively referred to as the "Sullivans"; and Chemical Florida
and Chemical Georgia are referred to herein as "Chem-Con."
W I T N E S S E T H:
WHEREAS, the ALS Trust is the sole and exclusive owner
of all of the issued and outstanding capital stock of Chemical
Florida and Chemical Georgia (collectively the "Chem-Con Common
Stock");
WHEREAS, ALS is the sole trustee and primary
beneficiary of the ALS Trust;
WHEREAS, TPS is the sole trustee and primary
beneficiary of the TPS Trust;
WHEREAS, the Sullivans are husband and wife;
WHEREAS, the Board of Directors of Perma-Fix and
Chemical Florida deem it advisable and in the best interest of each
corporation and its respective stockholders that Perma-Fix purchase
all of the outstanding capital stock of Chemical Florida in order
to advance the long-term business interest of each corporation;
WHEREAS, the Board of Directors of Perma-Fix and
Chemical Georgia deem it advisable and in the best interests of
each corporation and its respective stockholders that Perma-Fix
purchase all of the outstanding capital stock of Chemical Georgia
in order to advance the long-term business interest of each
corporation;
WHEREAS, Chem-Con Corp., a Florida corporation ("CCC")
is a wholly owned subsidiary of Chemical Florida.
WHEREAS, the parties previously entered into a certain
"Agreement and Plan of Merger" dated March 15, 1999 among Perma-
Fix; Florida Perma-Chem, Inc., a Florida corporation; Georgia
Perma-Chem, Inc., a Georgia corporation; Chemical Florida; Chemical
<PAGE>
Georgia; TPS Trust; ALS Trust; TPS; and ALS pursuant to which Chem-
Con would merge with and into certain wholly-owned subsidiaries of
Perma-Fix ("Agreement and Plan of Merger");
WHEREAS, due to changing circumstances, the parties
hereto desire that this Agreement serve to amend, restate and
replace the Agreement and Plan of Merger and that the Agreement and
Plan of Merger be considered null and void and of no effect
whatsoever upon execution of this Agreement and that any rights or
duties created under the Agreement and Plan of Merger be discharged
in their entirety as of the execution of this Agreement to be fully
supplanted by the rights and duties created hereunder;
WHEREAS, the parties hereto desire that Perma-Fix
purchase all of the outstanding shares of capital stock of Chemical
Florida, pursuant to the terms of this Agreement (the "Florida
Acquisition"), and the parties desire to provide for certain
undertakings, conditions, representations, warranties and covenants
in connection with such transactions contemplated hereby;
WHEREAS, the parties hereto desire that Perma-Fix
purchase all of the outstanding shares of capital stock of Chemical
Georgia, pursuant to terms of this Agreement, (the "Georgia
Acquisition"), and the parties desire to provide for certain
undertakings, conditions, representations, warranties and covenants
in connection with such transactions;
WHEREAS, the Florida Acquisition and the Georgia
Acquisition are collectively referred to herein as the
"Acquisitions";
WHEREAS, as a necessary and integral part of this
Agreement, the Sullivans, the Sullivan Trusts, Perma-Fix and
Chem-Met (as defined below) have entered into the Chem-Met
Agreement (as defined below) and the closing of the Chem-Met
Agreement as a necessary and integral condition to the execution of
this Agreement and the Closing (as defined below) of this
Agreement.
WHEREAS, prior to execution of the Agreement, TPS
served as the President of Chemical Florida, Chemical Georgia and
Chem-Met (as defined herein);
WHEREAS, TPS possesses extensive knowledge of Chemical
Florida's, Chemical Georgia's and Chem-Met's affairs;
WHEREAS, in order to induce Perma-Fix to enter into
this Agreement, TPS has agreed to a certain covenant not to compete
and to maintain the confidentiality of information he has received
from Chem-Con and Chem-Met pursuant to the terms of this Agreement;
WHEREAS, the Board of Directors of Perma-Fix has
approved and adopted the Acquisitions and this Agreement;
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WHEREAS, the Board of Directors and the shareholders of
Chemical Florida and Chemical Georgia have approved the execution,
delivery and performance by Chemical Florida and Chemical Georgia
of this Agreement, and the transaction contemplated thereunder and
the obligations of Chemical Florida and Chemical Georgia
thereunder.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants, agreements, representations and warranties
herein contained, the parties hereto agree as follows:
ARTICLE
1
DEFINITIONS
___________
For purposes of this Agreement, the following terms
shall have the respective meanings set forth below:
1.1 "Acquisitions" has the meaning as defined in the thirteenth
WHEREAS clause of this Agreement.
1.2 "Affiliate" has the meaning set forth in Rule 405 promulgated
under the Securities Act, whether or not such is an Affiliate
now or becomes an Affiliate after the date hereof.
1.3 "Agreement and Plan of Merger" has the meaning as defined in
the ninthWHEREAS clause of this Agreement.
1.4 "Chem-Con Common Stock" has the meaning as specified in
Section 4.3 hereof.
1.5 "Chem-Con Intellectual Property Rights" has the meaning as
defined in Section 4.8.1 of this Agreement.
1.6 "Chemical Florida Shares" means all of the issued and
outstanding shares of capital stock of Chemical Florida of
whatsoever character and description.
1.7 "Chemical Georgia Shares" means all of the issued and
outstanding shares of capital stock of Chemical Georgia of
whatsoever character and description
1.8 "Chem-Met " shall mean Chem-Met Services, Inc. a Michigan
corporation.
1.9 "Chem-Met Agreement " shall mean that certain Stock Purchase
Agreement among Perma-Fix, Chem-Met, the Sullivan Trusts and
the Sullivans, dated as of the date of this Agreement, whereby
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<PAGE>
Perma-Fix is to purchase all of the outstanding capital stock
of Chem-Met.
1.10 "Chem-Met Acquisition" shall mean the purchase by Perma-Fix of
all of the capital stock of Chem-Met of whatsoever character
and description pursuant to the Chem-Met Agreement.
1.11 "Closing" has the meaning as specified in Section 2.2 hereof.
1.12 "Closing Date" has the meaning as specified in Section 2.2
hereof.
1.13 "Code" means the Internal Revenue Code of 1986, as amended.
1.14 "Environmental Laws" mean all federal, state, county, local
and foreign environmental, health, and safety laws, codes,
ordinances and all rules and regulations promulgated
thereunder, including, without limitation, laws relating to
management, emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, air, surface
water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals, petroleum
products or industrial, solid, toxic or hazardous substances
or wastes. Environmental Laws include, without limitation,
(i) the Federal Water Pollution Control Act ("FWPCA"), 33
U.S.C. Section 1251, et seq.; (ii) the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601, et seq.; (iii) the Resource Conservation and Recovery
Act ("RCRA"), 42 U.S.C. Section 6901, et seq.; (iv) the Clean Air
Act ("Clean Air Act"), 42 U.S.C. Section 7401, et seq; (v) the Toxic
Substances Control Act ("TSCA"), 15 U.S.C. Section 201, et seq.;
(vi) any and all other analogous state and local statutes;
and, (vii) all rules and regulations promulgated under any of
the foregoing.
1.15 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated
thereunder.
1.16 "GAAP" means United States generally accepted accounting
principles.
1.17 "Governmental Authority" means any agency, instrumentality,
department, commission, court, tribunal or board of any
government, whether foreign or domestic and whether national,
federal, state, provincial, or local.
1.18 "Laws" mean any and all federal, state and local laws, rules,
regulations, codes, orders, ordinances, judgments, injunctions
and decrees.
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<PAGE>
1.19 "Liens" mean all security interests, liens, mortgages, claims,
charges, pledges, restrictions, equitable interests,
easements, property rights or encumbrances of any nature.
1.20 "Mineral Rights" mean the mineral and oil and gas rights,
interest and leases, pipelines and pipeline rights of way
situated on and under the Real Property.
1.21 "Permitted Encumbrances" means (i) liens listed on Exhibit "A"
attached hereto; (ii) liens for taxes not yet delinquent or
being contested in good faith by appropriate proceedings; and,
(iii) such technical imperfections of title and easements, if
any, which do not in the sole discretion of Perma-Fix, when
considered together, detract materially from the value of, or
interfere with, the present or presently proposed use of, any
Real Property.
1.22 "Perma-Fix Common Stock" means the Common Stock, par value
$.001 per share, of Perma-Fix.
1.23 "Promissory Notes" has the meaning specified in Section 3.1
hereof.
1.24 "Quanta" means Xbox Corporation, a Michigan corporation,
formerly known as Quanta Corporation, in which all of its
issued and outstanding capital stock is owned by the ALS
Trust.
1.25 "Real Property" means all real property, land, buildings,
improvements and structures owned or leased by Chem-Con.
1.26 "Returns" mean all returns, declaration, reports, estimates,
information returns and statements required to be filed with
or supplied to any taxing authority in connection with any
Taxes.
1.27 "Securities Act" means the Securities Act of 1933, as amended.
1.28 "SEC" means the U.S. Securities and Exchange Commission.
1.29 "Shares" means all of the issued and outstanding shares of
capital stock of Chemical Florida and Chemical Georgia of
whatsoever character and description.
1.30 "Subsidiaries" means all corporations fifty percent (50%) or
more of the common stock or other form of equity of which
shall be owned, directly or indirectly through one or more
intermediaries, by another corporation.
1.31 "Taxes" mean all taxes, charges, fees, levies or other
assessments, including, without limitation, income, gross
receipts, excise, real and personal property, sales, transfer,
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<PAGE>
license, payroll and franchise taxes, imposed by any
Governmental Authority and shall include any interest,
penalties or additions to tax attributable to any of the
foregoing.
ARTICLE 2
THE ACQUISITIONS
________________
2.1 The Acquisitions.
2.1.1 Acquisitions of Chemical Florida and Chemical Georgia.
Subject to the terms of this Agreement, at the Closing,
the ALS Trust shall sell, assign, transfer and convey
to Perma-Fix, and Perma-Fix shall purchase from the ALS
Trust, all of the Shares, free and clear of any and all
Liens, pursuant and subject to the terms of this
Agreement. Chemical Florida and Chemical Georgia agree
to the Acquisitions, and the Board of Directors and
Shareholders of Chemical Florida and Chemical Georgia
have approved this Agreement and the execution,
delivery and performance thereof by Chemical Florida
and Chemical Georgia.
2.2 Closing. The closing of the Acquisitions (the "Closing") will
take place at 10:00 a.m., Central Standard Time, pursuant to
the terms of this Agreement on May 27, 1999 (the "Closing
Date"), at the offices of Conner & Winters, P.C., One
Leadership Square, 211 North Robinson, Suite 1700, Oklahoma
City, Oklahoma, 73102, unless another date, place or time is
agreed to in writing by Perma-Fix and Chem-Con.
2.3 ALS Trust/TPS Trust Nominee on Perma-Fix's Board of Directors.
2.3.1 ALS Trust/TPS Trust Nominee to Perma-Fix Board of
Directors. Subject to and except as otherwise provided
by, the terms of this Section 2.3.1, after the Closing
Date, and provided that at all times through the date
of Perma-Fix's annual meeting of shareholders at which
the Sullivan Trusts are entitled to have their one (1)
nominee ("Sullivan Nominee") elected to Perma-Fix's
Board of Directors under this Section 2.3.1, the
Sullivan Trusts owns of record, in the aggregate, not
less than 1,500,000 shares of the Perma-Fix Common
Stock that the Sullivan Trusts acquired under this
Agreement and the Chem-Met Agreement, the Sullivan
Trusts may select one (1) nominee for nomination to
Perma-Fix's Board of Directors and Perma-Fix agrees to
recommend to the shareholders of Perma-Fix at Perma-
Fix's annual meeting of shareholders the one nominee
selected by the Sullivan Trusts if such Sullivan
Nominee is satisfactory to the Board of Directors of
Perma-Fix, along with all other nominees nominated by
the Board of Directors of Perma-Fix, for election to
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<PAGE>
the Board of Directors of Perma-Fix. Notwithstanding
the above, if at any time and for any reason after the
Closing Date the Sullivan Trusts' ownership of record
of Perma-Fix Common Stock acquired under this Agreement
and the Chem-Met Agreement is, in the aggregate, less
than 1,500,000 shares of Perma-Fix Common Stock, then
the Sullivan Trusts shall not be entitled to have a
Sullivan Nominee elected or recommended by Perma-Fix
for election to the Board of Directors of Perma-Fix.
Nothing contained in this Section 2.3.1 shall obligate
or cause the Board of Directors of Perma-Fix to violate
any of their fiduciary duties. Notwithstanding the
foregoing, from and after the breach or default by any
of the Sullivans and/or the Sullivan Trusts of any of
their obligations, agreements or covenants contained in
this Agreement or the Chem-Met Agreement, the Sullivan
Trusts shall have no further rights under this Section
2.3.1 and no further right to designate a Sullivan
Nominee and Perma-Fix shall have no obligation to
recommend or otherwise take affirmative action
regarding any nominee of the Sullivan Trusts for a
position on the Perma-Fix Board of Directors.
2.3.2 Information Regarding Sullivan Nominees. During the
period that the Sullivan Trusts are entitled to have
one nominee elected to the Board of Directors of Perma-
Fix, the Sullivan Trusts shall provide to the President
of Perma-Fix the name of such nominee or nominees and
a written description of such nominee or nominees
within 120 days prior to the date of the annual meeting
of shareholders at which the Sullivan Nominee is to be
elected to Perma-Fix's Board of Directors. The written
description of such nominee or nominees must contain
all such information regarding such nominee or nominees
as is required to be disclosed in a Perma-Fix Proxy
Statement relating to the election of directors under
Schedule 14A as promulgated under Section 14(a) of the
Exchange Act (including, but not limited to,
information required by Item 401 of Regulation S-K).
Within thirty (30) days after receipt by the President
of Perma-Fix of such written information regarding the
Sullivan Trusts proposed nominee, Perma-Fix shall
advise the Sullivan Trusts if such nominee is not
acceptable to the Board of Directors of Perma-Fix. If
any such nominee selected by the Sullivan Trusts is not
acceptable, the Sullivan Trusts shall, within ten (10)
days from being advised by Perma-Fix that its nominee
is not acceptable to the Board of Directors of Perma-
Fix, supply the name and the required written
description concerning the Sullivan Trusts' new
nominee, if any, with such new nominee to be
satisfactory to the Board of Directors of Perma-Fix.
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<PAGE>
ARTICLE 3
CONSIDERATION FOR SHARES
________________________
3.1 Purchase Price. Subject to the terms of this Agreement, at
the Closing Perma-Fix shall pay to the ALS Trust the total
consideration of $6,200,000 (the "Purchase Price") for the
Shares which Purchase Price shall be payable at the Closing as
follows: (i) $3,000,000 payable by the issuance of 1,500,000
shares of Perma-Fix Common Stock, which shares shall be issued
pursuant to this Agreement, with each such share based on an
agreed upon value of $2.00 per share; (ii) delivery of a
Perma-Fix Promissory Note in the original principal amount of
$1,230,000 ("First Promissory Note"), with such First
Promissory Note bearing an annual rate of interest of 5.5% for
the first three years and 7% for the remaining two years,
payable in equal monthly installments of principal and
interest of $23,625, and delivery of a Perma-Fix Promissory
Note in the original principal amount of $1,970,000 ("Second
Promissory Note"), with such Second Promissory Note bearing an
annual rate of interest of 5.5% for the first three years and
7% for the remaining two years, payable in equal monthly
installments of principal and interest of $37,839.49. The
First Promissory Note shall be in substantially the same form
as attached hereto as Exhibit "B". The Second Promissory Note
shall be substantially the same form as attached hereto as
Exhibit "C". The First Promissory Note and the Second
Promissory Note collectively referred to as the "Promissory
Notes." At the Closing, Chem-Met shall execute (i) a
non-recourse guaranty ("Non-Recourse Guaranty"), a copy of
which is attached hereto as Exhibit "D", which Non-Recourse
Guaranty will guarantee Perma-Fix's payment obligations under
the First Promissory Note and Second Promissory Note, and (ii)
the Mortgage, a copy of which is attached hereto as Exhibit
"E" (the "Mortgage"), securing Chem-Met's performance under
the Non-Recourse Guaranty.
3.2 Guarantee Period. If the ALS Trust owns any of the shares of
Perma-Fix Common Stock issued to the ALS Trust at the Closing
pursuant to clause (i) of Section 3.1 hereof at the end of
eighteen (18) months from the Closing Date (the "Guarantee
Period") and the market value (as determined below) per share
of Perma-Fix Common Stock at the end of the Guarantee Period
is less than $2.00 per share, Perma-Fix agrees to 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 Perma-Fix Common Stock
issued to the ALS Trust under Section 3.1 hereof 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 Perma-Fix Common Stock owned by the ALS Trust
at the end of the Guarantee Period, with such amount, if any,
payable by Perma-Fix to the ALS Trust, at Perma-Fix's option,
in cash or in Perma-Fix Common Stock or a combination thereof.
Notwithstanding anything herein to the contrary, the aggregate
number of shares of Perma-Fix Common Stock issued or issuable
under this Agreement for any reason whatsoever shall not
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exceed eighteen percent (18%) of the number of issued and
outstanding shares of Perma-Fix Common Stock on the date
immediately preceding the Closing Date. The market value of
each share of Perma-Fix Common Stock at the end of the
Guarantee Period shall be determined based on the average of
the closing sale price per share of Perma-Fix Common Stock as
reported on the NASDAQ for the five (5) consecutive trading
days ending with the trading day immediately prior to the end
of the Guarantee Period. The "market value" of each share of
Perma-Fix Common Stock issued by Perma-Fix, if any, in
payment, in whole or in part, of such amount due to the ALS
Trust under this Section 3.2 shall be based on the average of
the closing sale price per share of Perma-Fix Common Stock as
reported on the NASDAQ for five (5) consecutive trading days
ending with the trading day immediately prior to the end of
the Guarantee Period. For a period of thirty (30) calendar
days prior to the end of the Guarantee Period, (i) the
Sullivans and the Sullivan Trusts shall not, directly or
indirectly, or in conjunction with or through any other
person, firm, corporation, entity, partnership, company or
association, sell or dispose of or otherwise transfer any
shares of Perma-Fix Common Stock, or other securities of
Perma-Fix, and (ii) Perma-Fix shall not, and shall cause its
directors to not, buy or otherwise acquire any shares of
Perma-Fix Common Stock over the NASDAQ (other than in
connection with the exercise of any outstanding warrants or
the conversion of any outstanding options or convertible
securities of Perma-Fix, or in connection with an
underwrittten public offering of Perma-Fix Common Stock).
3.3 Exchange of Shares for the Purchase Price. The procedure for
the ALS Trust exchanging all of the outstanding Shares for the
Purchase Price pursuant to this Agreement is as follows: at
the Closing, the ALS Trust, being the sole beneficial and
record owner of all of the issued and outstanding Shares,
shall deliver to Perma-Fix all certificates representing all
of the issued and outstanding Shares (the "Certificates"),
duly and validly endorsed, in the name of Perma-Fix, with
signatures guaranteed by a national bank or investment banking
firm, and, subject to the terms and conditions of this
Agreement, the ALS Trust, being the sole and exclusive holder
of any and all such Certificates shall be entitled to receive
in exchange for all of the Shares the following: (i) a
certificate representing 1,500,000 shares of Perma-Fix Common
Stock, (ii) the First Promissory Note, duly executed by
Perma-Fix, and (iii) the Second Promissory Note duly executed
by Perma-Fix, all pursuant to Section 3.1 hereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE ALS TRUST,
THE TPS TRUST, ALS, TPS AND CHEM-CON
_________________________________________________
The ALS Trust, the TPS Trust, ALS, TPS, Chemical
Florida and Chemical Georgia, jointly and severally, represent and
warrant to Perma-Fix that, as of the date of this Agreement and as
of the Closing, the following:
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4.1 Organization of the Sullivan Trusts. The Sullivan Trusts are
valid trusts. ALS is the primary beneficiary under the ALS
Trust, and ALS is the sole trustee under the ALS Trust. TPS
is the primary beneficiary of the TPS Trust, and TPS is the
sole trustee under the TPS Trust. ALS, as sole trustee under
the ALS Trust, and TPS as sole trustee under the TPS Trust,
have full power, authority and capacity to enter into this
Agreement and to perform any and all obligations and covenants
of the ALS Trust and the TPS Trust under this Agreement.
4.2 Organization of Chem-Con. Each of Chemical Florida, Chemical
Georgia and CCC is a corporation duly organized, validly
existing and in good standing under the laws of the respective
jurisdiction of its incorporation, and each has the corporate
power to own its properties and to carry on its business as is
now being conducted. Each of Chemical Florida, Chemical
Georgia and CCC is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the nature
of the business conducted by it or the character of the
property owned, leased or used by it makes such qualification
necessary. A list of all such jurisdictions, separately shown
and indicated, is set forth on Schedule "A" attached hereto.
4.3 Capital Stock of Chem-Con. The authorized capital stock of
Chemical Florida consists solely of seven thousand five
hundred (7,500) shares of common stock, par value $1.00
("Chemical Florida Common Stock"), of which two hundred (200)
shares are issued and outstanding and all of such issued and
outstanding shares of Chemical Florida Common Stock are owned
of record and beneficially by the ALS Trust. The authorized
capital stock of Chemical Georgia consists solely of one
hundred thousand (100,000) shares of common stock, par value
$1.00 ("Chemical Georgia Common Stock"), of which seventy-five
thousand (75,000) shares are issued and outstanding and all of
such issued and outstanding shares of Chemical Georgia Common
Stock are owned of record and beneficially by the ALS Trust.
The authorized capital stock of CCC consists solely of seven
thousand five hundred (7,500) shares of common stock, par
value $1.00 ("CCC Common Stock"), of which one hundred (100)
shares are issued and outstanding and all of such issued and
outstanding shares of CCC Common Stock are owned of record and
beneficially by Chemical Florida. Collectively, the Chemical
Florida Common Stock, and the Chemical Georgia Common Stock
are referred to herein as the "Chem-Con Common Stock." No
shares of Chem-Con Common Stock or shares of CCC Common Stock
are held in treasury or reserved for issuance at a later date.
All of the issued and outstanding shares of Chem-Con Common
Stock and of CCC Common Stock are (i) validly authorized and
issued, (ii) fully paid and nonassessable and (iii) free and
clear of any and all Liens. Subsequent to September 30, 1998,
Chem-Con has not declared or paid any dividend, or declared or
made any distribution on, or authorized the creation or
issuance of, or issued, or authorized or effected any split-up
or any other recapitalization of, any of its capital stock, or
directly or indirectly redeemed, purchased or otherwise
acquired any of their respective outstanding capital stock or
agreed to take any such action. There are no outstanding
contractual obligations of Chem-Con or CCC to repurchase,
redeem or otherwise acquire any of their respective
outstanding shares of capital stock. There are no outstanding
agreements, options, warrants or rights to subscribe for or
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purchase from or otherwise receive from Chem-Con, CCC, or the
ALS Trust or any other party any of Chem-Con's or CCC's
capital stock or other securities of any kind or description
of Chem-Con or CCC.
4.4 Ownership Interests in Securities. Set forth on Schedule "B"
attached hereto is a list of all equity or ownership interests
in, and all bonds and debentures of, other business
enterprises which Chem-Con owns and such Schedule indicates
any such interests which are held subject to any legal,
contractual or other limitations or restrictions on the right
to resell the same.
4.5 Financials.
4.5.1 Financial Statements. Chemical Florida and Chemical
Georgia have previously furnished Perma-Fix a true and
correct copy of the audited financial statements for
Chemical Florida, Chemical Georgia, Chem-Met and their
Subsidiaries, on a combined basis, for the fiscal year
ended September 30, 1998, ("Audited Financial
Statements"), consisting of, among other things, (i) a
balance sheet as of September 30, 1998, and (ii)
statement of income and related earnings for the fiscal
year ended September 30, 1998. The Audited Financial
Statements are true, correct and complete in all
material respects and correctly present the financial
conditions and results of operations of Chemical
Florida, Chemical Georgia, Chem-Met and their
Subsidiaries on a combined basis as of the date
thereof. For the purposes of this Agreement, the
Audited Financial Statements shall be deemed to include
any notes to such financial statements. The Audited
Financial Statements have been prepared in conformity
with GAAP, consistently applied throughout the periods
indicated and on a basis consistent with prior periods.
4.5.2 Liabilities. Except as set forth in Schedule "C"
attached hereto, Chemical Florida, Chemical Georgia and
their Subsidiaries do not have any liabilities or
obligations either accrued, absolute, contingent, known
or unknown, matured or unmatured, or otherwise, which
have not been:
4.5.2.1 reflected in the Audited Financial Statements;
or
4.5.2.2 incurred consistent with past practices of
Chem-Con in the ordinary and normal course of
Chem-Con's business since September 30, 1998.
4.5.3 Net Worth. Except as set forth in Schedule "C"
attached hereto, there are no claims against or
liabilities or obligations of, or any legal basis for
any claims against or liabilities or obligations of,
Chem-Con or its Subsidiaries which might result in a
material reduction in the net worth of Chem-Con or its
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Subsidiaries from that shown in the Audited Financial
Statements or any material charge against net earnings
of Chem-Con and its Subsidiaries.
4.5.4 Transactions Since September 30, 1998. Except as set
forth on Schedule "D", between September 30, 1998, and
the date of this Agreement, Chem-Con and its
Subsidiaries have not engaged in any material
transaction not in the ordinary and normal course of
business and, except as set forth on such Schedule "D",
there has not been, occurred or arisen since
September 30, 1998:
4.5.4.1 any material adverse change in the financial
condition or in the operations of the business
of Chem-Con or its Subsidiaries from that
shown on the Audited Financial Statements; or
4.5.4.2 any damage or destruction in the nature of a
casualty loss, or interference with its
business from such loss or from any labor
dispute or court or governmental action, order
or decree, whether covered by insurance or
not, materially and adversely affecting the
properties or business of Chem-Con or its
Subsidiaries; or
4.5.4.3 any increase, except increases given in
accordance with prior practice, in the
compensation payable or to become payable by
Chem-Con or its Subsidiaries to any of Chem-
Con's or its Subsidiaries' employees or any
increase in the benefits, regardless of
amount, in any bonus, insurance, pension or
other plan, program, payment or arrangement
with respect to employee benefits made to, for
or with any officers or employees; or
4.5.4.4 any extraordinary loss (as defined in Opinions
No. 9 and No. 30 of the Accounting Principles
Board of American Institute of Certified
Public Accountants) suffered by Chem-Con or
its Subsidiaries which is material to Chem-Con
or its Subsidiaries, or any waiver by Chem-Con
or its Subsidiaries of any rights which are
material to Chem-Con or its Subsidiaries.
4.6 Tax and Other Returns and Reports.
4.6.1 Tax Returns. All federal, state, local, foreign,
personal property, and real property tax returns
required to be filed by the ALS Trust and Chem-Con and
its Subsidiaries have been timely filed with the
appropriate governmental agencies in all jurisdictions
in which such returns and reports are required to be
filed.
<PAGE>
4.6.2 Payment of Taxes. All federal, state, local and
foreign taxes (including interest and penalties), due
from the ALS Trust, Chem-Con and its Subsidiaries (i)
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have been fully paid, or (ii) are being contested in
good faith by appropriate proceedings and are disclosed
on Schedule "E" attached hereto.
4.6.3 Waiver of Statute of Limitations. No waivers of
statutes of limitation in respect of any Returns or tax
reports have been given or requested, except as shown
on such Schedule "E".
4.6.4 Tax Deficiencies. There are no potential tax
deficiencies which may arise from issues which have
been raised or which have not yet been raised but which
might reasonably be expected to be raised by the
Internal Revenue Service ("IRS") or any other taxing
authority that have not been disclosed on Schedule "E"
and may reasonably be expected to have a material
adverse effect on Chem-Con or its Subsidiaries.
4.7 Property.
4.7.1 Assets. Except as disclosed in Schedule F attached
hereto: Chem-Con and its Subsidiaries own and have good
and marketable title in and to all of the assets used
by them in the operation or conduct of their business,
or required by Chem-Con and its Subsidiaries for the
normal and ordinary conduct of their business, free and
clear of any and all Liens, except for Permitted
Encumbrances.
4.7.2 Real Property. Schedule "F" attached hereto lists all
Real Properties owned by Chem-Con and its Subsidiaries.
Chem-Con and its Subsidiaries have good and marketable
title in fee simple to all of the respective Real
Property owned by them, free and clear of any and all
Liens, except for Permitted Encumbrances, and have
access thereto such as is reasonable to permit the
present or presently proposed use of any such
properties. Schedule "F" indicates which of the
properties listed is covered by a title insurance
policy and a description of each such title insurance
policy is set forth on Schedule "F". The Real Property
owned by Chem-Con and its Subsidiaries contains no
encroachments on abutting property, public or private,
and no material encroachments by others on either of
their properties. Chem-Con and its Subsidiaries,
whichever is applicable, owns all of the Mineral Rights
under the Real Property owned by them.
4.7.3 Leases. Schedule "F" sets forth a true and complete
list of each lease of real or personal property
executed by or binding upon Chem-Con or its
Subsidiaries, as lessee, sublessee, tenant or assignee
setting forth in each case a brief description of the
property covered by the lease, the rental and the terms
thereunder. Each lease is in full force and effect,
without any default or breach thereof by any party
thereto. No consent of any landlord, lessor or any
other party is required under any such lease to keep
such lease in full force and effect without being
terminable or in default after the execution and
delivery of this Agreement and consummation of the
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transactions contemplated by this Agreement. True and
complete copies of all leases required to be listed on
Schedule "F", including all amendments, addenda,
waivers and all other binding documents, have
heretofore been delivered to Perma-Fix.
4.7.4 Notice. Except as set forth on Schedule "F", none of
Chem-Con or any of its Subsidiaries, any of the
Sullivan Trusts nor any of the Sullivans has received
actual or constructive notice of any violation of any
zoning, use, occupancy, building, or environmental
statute, ordinance, regulation, order, or other law or
requirement affecting or relating to any activities
performed at any time on any Real Property. None of
the Sullivan Trusts, the Sullivans, Chem-Con nor any of
the Subsidiaries of Chem-Con has any knowledge of any
past, present, or future events, conditions,
circumstances, activities, incidents, actions, or plans
that may in any way interfere with or limit the
continued use of said Real Property for all present or
presently proposed use of said Real Property.
4.7.5 Personal Property. Chem-Con and its Subsidiaries own
the full right and interest and have good and
marketable title in and to all material personal and
intangible property used by Chem-Con and its
Subsidiaries in the conduct of Chem-Con's and its
Subsidiaries' business and none of such personal and
intangible property is subject (i) to any contracts of
sale, or (ii) to any Liens, except for Permitted
Encumbrances.
4.7.6 Notice from Insurance Carrier. None of the Sullivans,
the Sullivan Trusts, Chem-Con nor its Subsidiaries has
received any notice of, or writing referring to, any
requirements or recommendations by any insurance
company which has issued a policy covering any part of
the Real Property requiring or recommending any repairs
or work or other action being taken on any part of the
Real Property, except as otherwise disclosed in
Schedule "F". All utilities required for the operation
of the Real Property in the manner currently operated
by Chem-Con or its Subsidiaries are installed and
operating, and all installation and connection charges
have been paid in full or provided for.
4.8 Intellectual Property.
4.8.1 Ownership. Schedule "K" attached hereto is a true and
complete list of all patents, trademarks, trade names,
service marks, copyrights, web domain addresses, mask
works, any applications for and registrations of such
patents, trademarks, trade names, service marks,
copyrights, mask works, web domain addresses, and all
processes, formulae, methods, schematics, technology,
<PAGE>
know-how, computer software programs or applications
and tangible or intangible proprietary information or
material that Chem-Con or its Subsidiaries is licensed
or otherwise possesses legally enforceable rights to
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<PAGE>
use and are necessary to conduct the business of Chem-
Con or its Subsidiaries as currently conducted, or
planned to be conducted, the absence of which would be
reasonably likely to have a material adverse effect
upon Chem-Con or its Subsidiaries (the "Chem-Con
Intellectual Property Rights"). None of the Chem-Con
Intellectual Property Rights is subject to any
outstanding order, judgment, decree, stipulation, or
agreement restricting the use of such Chem-Con
Intellectual Property Rights, and to the best of their
knowledge none infringes on, or is being infringed by,
other intellectual property rights of any other person
or entity. Chem-Con and its Subsidiaries have
promulgated and used commercially reasonable efforts to
enforce and maintain any reasonably necessary trade
secret or confidentiality measures regarding the Chem-
Con Intellectual Property Rights. Neither Chem-Con nor
its Subsidiaries has given or is bound by an agreement
or indemnification regarding Chem-Con Intellectual
Property Rights in connection with any property or
service produced, used or sold by Chem-Con or its
Subsidiaries.
4.8.2 No Breach of License. None of the ALS Trust, Chem-Con
nor its Subsidiaries is, or will as a result of the
execution and delivery of this Agreement or the
performance of their respective obligations under this
Agreement or otherwise be, in breach of any license,
sublicense or other agreement relating to the Chem-Con
Intellectual Property Rights, or any material licenses,
sublicenses and other agreements as to which Chem-Con
or its Subsidiaries is a party and pursuant to which
Chem-Con or its Subsidiaries is authorized to use any
third party patents, trademarks or copyrights ("Chem-
Con Third Party Intellectual Property Rights"),
including software which is used in the manufacture of,
incorporated in, or forms a part of any product sold or
services rendered by or expected to be sold or services
rendered by Chem-Con or its Subsidiaries, the breach of
which would be reasonably likely to have a material
adverse effect upon Chem-Con or its Subsidiaries,
except as disclosed in Schedule "K" hereof.
4.8.3 Year 2000 Issues. Schedule "S" hereof identifies each
"Year 2000" audit, report or investigation that has
been performed by or on behalf of Chem-Con and its
Subsidiaries with respect to their business and
operations, and Chem-Con has provided to Perma-Fix true
and correct copies of all such audits, reports or
investigations. Except as set forth in such audits,
reports and investigations, neither the Sullivans, the
Sullivan Trusts nor Chem-Con or its Subsidiaries are
aware of any failure to be Year 2000 Compliant of (i)
any software products sold or licensed by Chem-Con or
its Subsidiaries to third parties or (ii) any computer
software products used by or licensed to Chem-Con or
its Subsidiaries from third parties for internal use by
Chem-Con or its Subsidiaries. For purposes of this
Agreement, "Year 2000 Compliant" means, with respect to
each software product referred to in the prior
sentence, that such system (i) will accurately receive,
record, store, provide, recognize and process all date
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and time data from, during, into and between the
twentieth and twenty-first centuries; (ii) will
accurately perform all date-dependent calculations and
operations (including, without limitation, mathematical
operations, sorting, comparing and reporting) from,
during, into and between the twentieth and twenty-first
centuries; and (iii) will not malfunction, cease to
function or provide invalid or incorrect results as a
result of (x) the change of century, (y) date data,
including date data which represents or references
different centuries or more than one century or (z) the
occurrence of any particular date; in each case without
human intervention, other than original data entry;
provided, in each case, that all applications, hardware
and other systems used in conjunction with such system
which are not owned or licensed by Chem-Con or its
Subsidiaries correctly exchange date data with or
provide data to such system. Neither Chem-Con nor its
Subsidiaries has provided any guarantee or warranty
for any product sold or licensed, or services provided,
by Chem-Con or its Subsidiaries to the effect that such
product or service (i) complies with or accounts for
the fact of the arrival of the year 2000 or (ii) will
not be adversely affected with respect to
functionality, operability, performance or volume
capacity (including without limitation the processing
and reporting of data) by virtue of the arrival of the
year 2000. Chem-Con and its Subsidiaries have
performed audits regarding their primary suppliers,
customers, creditors and financial service
organizations with which they have substantial
interaction ("Outside Persons") and have determined
that all of these Outside Persons are substantially
Year 2000 Compliant to the extent that there will be no
material adverse effects to Chem-Con or its
Subsidiaries resulting from a failure of such Outside
Persons to be Year 2000 Compliant. In addition,
Schedule "S" shall set forth in detail the status of
Chem-Con and its Subsidiaries' efforts to address the
Year 2000 issues involving Chem-Con and its
Subsidiaries and such Outside Persons.
4.9 Agreements, Contracts and Commitments.
4.9.1 Contracts. Except as set forth on Schedule "G",
neither Chem-Con nor its Subsidiaries is a party to or
bound by:
4.9.1.1 any collective bargaining agreements or any
agreements that contain any severance pay
liabilities or obligations;
4.9.1.2 any bonus, deferred compensation, pension,
profit-sharing or retirement plans, programs
or other similar employee benefit
arrangements;
4.9.1.3 any employment agreement, contract or
commitment with an employee;
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4.9.1.4 any agreement of guaranty or indemnification
running from Chem-Con or its Subsidiaries to
any person or entity, including, but not
limited to, any Affiliate, other than
guarantees or indemnifications issued in the
ordinary course of Chem-Con's business
relating solely to the indemnification of
certain of its customers due to Chem-Con's
disposal of waste generated by such customers
at permitted disposal facilities not
affiliated with Chem-Con;
4.9.1.5 any agreement, contract or commitment which
would reasonably be expected to have a
material adverse impact on the business of
Chem-Con or its Subsidiaries;
4.9.1.6 any agreement, indenture or other instrument
which contains restrictions with respect to
payment of dividends or any other distribution
in respect of Chem-Con or its Subsidiaries or
any other outstanding securities of Chem-Con
or its Subsidiaries;
4.9.1.7 any agreement, contract or commitment
containing any covenant limiting the freedom
of Chem-Con or its Subsidiaries to engage in
any line of business or compete with any
person;
4.9.1.8 any agreement, contract or commitment relating
to capital expenditures in excess of ten
thousand dollars ($10,000.00) and involving
future payments;
4.9.1.9 any agreement, contract or commitment relating
to the acquisition of assets or capital stock
of any business enterprise;
4.9.1.10 any contract with the Department of
Defense or any other department or agency
of the United States Government, or to
any subcontract under any such contract,
which is subject to renegotiation under
the Renegotiation Act of 1951, as
amended; or
4.9.1.11 any agreement, contract or commitment not
made in the ordinary course of business
which involves Ten Thousand Dollars
($10,000) or more or has a remaining term
of one (1) year or more from December 31,
1998, or is not cancelable on thirty (30)
days or less notice without penalty.
Neither Chem-Con nor its Subsidiaries has
breached, and there is not any claim, or,
to the best of Chem-Con's or the
Sullivans or the Sullivan Trusts'
knowledge, any claim that Chem-Con or its
Subsidiaries have breached any of the
terms or conditions of any agreement,
contract or commitment set forth in this
Agreement or in any of the Schedules
attached hereto or of any other
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agreement, contract or commitment, if any
such breach or breaches in the aggregate
could result in the imposition of damages
or the loss of benefits in an amount or
of a kind material to Chem-Con or its
Subsidiaries.
4.9.2 Written List. Attached hereto as Schedule "H" is a
written list of all contracts, leases, agreements and
instruments which are in any single case of material
importance to the conduct of the business of Chem-Con
or its Subsidiaries, together with true and correct
copies of each document requested by Perma-Fix and a
written description of each oral arrangement so listed.
Without limiting the generality of the foregoing, the
aforesaid list includes all the contracts, agreements
and instruments of the following types to which Chem-
Con or its Subsidiaries is a party, or by which it is
bound (without regard to whether such contracts,
agreements and instruments are material):
4.9.2.1 leases of, and contracts for, the purchase or
sale of Real Property;
4.9.2.2 labor union contracts together with a list of
all labor unions representing or, to their
best knowledge, attempting to represent
employees of Chem-Con or its Subsidiaries;
4.9.2.3 pension, retirement, profit-sharing, bonus,
stock purchase, stock option, hospitalization
or insurance plans (and certificates or other
documents issued thereunder) or vacation pay,
severance pay and other similar benefit
arrangements for officers, directors,
employees or agents;
4.9.2.4 employment contracts or agreements, contracts
with other persons engaged in sales or service
activities, advertising contracts and
brokering contracts, which are not terminable
by Chem-Con or its Subsidiaries without
liability upon termination notice of thirty
(30) days or less;
4.9.2.5 written or oral agreements, understandings and
arrangements with officers, directors,
employees, shareholders, agents, or Affiliates
of Chem-Con or its Subsidiaries, the Sullivans
or the Sullivan Trusts relating to present or
future compensation of, or other benefits
available to, such persons;
4.9.2.6 contracts, and other arrangements of any kind,
whether oral or written, with any director,
officer, employee, trustee, stockholder or
Affiliate of Chem-Con or its Subsidiaries, the
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Sullivans or the Sullivan Trusts or to which
any director, officer, employee or Affiliate
of Chem-Con or any of its Subsidiaries is a
party;
4.9.2.7 contracts, purchase orders and other
arrangements of any nature involving an
expenditure of Five Thousand Dollars
($5,000.00) or more not made in the ordinary
course of business or which involve an
unperformed commitment, under contracts not
otherwise disclosed hereunder, in excess of
Twenty-Five Thousand Dollars ($25,000.00); and
4.9.2.8 indentures, loan agreements, notes, mortgages,
conditional sales contracts, and other
agreements for financing.
4.10 No Breach of Statute or Contract; Governmental Authorizations.
4.10.1 No Violation. Neither the execution and delivery of
this Agreement by Chem-Con, the Sullivans or the
Sullivan Trusts nor the performance or compliance by
the Chem-Con or its Subsidiaries, the Sullivans or the
Sullivan Trusts with any of the terms and provisions of
this Agreement will violate any Laws of any
governmental agency or authority, domestic or foreign,
or will at the Closing conflict with or result in a
breach of any of the terms, conditions or provisions of
any judgment, order, injunction, decree or ruling of
any court or governmental agency or authority, domestic
or foreign, to which any of Chem-Con or its
Subsidiaries, the Sullivans or the Sullivan Trusts may
be subject to, or bound by, or of any agreement or
instrument to which Chem-Con or its Subsidiaries, the
Sullivans or the Sullivan Trusts is a party or by which
any of them is bound, or constitute a default
thereunder, or result in the creation of any Liens upon
the Chem-Con Common Stock or any of the property or
assets of Chem-Con or its Subsidiaries, or cause any
acceleration of maturity of any obligation or loan, or
give to others any interest or rights, including rights
of termination or cancellation, in or with respect to
any of the properties, assets, agreements, contracts,
or business of Chem-Con or its Subsidiaries, the
Sullivans or the Sullivan Trusts or cause any
acceleration or termination or cancellation, in or with
respect to any of the properties, assets, agreements,
contracts or business of Chem-Con or its Subsidiaries,
the Sullivans or the Sullivan Trusts.
4.10.2 Permits and Licenses. Schedule "I" attached hereto is
a true and complete list of all permits, licenses and
franchises presently held by, or used in connection
with, the normal and ordinary business of Chem-Con or
its Subsidiaries and all applications for any of the
foregoing filed by Chem-Con or its Subsidiaries, the
Sullivans or the Sullivan Trusts relating to the
business of Chem-Con or its Subsidiaries with any
Governmental Authority. All permits, licenses and
franchises used by Chem-Con or its Subsidiaries to
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conduct Chem-Con's or its Subsidiaries' business are in
the name of Chem-Con or its Subsidiaries and none are
in the name of any other party.
4.10.3 Reports. Schedule "I" is a true and complete list of
all reports made by, or with respect to Chem-Con or its
Subsidiaries, the Sullivans or the Sullivan Trusts
since September 30, 1998, except as otherwise furnished
pursuant to this Agreement, to or from the Federal
Trade Commission ("FTC"), Environmental Protection
Agency ("EPA"), Equal Employment Opportunity Commission
("EEOC"), reports under the Occupational Safety and
Health Act ("OSHA"), the Department of Labor, Florida
Department of Environmental Protection, Georgia
Department of Natural Resources, all other state or
federal government agencies or departments, and tax
returns to, tax rulings from, and tax audit reports
from the IRS, relating in any manner to the business of
Chem-Con or its Subsidiaries.
4.10.4 Violation of Law and Contamination of Real Property.
Except as disclosed in Schedule "I", none of Chem-Con
or its Subsidiaries, the Sullivans nor the Sullivan
Trusts is in violation of any Laws, (including, but not
limited to, Environmental Laws) which violation might
have a material adverse effect on Chem-Con or its
Subsidiaries or the business of Chem-Con or its
Subsidiaries or the financial condition or operations
of Chem-Con or its Subsidiaries, and none of the Real
Property owned or leased by Chem-Con and/or its
Subsidiaries is contaminated or requires remediation of
any kind as a result of being contaminated.
4.10.5 Permits under Environmental Laws. Chem-Con and its
Subsidiaries have obtained, presently holds and has
adhered to all permits, licenses, and other
authorizations required under federal, state, and local
laws (including, but not limited to, any and all
Environmental Laws), (i) which are necessary for, or
material to, the conduct of Chem-Con's business or its
Subsidiaries' business as such businesses are currently
being operated, including, but not limited to, any and
all permits and licenses required under the
Environmental Laws for Chem-Con and its Subsidiaries to
conduct Chem-Con's business or its Subsidiaries'
business as currently conducted, and (ii) such other
permits, licenses and other authorizations relating to
pollution or protection of the environment, including,
without limitation, laws relating to emissions,
discharges, releases or threatened releases of
pollutants, contaminants (chemicals or industrial or
toxic wastes into the environment including, without
limitation, ambient air, surface waste, groundwater,
soil or land), or otherwise relating to the
manufacture, processing, recycling, reclamation,
distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants,
chemicals, petroleum products, or industrial or solid
or toxic wastes or radioactive materials, except as
disclosed in Schedule I attached hereto. Chem-Con and
its Subsidiaries are in compliance with all terms and
conditions of all such required permits, licenses and
other authorizations, and with all other limitations,
restrictions, conditions, standards, prohibitions,
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requirements, obligations, schedules, and timetables
contained in such Environmental Laws, except as
disclosed in Schedule I attached hereto. None of Chem-
Con or its Subsidiaries, the Sullivans nor the Sullivan
Trusts after due inquiry, has any knowledge of any
past, present, or future events, actions, or plans that
may interfere with or prevent full compliance or
continued full compliance as described above, or that
may give rise to any common law or legal liability or
otherwise form the basis of any claim, action, demand,
suit, proceeding, hearing, study, or investigation
related to the manufacture, processing, recycling,
reclamation, distribution, use, treatment, storage,
disposal, transport or threatened release of, any
pollutant, contaminant, chemical or industrial or solid
or toxic waste or radioactive materials.
4.10.6 Other Permits. Except as set forth in Schedule "I",
neither the execution and delivery of this Agreement
nor the consummation thereof will violate any of the
terms of any of the permits, licenses, approvals and
authorities held by Chem-Con or its Subsidiaries or
cause the termination or cancellation of any of the
permits, licenses, approvals and authorities held by
Chem-Con or its Subsidiaries. None of Chem-Con or its
Subsidiaries, the Sullivans nor the Sullivan Trusts has
received official notice that Chem-Con or its
Subsidiaries is in violation of any law, regulation,
ordinance or rule applicable to them or their
operations.
4.11 No Litigation or Adverse Effects. Except as set forth in
Schedule "J", there is no suit, action or legal,
administrative, arbitration, or other proceeding, or
governmental investigation, or any change in the zoning, use,
occupancy or building ordinances affecting the real property
or any leasehold interests of Chem-Con or its Subsidiaries
pending or, to the best of their knowledge threatened, which
could adversely affect the financial condition, results of
operations or business, assets or properties of Chem-Con or
its Subsidiaries, or the conduct of business of Chem-Con or
its Subsidiaries. Further, there is no suit, action or legal,
administrative, arbitration, governmental investigation or
other proceeding against Chem-Con or its Subsidiaries, or to
the best of their knowledge threatened, involving any claims
based upon negligence, product warranties, product liability
or any other type of claim (including, but not limited to,
those arising under any Environmental Laws) exceeding
potential liability (including costs of defense and attorneys'
fees), whether or not covered by insurance, in an amount in
excess of Ten Thousand Dollars ($10,000.00) with respect to
the individual suit, action, proceeding or investigation, or
potential liability (including costs of defense and attorneys'
fees) of Twenty-Five Thousand Dollars ($25,000.00) in the
aggregate of all such suits, actions, proceedings or
investigations, except (a) workers' compensation, automobile
accident and other routine claims wholly covered by existing
insurance (including costs of defense and attorneys' fees) and
(b) as set forth in Schedule "J" hereto.
4.12 Authorization, Execution and Delivery of Agreement. Each of
Chem-Con, the Sullivans and the Sullivan Trusts has the power,
authority and capacity to enter into this Agreement and to
carry out the transactions contemplated hereby. The
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execution, delivery and the performance of this Agreement by
Chem-Con, the Sullivans and the Sullivan Trusts have been duly
and validly authorized and approved by all requisite corporate
action on the part of Chem-Con and all requisite action of the
trustees under the Sullivan Trusts, and this Agreement
constitutes the valid and binding agreement and obligation of
Chem-Con, the Sullivans and the Sullivan Trusts enforceable in
accordance with its terms, subject to bankruptcy, insolvency
and other laws of similar import.
4.13 Ability to Conduct the Business. None of Chem-Con, its
Subsidiaries, the Sullivans nor the Sullivan Trusts is subject
to, or bound by, any judgment, order, writ, injunction or
decree of any court or of any governmental body or agency or
of any arbitrator which could prevent the execution, delivery
or performance of this Agreement or the use by Chem-Con or its
Subsidiaries of assets owned, leased or used by Chem-Con or
its Subsidiaries, or the conduct of Chem-Con or its
Subsidiaries's business, as presently conducted by Chem-Con or
its Subsidiaries, in accordance with present practices, after
the Closing. None of Chem-Con or its Subsidiaries, the
Sullivans nor the Sullivan Trusts is a party to, bound by, or
a beneficiary of, any agreement which could prevent the use of
assets material to Chem-Con or its Subsidiaries or the conduct
of business as currently conducted by Chem-Con or its
Subsidiaries in each case after the Closing.
4.14 Disclosure. No representation or warranty by Chem-Con, the
Sullivans or the Sullivan Trusts contained in this Agreement
and no statement contained in any certificate, list,
disclosure schedule, exhibit or other instrument furnished, or
to be furnished, to Perma-Fix pursuant hereto, contains or
will contain any untrue statement of a material fact or omits,
or will omit, to state a material fact necessary to make the
statements contained therein not misleading.
4.15 Broker's or Finder's Fee. No agent, broker, person or firm
acting on behalf of Chem-Con, the Sullivans and/or the
Sullivan Trusts or under the authority of Chem-Con, the
Sullivans and/or the Sullivan Trusts is or will be entitled to
any commission or broker's or finder's fee from any of the
parties hereto in connection with this Agreement or any of the
transactions contemplated herein, except the Sullivans have
retained WHCA Partners as an agent or firm acting on behalf of
the Sullivans and the Sullivan Trusts in connection with this
Agreement and the transactions contemplated herein. The
Sullivans and the Sullivan Trusts shall pay to WHCA Partners
any and all fees and other renumeration due to WHCA Partners
in connection with this Agreement and the transactions
contemplated by this Agreement. Chem-Con shall pay any
expenses due to WHCA Partners for work performed by WHCA
Partners on behalf of Chem-Con prior to November 5, 1998;
provided however, Chem-Con shall not pay any commissions or
fees due to WHCA Partners in connection with this Agreement or
the transactions contemplated by this Agreement.
<PAGE>
4.16 Insurance. Chem-Con and its Subsidiaries have in full force
and effect policies of insurance of the types, including
insurance policies under which Chem-Con, its Subsidiaries and
Chem-Con's or its Subsidiaries' officers, directors and
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Affiliates or any of them, in such capacity, is named insured,
and in the amounts and with insurance carriers as set forth in
Schedule "L" attached hereto, and will continue all of such
insurance in full force and effect up to and until the
Closing. The amounts and types of such insurance policies and
the insurance carriers issuing such policies fully meet Chem-
Con's and its Subsidiaries' contractual, legal or regulatory
commitments and are fully adequate to insure against risks to
which Chem-Con or its Subsidiaries is normally exposed in the
operation of its businesses and as required by Governmental
Authority and the Environmental Laws.
4.17 Completeness of Documents -- Chem-Con and CCC. The copies of
the Articles of Incorporation and Bylaws of Chem-Con and CCC,
and of all leases, instruments, agreements or other documents
(including all Schedules and documents delivered pursuant to
this Agreement) which have been or will be delivered to Perma-
Fix pursuant to the terms of this Agreement or in connection
with the transactions contemplated hereby, are, or if not now
delivered, will when delivered, be true, complete and correct.
4.18 Completeness of Documents -- Sullivan Trusts. The copies of
the organizational documents of the Sullivan Trusts, which
have been or will be delivered to Perma-Fix pursuant to the
terms of this Agreement or in connection with the transactions
contemplated hereby, are, or if not now delivered, will when
delivered, be true, complete and correct.
4.19 Disposition of Assets. Since September 30, 1998, neither
Chem-Con nor its Subsidiaries have made any sale or other
disposition of any of their properties or assets or
surrendered any of their rights with respect thereto, or made
any additions to their properties or assets, or entered into
any agreements, or entered into any other transaction, except
in each instance in the ordinary course of business or as set
forth in Schedule "M" attached hereto, and no such sale,
disposition, surrender, addition, agreement or transaction set
forth in such Schedule "M" has any material adverse effect
upon the results of operations or financial condition of Chem-
Con or its Subsidiaries or Chem-Con's or its Subsidiaries'
ability to conduct Chem-Con's and its Subsidiaries' business
as currently conducted.
4.20 Obligations to Employees. All obligations of Chem-Con and/or
any of its Affiliates, whether arising by operation of law,
contract, agreement, or otherwise, for payments to trusts or
other funds or to any governmental agency or to any employees,
directors, officers, agents, or any other individual (or any
of their respective heirs, legatees, beneficiaries, or legal
representatives) with respect to profit-sharing, pension or
retirement benefits, or any other employee benefit of any kind
whatsoever relating to Chem-Con, its Subsidiaries or any of
their employees, have been paid. All legally enforceable
obligations of Chem-Con or its Subsidiaries, whether arising
by operation of law, contract, agreement, or otherwise, for
bonuses or other forms of compensation or benefits which are,
or may become, payable to its employees, directors, officers,
agents, or any other individual (or their respective heirs,
legatees, beneficiaries or legal representative) relating to
Chem-Con or its Subsidiaries or any of the employees of Chem-
Con or its Subsidiaries with respect to periods ending on or
before the Closing have been paid, or adequate accruals for
payment thereof are reflected on the Audited Financial
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Statements. Neither Chem-Con nor any of its Affiliates has
any accumulated funding deficiencies, as such term is defined
in the Employee Retirement Income Security Act of 1974
("ERISA") and in the Code with respect to any employee benefit
plan as defined in ERISA maintained or established for
employees of Chem-Con or its Subsidiaries. Neither Chem-Con
nor its Subsidiaries has incurred any liability to the Pension
Benefit Guaranty Corporation ("PBGC") other than for the
payment of insurance premiums all of which have been paid when
due, the IRS or the Department of Labor ("DOL") with respect
to any such employee benefit plan that affects, or might
affect Chem-Con, and does not have any withdrawal liability
with respect to any multiemployer pension plan ("Multiemployer
Plan") which is subject to the Multiemployer Pension Plan
Amendments Act of 1980. The consummation of this Agreement
will not result in either a complete or partial withdrawal
from any of the Multiemployer Plans. All of the employee
benefit plans of which Chem-Con or any Affiliate of Chem-Con
is the plan sponsor relating to Chem-Con and its Subsidiaries
or any of their employees have been amended as, when and to
the extent necessary to comply with and qualify under the
applicable provisions of the Code; and all such employee
benefit plans have been administered in accordance with the
applicable provisions of the Code and ERISA. Except as
indicated on Schedule "N", any employee benefit plans relating
to Chem-Con or its Subsidiaries or any of their employees
which are pension benefit plans have received, or have applied
for and expect to receive, determination letters from the IRS
to the effect that such plans are qualified and exempt from
federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, and, no amendments have been made to any such
employee benefit plans other than those covered by such
determination letters or applications for such determination
letters with respect to such amendments which have been timely
filed with the IRS. No determination letter received with
respect to any employee benefit plan relating to Chem-Con or
its Subsidiaries or any of their employees has been revoked
nor has revocation been threatened. Each of the employee
benefit plans have been administered at all times and in all
respects in accordance with their respective terms. There are
no pending investigations by any Governmental Authority
involving any employee benefit plans relating to Chem-Con or
its Subsidiaries or any of their employees, no deficiency or
termination proceedings involving such employee benefit plans,
and no threatened or pending claims (except for claims for
benefits payable in the normal operation of the employee
benefit plans), suits or proceedings against any such
employee benefit plan or asserting any rights or claims to
benefits under any such employee benefit plan nor are there
any facts which could give rise to any liability in the event
of any such investigation, claim, suit or proceeding. Neither
the employee benefit plans nor any trusts created thereunder
relating to Chem-Con or its Subsidiaries or to any of their
employees, nor any trustee, administrator or other fiduciary
thereof, has engaged in a "prohibited transaction" (as such
term is defined in Section 4975 of the Code or Section 406 of the
ERISA); and has not experienced any reportable event within the
meaning of ERISA or other event or condition which presents a
material risk of termination of any such employee benefit plan
by the PBGC, has had any tax imposed upon it by the IRS for
any alleged violation under Section 4975 of the Code, or has engaged
in any transaction which might subject Chem-Con or its
Subsidiaries or any such employee benefit plan to any
liability for such tax. The terms of any such employee
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benefit plans comply with ERISA and the Code in all respects,
and, any and all reporting and disclosure requirements of
ERISA or the Code and the DOL with respect to any such
employee benefit plan have been timely met. The information
supplied to the actuary by Chem-Con or its Subsidiaries, the
Sullivans or the Sullivan Trusts for use in preparing those
reports was complete and accurate and none of Chem-Con, the
Sullivans nor the Sullivan Trusts has reason to believe that
the conclusions expressed in such reports are incorrect. In
the event of termination of any employee benefit plan of Chem-
Con or any of its Affiliates relating to Chem-Con or its
Subsidiaries or to any of their employees, there will be no
liability of Chem-Con or its Subsidiaries or the plan with
respect to the providing of benefits accrued thereunder
subject to future variations in levels of compensation
assuming continued investment returns at rates actuarially
predicted. Further, if termination (whether complete or
partial) of any plan has occurred, then, all liabilities with
respect thereto have been satisfied in full and no present
liability exists with respect to any such prior termination.
Schedule "N" also includes a list of any and all pension or
benefit obligations of Chem-Con and/or its Affiliates which
have not been fully funded.
4.21 Condition of Plant, Machinery and Equipment. Except as set
forth on Schedule "O", all of the items of the property, plant
and equipment owned, operated or leased by Chem-Con or its
Subsidiaries are, in all material respects, in good condition
and repair, reasonable wear and tear excepted, and Chem-Con
and its Subsidiaries agree to maintain such items in good
operating condition until the Closing. Casualty losses to
such property, plant and equipment are covered by insurance
with normal industry deductibles being applicable.
4.22 Books of Account. Chem-Con has maintained its books of
account in accordance with GAAP, applied on a consistent basis
with prior periods.
4.23 Stock Redemptions. There are no shares of Chem-Con Common
Stock which are subject to redemption or purchase in lieu of
redemption, which prior to September 30, 1998, were not paid
for in full. From September 30, 1998, through the date of
this Agreement, Chem-Con has not purchased or redeemed or
entered into any agreement to purchase or redeem any Chem-Con
Common Stock.
4.24 Minute Books. Chem-Con and its Subsidiaries have maintained
their corporate minute books and all such books are current.
4.25 Indebtedness of Shareholders, etc. Except as set forth on
Schedule "P", none of the shareholders, Affiliates, officers,
directors or employees of Chem-Con is (i) indebted to Chem-Con
or its Subsidiaries, and neither Chem-Con nor its Subsidiaries
is indebted to their Affiliates, shareholders or any of their
officers, directors or employees, (ii) a party to or has any
interest in a material contract, agreement or lease with Chem-
Con or its Subsidiaries or in which Chem-Con or its
Subsidiaries is a party to or bound by, or (iii) a customer or
supplier of Chem-Con or its Subsidiaries, which during any one
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of the preceding three (3) years supplied to or purchased from
Chem-Con or its Subsidiaries a amount of property or services
exceeding Ten Thousand Dollars ($10,000.00) in any one (1)
year.
4.26 Business Prospects. Since September 30, 1998, there has not
occurred any event or other occurrence which might have a
material adverse effect on the business or business prospects
of Chem-Con or its Subsidiaries.
4.27 Bank Accounts; Powers of Attorney. Schedule "Q" attached
hereto sets forth each bank account and borrowing resolution
authorizing officers or agents of Chem-Con or its Subsidiaries
to borrow money and lists the persons authorized to transact
business on behalf of Chem-Con or its Subsidiaries with
respect to each such account or borrowing resolution.
Schedule "Q" also lists all powers of attorney granted by
Chem-Con or its Subsidiaries to any other person.
4.28 Sensitive Payments. Neither Chem-Con nor its Subsidiaries has
made or received, and to their best knowledge, after
reasonable due inquiry, none of their officers, directors,
employees, agents, shareholders or other representative of
Chem-Con or its Subsidiaries or any person acting on behalf of
Chem-Con or its Subsidiaries, has made or received, directly
or indirectly, any bribes, kickbacks, illegal political
contributions with corporate funds, improper payments from
corporate funds that are falsely recorded on the books and
records of Chem-Con, payments to governmental officials in
their individual capacities or illegal payments from corporate
funds to obtain or retain business.
ARTICLE 5
ADDITIONAL REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE SULLIVANS AND THE SULLIVAN TRUSTS
______________________________________________________
The Sullivans and the Sullivan Trusts, jointly and severally,
provide to Perma-Fix the following additional representations,
warranties and covenants:
5.1 Purchase for Investment. The ALS Trust is acquiring the
Perma-Fix Common Stock to be issued by Perma-Fix pursuant to
the terms of this Agreement for the ALS Trust's own account,
to hold for investment, with no present intention of dividing
the ALS Trust's participation with others or reselling or
otherwise participating, directly or indirectly, in a
distribution thereof, and not with a view to or for sale in
connection with any distribution thereof, except pursuant to
a registration statement under the Securities Act and any
applicable state securities laws, or a transaction exempt from
registration thereunder, and shall not make any sale, transfer
or other disposition of such shares of Perma-Fix Common Stock
in violation of any applicable state securities laws,
including in each instance any applicable rules and
regulations promulgated thereunder, or in violation of the
Securities Act and the rules and regulations promulgated
thereunder by the SEC. The Sullivans and the Sullivan Trusts
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further represent and warrant that the ALS Trust is not
acquiring the shares of Perma-Fix Common Stock issuable under
this Agreement with a view to exercising control over
Perma-Fix, or merging or otherwise combining Perma-Fix with
any other person.
5.2 No Registration of Perma-Fix Common Stock. The Sullivans and
the Sullivan Trusts have been advised that the shares of
Perma-Fix Common Stock issued or issuable hereunder are not
being registered under any state securities laws on the ground
that the issuance thereof is exempt from registration, and are
not being registered under the Securities Act on the ground
that this transaction is exempt from registration under
Section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act ("Regulation D") and that
reliance by Perma-Fix on such exemptions is predicated in part
on the Sullivans' and the Sullivans Trusts' representations as
set forth herein.
5.3 Resale of Shares. The Sullivans and the Sullivan Trusts agree
that Perma-Fix may refuse to permit the sale, transfer or
disposition of the shares of Perma-Fix Common Stock to be
issued to the ALS Trust under this Agreement unless there is
in effect a registration statement under the Securities Act
and any applicable state securities law covering such transfer
or the Sullivans and/or the Sullivan Trusts furnish an opinion
of counsel or other evidence, reasonably satisfactory to
counsel for Perma-Fix, to the effect that such registration is
not required.
5.4 Legend. The Sullivans and the Sullivan Trusts understand and
agree that stop transfer instructions will be given to Perma-
Fix's transfer agent and that there will be placed on the
certificate or certificates representing the Perma-Fix Common
Stock issuable under this Agreement, any substitutions
therefor and any certificates for additional shares which
might be distributed with respect to such Perma-Fix Common
Stock, a legend stating in substance:
"The shares represented by this certificate have
been acquired for investment and have not been
registered under the Securities Act of 1933, as
amended (the "Securities Act") in reliance on an
exemption contained in Section 4(2) of the Securities
Act and/or Regulation D promulgated under the
Securities Act. These shares may only be
transferred pursuant to an effective registration
statement under the Securities Act and any
applicable state securities laws unless there is
furnished to Perma-Fix an opinion of counsel or
other evidence satisfactory to Perma-Fix counsel,
to the effect that such registration is not
required. In addition, the shares represented by
this certificate may only be transferred in
accordance with the terms of a Stock Purchase
Agreement among Perma-Fix Environmental Services,
Inc. ("Perma-Fix"), Chemical Conservation
Corporation, Chemical Conservation of Georgia,
Inc., The Thomas P. Sullivan Living Trust, dated
September 6, 1978, The Ann L. Sullivan Living
Trust, dated September 6, 1978, Thomas P.
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Sullivan and Ann L. Sullivan, a copy of which
agreement may be inspected by the holder of this
certificate at the principal offices of Perma-
Fix, or furnished by Perma-Fix to the holder of
this certificate upon written request, without
charge."
5.5 Shares to be held Indefinitely. The Sullivans and the
Sullivan Trusts understand that under the Securities Act, the
shares of Perma-Fix Common Stock issued or to be issued under
this Agreement must be held indefinitely unless they are
subsequently registered under the Securities Act or unless an
exemption from such registration is available with respect to
any proposed transfer of disposition of the shares of
Perma-Fix Common Stock issued or to be issued under this
Agreement.
5.6 Periodic Reports-No Registration. The Sullivans and the
Sullivan Trusts understand that Perma-Fix is required to file
periodic reports with the SEC and that certain sales of the
shares of Perma-Fix Common Stock issued or to be issued under
this Agreement may be exempt from registration under the
Securities Act by virtue of Rule 144 as promulgated by the SEC
under the Securities Act, provided that such sales are made in
accordance with all of the terms and conditions of Rule 144,
including compliance with the required one (1) year holding
period. The Sullivans and the Sullivan Trusts further
understand that if Rule 144 is not available for sales of the
shares of Perma-Fix Common Stock issued or to be issued under
this Agreement, such shares may not be sold without
registration under the Securities Act or compliance with some
other exemption from such registration and that Perma-Fix is
under no obligation to register the shares of Perma-Fix Common
Stock issued or to be issued under this Agreement or take any
other action necessary in order to make compliance with an
exemption from registration available.
5.7 Public Solicitation. The Sullivans and the Sullivan Trusts
have received no public solicitation or advertisement
concerning an offer to sell the shares of Perma-Fix Common
Stock issued or to be issued under this Agreement.
5.8 SEC Filings. The Sullivans and the Sullivan Trusts have
received and had an opportunity to review copies of the
Perma-Fix SEC Filings (as defined in Section 7.4 hereof).
5.9 Total Assets of the ALS Trust; Knowledge of Purchaser's
Representatives. The ALS Trust has total assets in excess of
five million dollars ($5,000,000.00). Further, the ALS Trust
was not formed for the specific purpose of acquiring the
shares of Perma-Fix Common Stock issued or to be issued
hereunder. In addition, the ALS Trust has previously
appointed TPS as its purchaser's representative (as defined
under Rule 506 of Regulation D) and that the acquisition of
the Perma-Fix Common Stock pursuant to the terms of this
Agreement is directed by such purchaser's representative, TPS
is a sophisticated person who has such knowledge and
experience in financial and business matters that he is
individually capable of evaluating the merits and risks of the
purchase of the shares of Perma-Fix Common Stock under this
Agreement.
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5.10 Restrictions on Certain Actions. For a period of two (2)
years from the date of Closing, neither of the Sullivan Trusts
nor any of the Sullivans shall, without the prior consent of
the Board of Directors of Perma-Fix (specifically expressed in
a resolution adopted by a majority of the Board of Directors
of Perma-Fix who are not employees, representatives or agents
of the Sullivan Trusts and/or the Sullivans or any of their
Affiliates):
5.10.1 Prohibition Against Acquisition. Except for the shares
of Perma-Fix Common Stock which the Sullivan Trusts
acquire under this Agreement or through stock splits,
stock dividends or stock options granted by Perma-Fix
to TPS, acquire, offer or propose to acquire, or
permit any Affiliate of the Sullivan Trusts or any of
the Sullivans to acquire, directly or indirectly, or in
conjunction with or through any other person, firm,
corporation, entity, partnership, company or
association, by purchase or otherwise, beneficial
ownership of any shares of Perma-Fix Common Stock or
any other voting securities of Perma-Fix or any rights
or option to acquire voting securities of Perma-Fix or
any securities convertible into any voting securities
of Perma-Fix (collectively, "Perma-Fix Voting
Securities") except as otherwise agreed to in writing
by the President of Perma-Fix or approved by the Board
of Directors (or a committee of the Board of Directors)
of Perma-Fix. Notwithstanding anything in this Section
5.10.1 to the contrary, Michael F. Sullivan and Patrick
Sullivan, sons of TPS and ALS, may acquire shares of
Perma-Fix Common Stock;
5.10.2 Prohibition Against Solicitation. Directly or
indirectly, or through or in conjunction with any other
person, firm, corporation, entity, partnership, company
or association, solicit, or encourage any solicitation
of, or permit any Affiliate of the Sullivans or any of
the Sullivan Trusts to solicit, or encourage any
solicitation of, (i) proxies with respect to Perma-Fix
Voting Securities under any circumstances, or (ii)
tender or exchange offers for Perma-Fix Voting
Securities under any circumstances or (iii) any
election contest relating to the election of directors
of Perma-Fix; or
5.10.3 Prohibition Against Control. Take any action alone or
in concert with any other person, firm, corporation,
partnership, company or association to acquire or
affect the control of Perma-Fix or to influence the
management, board of directors or policies of Perma-
Fix, or, directly or indirectly, or encourage the
formation of, any group within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as
amended, seeking to obtain or take control of Perma-Fix
or to influence the management, board of directors
policies of Perma-Fix, except it is recognized that the
Sullivan Trusts have the right to select one (1)
nominee to the Board of Directors of Perma-Fix under
certain limited conditions.
5.11 Attendance. During the period that any of the Sullivans or
Sullivan Trusts is the beneficial owner of any shares of
Perma-Fix Common Stock acquired under this Agreement and the
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Chem-Met Agreement, the Sullivans and the Sullivan Trusts
shall, jointly and severally, cause all such shares of Perma-
Fix Common Stock which they beneficially own to be duly
represented, in person or by proxy, at each meeting of
stockholders of Perma-Fix.
5.12 Confidential Information; Non-Compete, and Non-Solicitation.
In order to induce Perma-Fix to enter into this Agreement and
the Chem-Met Agreement and as part of the sale of the goodwill
of Chem-Con and Chem-Met, TPS shall:
5.12.1 Confidentiality. For twenty-four (24) months following
the Closing Date, TPS shall hold in confidence and
shall not disclose, directly or indirectly, any and all
information, knowledge or data relating to all sales
and pricing information, customer lists, records,
memorandums, reports or other representations whether
in printed or machine readable form, technology,
proprietary process or intellectual property
("Confidential Information") relating to Chemical
Florida, Chemical Georgia, Chem-Met and/or any of their
subsidiaries or Affiliates, and their respective
businesses, which shall have been obtained by TPS prior
to the date of this Agreement as an executive officer
of Chemical Florida, Chemical Georgia or Chem-Met or in
any other capacity.
Notwithstanding the provisions of Section 5.12.1
hereof, TPS shall not be held liable for disclosure of
information which (i) was in the public domain or is
generally available to the public at the time of its
disclosure by TPS through means unrelated to TPS'
disclosure; or (ii) is disclosed with the written
approval of the Perma-Fix; or (iii) is required to be
disclosed by law.
5.12.2 Covenant Not to Compete. TPS shall not, for a period
of twelve (12) months after the Closing Date, in the
United States, directly or indirectly, by or for
himself, or as an agent, representative or employee of
another, or through others as their agent,
representative or employee or by and through any joint
venture, partnership, corporation, limited liability
company or other business entity in which TPS has a
direct or indirect interest, own, manage, operate,
control, or be engaged in any business that engages
directly or indirectly (i) in the treatment, storage,
recycling, disposal and/or transportation of hazardous
and/or non-hazardous, industrial and/or commercial
waste or (ii) in any other business that competes with
Chemical Florida, Chemical Georgia or Chem-Met or any
of their subsidiaries or Affiliates.
5.12.3 Agreement Not to Solicit Employees and Customers. TPS
shall not, for a period of twelve (12) months after the
Closing Date, directly or indirectly, by or for
himself, or as an agent, representative or employee of
another, or through others as their agent,
representative or employee, or by and through any joint
venture, partnership, corporation, limited liability
company or other business entity in which he has a
direct or indirect interest:
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5.12.3.1 use or disclose for the benefit of any
person or entity, other than Perma-Fix or
any of its subsidiaries, any customer
lists, or identify any of the customers
of Chem-Con, Chem-Met or any of their
subsidiaries or Affiliates; or,
5.12.3.2 solicit, induce or in any manner attempt
to solicit or induce, any customer or
supplier of Chem-Con, Chem-Met or any of
their subsidiaries or affiliates, to
cease being a supplier or customer of any
of Chem-Con, Chem-Met or any of their
subsidiaries or Affiliates; or
5.12.3.3 solicit or induce, or in any manner
attempt to solicit or induce, any person
employed by, or as an agent of, Chem-Con,
Chem-Met or any of their subsidiaries or
affiliates, to terminate his or her
employment or agency with Chem-Con,
Chem-Met or any of their subsidiaries or
Affiliates.
5.13 Specific Enforcement. The parties hereto recognize and agree
that, in the event any of the Sullivans or any of the Sullivan
Trusts breach or threaten to breach any of the provisions of
this Article 5, immediate irreparable injury would be caused
to Perma-Fix, for which there is no adequate remedy at law.
It is accordingly agreed that in the event of a failure by any
of the Sullivans or Sullivan Trusts to perform their
obligations under this Article 5, Perma-Fix shall be entitled
to specific performance through injunctive relief to prevent
breaches of any provision of this Article 5 and to
specifically enforce any provision of Article 5 and the terms
and provisions thereof in any action instituted in any court
of the United States or any state thereof having subject
matter jurisdiction, in addition to any other remedy to which
Perma-Fix may be entitled, at law or in equity.
ARTICLE 6
NO SOLICITATION OF TRANSACTIONS
_______________________________
6.1 No Solicitation of Transactions. Chem-Con, the Sullivans and
the Sullivan Trusts shall not, and will not allow any of their
employees, agents, representatives or Affiliates (including,
but not limited to any of Chem-Con's and/or Chem-Met's
officers, directors, employees, agents, representatives or
Affiliates), to (i) negotiate, sell, offer to sell or solicit
offers to purchase any of the assets of Chem-Con and/or Chem-
Met (other than sales of products in the ordinary course of
their businesses); (ii) negotiate, sell, offer to sell or
solicit offers to purchase or exchange, any capital stock of
Chem-Con, Chem-Met or any Subsidiary of Chem-Con or Chem-Met
to, from or with any other party (other than pursuant to the
terms of this Agreement and the Chem-Met Agreement) or enter
into any merger, consolidation, liquidation or similar
transaction involving, directly or indirectly, Chem-Con,
Chem-Met or any Subsidiary of Chem-Con or Chem-Met (other than
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pursuant to the terms of this Agreement and the Chem-Met
Agreement) and none of the Sullivans nor the Sullivan Trusts,
Chem-Con, Chem-Met nor any of their Affiliates will negotiate
with or provide financial, technical or other information to
any person (other than pursuant to the terms of this Agreement
and the Chem-Met Agreement) in connection with any such
proposed purchase or transaction; or, (iii) negotiate, sell,
offer to sell or solicit any offers to purchase any
outstanding shares of Chem-Con's and Chem-Met's capital stock
or any other securities of Chem-Con and Chem-Met (other than
pursuant to the terms of this Agreement and the Chem-Met
Agreement).
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PERMA-FIX
___________________________________________
Perma-Fix represents and warrants to the ALS Trust as
follows:
7.1 Organization, etc. Perma-Fix is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware. Perma-Fix has the corporate power to own
its property and to carry on its business as now being
conducted; Perma-Fix has the corporate power and authority to
execute and deliver this Agreement and, after obtaining
approvals from its lender, the Boston Stock Exchange ("BSE")
and the National Association of Securities Dealers, Inc.
("NASDAQ"), to issue the Perma-Fix Common Stock to be
delivered pursuant to Sections 3.1 and 3.2 hereof and
consummate the transactions contemplated hereby and the Chem-
Met Agreement, and to perform the transactions contemplated by
this Agreement.
7.2 Authorization, Execution and Delivery of Agreement. The
execution, delivery and performance of this Agreement by
Perma-Fix have been duly and validly authorized and approved
by the Board of Directors of Perma-Fix. This Agreement
constitutes the valid and binding agreement of Perma-Fix,
enforceable in accordance with its terms, subject to
bankruptcy, insolvency and other laws of similar import, and
Perma-Fix, has taken, or will use reasonable efforts to take
prior to the Closing, all other action required by law on the
part of Perma-Fix, and Perma-Fix's Certificate or Articles of
Incorporation and bylaws or otherwise to effect the
transactions contemplated by this Agreement.
7.3 Capital Stock of Perma-Fix. As of the date of this Agreement,
the authorized capital stock of Perma-Fix consists of (i)
5,287 shares of Preferred Stock, $.001 par value, of which
9,850 shares are outstanding as of the date hereof; and (ii)
50,000,000 shares of Perma-Fix Common Stock, of which
18,711,215 shares are issued and outstanding as of the date
hereof and 12,330,171 shares are reserved for issuance under
Perma-Fix's Stock Option Plans (such Plans being hereinafter
referred to as the "Perma-Fix Plans") and warrants or rights
to subscribe for or purchase from Perma-Fix any Perma-Fix
Common Stock.
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7.4 SEC Filings.
7.4.1 Perma-Fix has previously furnished Chem-Con, the
Sullivans and the Sullivan Trusts true and complete
copies of the following documents which have been filed
by Perma-Fix with the SEC pursuant to Sections 13(a), 14(a),
(b) or (c) or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") (such documents are
hereinafter collectively called the "Perma-Fix SEC
Filings"):
7.4.1.1 its Annual Report on Form 10-K for the year
ended December 31, 1998 (the "Form 10-K");
7.4.1.2 Form 8-K, Date of Report (date of earliest
event reported); April 8, 1999.
7.4.1.3 Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 (the "Form 10-Q").
The audited and unaudited financial statements
contained in the Perma-Fix SEC Filings, as amended,
present fairly the consolidated financial condition and
results of operations and changes in shareholders'
equity and changes in financial position of Perma-Fix
as of the dates and for the periods indicated, except
as may otherwise be stated in such financial
statements. For purposes of this Agreement, all
financial statements of Perma-Fix shall be deemed to
include any notes to such financial statements. The
financial statements described in this Section 7.4 are
hereinafter referred to as the "Perma-Fix Financial
Statements."
7.4.2 Material Adverse Change. Since December 31, 1998,
there has not been, occurred or arisen, which has not
been publicly disclosed to the shareholders of Perma-
Fix or contained in the Perma-Fix SEC Filings, as
amended:
7.4.2.1 any material adverse change in the
consolidated financial condition or in the
operations of the business of Perma-Fix and
its subsidiaries, taken as a whole, from that
shown on the Perma-Fix Financial Statements;
or
7.4.2.2 any event, condition or state of facts (other
than the general state of the national economy
and proposed federal legislation or
regulation) of any character which, to the
knowledge of Perma-Fix, materially and
adversely affects the results of operations or
business or financial condition or properties
of Perma-Fix and its subsidiaries, taken as a
whole, except as otherwise disclosed in this
Section 7.4.
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7.5 Status of Perma-Fix Common Stock. The shares of Perma-Fix
Common Stock to be delivered pursuant to Article 3 hereof,
when so issued pursuant to this Agreement, will be duly and
validly authorized and issued, fully paid and nonassessable.
7.6 No Breach of Statute or Contract, Governmental Authorizations.
Subject to the National Association of Securities Dealers
("NASD"), the BSE and Perma-Fix's lender, neither the
execution and delivery of this Agreement by Perma-Fix, nor
compliance with the terms and provisions of this Agreement by
Perma-Fix will violate (i) any law, statute, rule or
regulation of any governmental authority, domestic or foreign,
or will at the Closing Date conflict with or result in a
breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree or ruling of any court or
governmental agency or authority to which Perma-Fix is
subject, which in the aggregate would have a material adverse
effect on Perma-Fix and its subsidiaries, taken as a whole, or
(ii) any agreement or instrument to which it is a party or by
which it is bound or constitute a default thereunder which
would have a material adverse effect on Perma-Fix and its
subsidiaries, taken as a whole, or (iii) result in the
creation of any Lien upon any property or assets of Perma-Fix
or cause any acceleration of maturity of any obligation or
loan which would have a material adverse effect on Perma-Fix
and its subsidiaries, taken as a whole, or (iv) give to others
any interest or rights, including rights of termination or
cancellation, in or with respect to any of the material
properties, assets, agreements, contracts or business of
Perma-Fix which would have a material adverse effect on Perma-
Fix and its subsidiaries, taken as a whole.
7.7 No Litigation or Adverse Events. Except as set forth in the
SEC Filings, copies of which have been or will be delivered to
Chem-Con, there is no suit, action, or legal, administrative,
arbitration or other proceeding or governmental investigation
pending, or to the best of the knowledge of Perma-Fix
threatened, which could materially and adversely affect the
financial condition and results of operations of Perma-Fix and
its Subsidiaries, taken as a whole.
7.8 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of Perma-Fix, or under its authority, is or
will be entitled to any commission or broker's or finder's fee
from any of the parties hereto in connection with any of the
transactions contemplated herein.
ARTICLE 8
COVENANTS OF CONDUCT AND TRANSACTIONS
PRIOR TO AND AFTER THE CLOSING
______________________________________
8.1 Investigations; Operation of Business of Chem-Con. Chem-Con,
the Sullivans and the Sullivan Trusts agree, jointly and
severally, between the date of this Agreement and the Closing:
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8.1.1 Access to Premises and Books. That Perma-Fix and its
representatives shall have full access to all their
premises and books and records relating to Chem-Con,
and shall cause Chem-Con to provide to Perma-Fix and
its representatives full access to their premises and
books and records, and to cause Chem-Con's officers to
furnish Perma-Fix with such financial and operating
data and other information with respect to the business
and properties of Chem-Con, as Perma-Fix shall from
time to time request; provided, however, that any such
investigation shall not affect any of the
representations, warranties or covenants of Chem-Con,
the Sullivans and/or the Sullivan Trusts hereunder;
and, provided further, that any such investigation
shall be conducted in such manner as not to interfere
unreasonably with the operation of the business of
Chem-Con. In the event of termination of this
Agreement, Perma-Fix will return to Chem-Con any and
all financial statements, agreements, documents,
memoranda or other repositories of information relating
to Chem-Con that Perma-Fix has obtained in connection
with its review, and Perma-Fix agrees that any written
information relating to Chem-Con and Chem-Con's
financial condition, business, operations and prospects
are strictly confidential and shall not be voluntarily
disclosed to any third party or used by Perma-Fix for
its benefit or the benefit of any other person, except
for such information or documents (i) available
generally to the public, (ii) in the possession of
Perma-Fix prior to its receipt under this Agreement,
(iii) obtained by Perma-Fix from a third party who has
an independent right to such information or documents,
or (iv) as otherwise required by law to be disclosed;
provided, however, that any confidentiality
requirements contained in this Section shall terminate
and be null and void twelve (12) months from the date
of this Agreement.
8.1.2 Business Organization of Chem-Con. To cause Chem-Con
and its Subsidiaries, to the extent required for
continued operation of Chem-Con's and its Subsidiaries'
business without impairment, to use Chem-Con's best
efforts to preserve substantially intact the business
organization of Chem-Con and its Subsidiaries to keep
available the services of the present officers and
employees of Chem-Con and its Subsidiaries, and to
preserve the present relationships of Chem-Con and its
Subsidiaries with persons having significant business
relations therewith such as suppliers, customers,
brokers, agents or otherwise.
8.1.3 Ordinary Course of Business. To cause Chem-Con to
conduct Chem-Con's and its Subsidiaries' businesses
only in the ordinary course and, by way of
amplification and not limitation, Chem-Con and its
Subsidiaries will not without the prior written consent
of Perma-Fix (except as otherwise specifically provided
in this Agreement):
8.1.3.1 issue any capital stock or make any changes to
its authorized, issued or outstanding capital
stock, grant any stock options or rights to
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acquire shares of any of its capital stock or
any security convertible into any class of its
capital stock or agree to do any of the
foregoing; or
8.1.3.2 declare, set aside, or pay any dividend or
distribution with respect to any of its
capital stock or any other securities
convertible into any class of capital stock;
or
8.1.3.3 directly or indirectly redeem, purchase or
otherwise acquire any of its capital stock or
enter into any agreement to purchase or redeem
any of the Chem-Con Common Stock; or
8.1.3.4 effect a split or reclassification of any of
its capital stock convertible into any class
of capital stock, purchase, redeem, retire or
otherwise acquire any shares of any class of
its capital stock or any security convertible
into any class of its capital stock or agree
to do any of the foregoing; or
8.1.3.5 change its charter or bylaws; or
8.1.3.6 except consistent with past practices, grant
any increase in the compensation payable or to
become payable by it to its officers or
employees or any increase, regardless of
amount, in any bonus, insurance, pension or
other benefit plan, program, payment or
arrangement made to, for, or with any officers
or employees; or
8.1.3.7 engage in any transaction not in the ordinary
course of business; or
8.1.3.8 borrow or agree to borrow any funds or assume,
endorse, guarantee or agree to guarantee or
otherwise as an accommodation become liable or
responsible for obligations of any other
individual, firm or corporation; or
8.1.3.9 waive any rights of substantial value; or
8.1.3.10 enter into an agreement, contract or
commitment which, if entered into prior
to the date of this Agreement, would be
required to be listed in a Schedule
pursuant to the terms of this Agreement
and is in excess of Twenty-Five Thousand
Dollars ($25,000.00); or
8.1.3.11 acquire any Real Property; or
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8.1.3.12 enter into any agreement with Affiliates
or trustees of the Sullivan Trusts or
Affiliates, officers or directors of
Chem-Con; or
8.1.3.13 adopt, enter into, or amend materially
any employment contract or any bonus,
stock option, profit-sharing, pension,
retirement, incentive, or similar
employee benefit program; or
8.1.3.14 pay or incur any obligation or liability,
absolute or contingent, other than
liabilities incurred in the ordinary and
usual course of its business; or
8.1.3.15 mortgage, pledge, or subject to lien or
other encumbrance any of its properties
or assets; or
8.1.3.16 except for transactions in the ordinary
and usual course of its business, sell or
transfer any of its properties or assets
or cancel, release or assign any
indebtedness owed to it or any claims
held by it; or
8.1.3.17 make any investment of a capital nature
in excess of Twenty-Five Thousand Dollars
($25,000.00) for any one item or group of
similar items, contributions to capital,
property transfers, or otherwise, or by
the purchase of any property or assets of
any other individual, firm, or
corporation; or
8.1.3.18 enter into any other agreement not in the
ordinary and usual course of business; or
8.1.3.19 merge or consolidate with any other
corporation, acquire any of its assets or
capital stock, solicit any offers for any
of its assets or capital stock, or,
except in the ordinary course of
business, acquire any assets of any other
person, corporation, or other business
organization, or enter into any
discussions with any person concerning,
or agree to do, any of the foregoing; or
8.1.3.20 enter into any transaction or take any
action which would, if effected prior to
the Closing, constitute a breach of any
of the representations, warranties or
covenants contained in this Agreement.
8.1.4 Sale of Assets. Without the prior written consent of
Perma-Fix, neither Chem-Con nor any of its Subsidiaries
will undertake or enter into any sale, disposition,
surrender, acquisition, agreement or transaction
relating to any of its assets except in the ordinary
course of business or as contemplated by this
Agreement.
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8.2 No Selling of Shares or Granting of Options. Prior to the
Closing, neither the ALS Trust, Chem-Con nor CCC shall sell,
transfer, assign or otherwise dispose of any of the Shares or
the shares of capital stock of CCC or grant any options,
warrants, or other rights to purchase or otherwise acquire any
Shares or other shares of the capital stock of Chem-Con or
CCC, or issue any securities convertible into any shares of
the capital stock of Chem-Con or CCC.
8.3 Consents. Chem-Con, the Sullivans, the Sullivan Trusts and
Perma-Fix shall each use its best efforts to obtain the
consent or approval of each person or Governmental Authority
whose consent or approval shall be required in order to permit
Chem-Con, the Sullivans, the Sullivan Trusts or Perma-Fix, as
the case may be, to consummate the transactions contemplated
by this Agreement.
8.4 Governmental Reports. Between the date of this Agreement and
the Closing, the Sullivans, the Sullivan Trusts and Chem-Con
shall furnish, make available to Perma-Fix any and all
reports, not heretofore delivered to Perma-Fix under this
Agreement or which are filed subsequent to the date of this
Agreement, to any state, federal or local government, agency
or department, including, but not limited to, the SEC, the
IRS, the EPA, the FTC and the PBGC.
8.5 Conduct of Business. Prior to the Closing, Chem-Con shall
conduct its business in the ordinary and usual course as
heretofore conducted and to use its best efforts (i) to
preserve its business and business organization intact; (ii)
to keep available to Chem-Con the services of the present
officers and employees of Chem-Con; (iii) to preserve the
goodwill of customers and others having business relations
with Chem-Con; (iv) to maintain its properties in customary
repair, working order and condition (reasonable wear and tear
excepted); (v) to comply with all Laws applicable to it and
the conduct of its businesses; (vi) to keep in force at not
less than their present limits all existing policies of
insurance; (vii) to make no material changes in the customary
terms and conditions upon which it does business; (viii) to
duly and timely file all reports, returns, and other documents
required to be filed with federal, state, local and other
Governmental Authorities; and, (ix) unless it is contesting
the same in good faith and has established reasonable reserves
therefor, to pay, when required to be paid, all Taxes
indicated by Returns so filed or otherwise lawfully levied or
assessed upon it or any of its properties and to withhold or
collect and pay to the proper Governmental Authorities or hold
in separate bank accounts for such payment all taxes and other
assessments which it believes in good faith to be required by
Law to be so withheld or collected.
8.6 Governmental Approvals. Prior to Closing, each of Chem-Con,
the Sullivans and the Sullivan Trusts shall use its best
efforts in good faith to take or cause to be taken as promptly
as practicable all such steps as shall be necessary to obtain
all required Governmental Approvals as promptly as practicable
to consummate the transactions contemplated by this Agreement.
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8.7 Encumber. None of Chem-Con, the ALS Trust nor the Sullivan
Trusts shall sell, pledge, encumber or otherwise hypothecate
or transfer or grant an option, warrant or right to sell or
dispose of any shares of capital stock of Chem-Con prior to
the Closing other than pursuant to this Agreement.
8.8 Title Policies for Real Property Owned by Chemical Florida.
On or before five (5) days prior to the Closing Date, Chemical
Florida shall deliver to Perma-Fix a fully paid policy or
policies of title insurance, dated as of a date within five
(5) days of the Closing Date, issued to Chemical Florida and
Perma-Fix by a title company of nationally recognized
standing, reasonably satisfactory to Perma-Fix, on a standard
ALTA's owner title insurance policy form, insuring that
Chemical Florida has good and marketable fee simple title in
and to each parcel of Real Property owned by Chemical Florida
listed on Schedule F hereto, free and clear of all Liens and
containing no exceptions, except Permitted Encumbrances. The
amount of such title insurance for each parcel of Real
Property owned by Chemical Florida shall be as set forth on
Schedule F hereto. The cost and expense for such title
insurance shall be shared equally by the Sullivans and Perma-
Fix.
8.9 Title Policies for Real Properties owned by Chemical Georgia.
On or before five (5) days prior to the Closing Date, Chemical
Georgia shall deliver to Perma-Fix a fully paid policy or
policies of title insurance, dated as of a date within five
(5) days of the Closing Date, issued to Chemical Georgia and
Perma-Fix by a company of nationally recognized standing,
reasonably satisfactory to Perma-Fix, on a standard ALTA's
owner title insurance policy form, insuring to Chemical
Georgia and Perma-Fix that Chemical Georgia has good and
marketable fee simple title in and to each parcel of Real
Property owned by Chemical Georgia listed on Schedule F
hereto, free and clear of all Liens and containing no
exceptions, except Permitted Encumbrances. The amount of such
title insurance for each parcel of Real Property owned by
Chemical Georgia shall be as set forth on Schedule F hereto.
The cost and expenses for such title insurance shall be shared
equally by the Sullivans and Perma-Fix.
8.10 Real Property Located in Orlando, Florida. The Real Property
located in Orlando, Florida, as described in Schedule F
attached hereto, and all improvements located thereon (the
"Orlando Real Property"), which Orlando Real Property is being
leased by Chemical Florida, from the ALS Trust. ALS Trust
represents and warrants that it has good and marketable fee
simple title in and to the Orlando Real Property and all of
the Mineral Rights thereunder, free and clear of any and all
Liens except for (a) Permitted Encumbrances and (b) two
mortgages owed to and held by (i) Sun Trust Bank with the
principal amount of such indebtedness as of December 31, 1998,
being approximately $110,000.00 ("Sun Trust Debt") and (ii)
Commercial Carrier with the principal amount of such
indebtedness as of the date hereof being approximately
$138,000.00 ("Carrier Debt"). The Sun Trust Debt and Carrier
Debt are collectively referred to herein as the "Two
Mortgages." Within ten (10) days prior to the Closing, the
ALS Trust shall, through a capital contribution, transfer and
convey good and marketable fee simple title to all of the
Orlando Real Property, all improvements located thereon and
all of the Mineral Rights thereunder, by a general warranty
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<PAGE>
deed in form and contents satisfactory to Perma-Fix, to
Chemical Florida, free and clear of any and all Liens except
for Permitted Encumbrances and the Two Mortgages. ALS Trust
represents and warrants that the Two Mortgages are current and
without default and no event has occurred under the Two
Mortgages which would, with the passage of time, result in a
default. On or before five (5) days prior to the Closing
Date, the ALS Trust shall deliver to Perma-Fix a fully paid
policy of title insurance, dated as of the date within five
(5) days of the Closing Date, issued to Chemical Florida and
Perma-Fix by a title company of nationally recognized
standing, reasonably satisfactory to Perma-Fix, on a standard
ALTA's owner title insurance policy form, insuring to Chemical
Florida and Florida Perma-Fix that Chemical Florida has good
and marketable fee simple title in and to the Orlando Real
Property, free and clear of all Liens and containing no
exceptions other than (a) Permitted Encumbrances and (b) the
Two Mortgages. The amount of such title insurance shall be
$385,000.00. The cost and expense for such title insurance
shall be shared equally by the ALS Trust and Perma-Fix.
8.11 Survey. Simultaneously with the delivery of the title
policies to Perma-Fix pursuant to Sections 8.8, 8.9 and 8.10
hereof, Chem-Con shall deliver to Perma-Fix and the title
company issuing the title insurance under Sections 8.8, 8.9
and 8.10 hereof, a written survey certified in a manner
reasonably acceptable to Perma-Fix and prepared by a duly
licensed surveyor reasonably satisfactory to Perma-Fix
covering each of the Real Properties owned by Chem-Con and the
Orlando Real Property, which survey shall be satisfactory to
Perma-Fix and to the title company issuing the ALTA's owner's
title insurance policies prepared in accordance with the
"Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys" jointly established and adopted by ALTA and ACSM in
1992 and includes items 1, 2, 3, 4, 6, 7(a), 7(b)(i), 8, 9,
10, 11 and 13 of Table A thereto and pursuant to the accuracy
standards (as adopted by ALTA and ACSM and in effect on the
date of the certification) of an Urban Survey. The cost and
expense for such survey shall be shared equally by the
Sullivans and Perma-Fix.
8.12 Public Announcements. Perma-Fix, the Sullivans and the
Sullivan Trusts agree that they will consult with each other
before issuing any press releases or otherwise making any
public statements with respect to this Agreement or the
transactions contemplated hereby and any press release or any
public statement shall be subject to mutual agreement of the
parties, except as may be required by the disclosure
obligations of either party or their Affiliates under
applicable securities law.
8.13 Notification. Chem-Con, the Sullivans and the Sullivan Trusts
shall give Perma-Fix prompt written notice of (i) the
existence of any fact or the occurrence of any event which
constitutes, or with the giving of notice or the passage of
time or both would constitute a breach of any representation
<PAGE>
or warranty of Chem-Con, the Sullivans or the Sullivan Trusts
made herein or pursuant hereto and (ii) the taking of any
action by Chem-Con, the Sullivans or the Sullivan Trusts that
would breach or violate, or constitute a default under, any
agreement or covenant of Chem-Con, the Sullivans or the
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Sullivan Trusts made herein or pursuant hereto. Upon the
giving of such notice, Perma-Fix may terminate this Agreement
in accordance with the terms hereof.
8.14 Filings. The parties hereto shall, as promptly as practicable
after the date hereof, submit applications, all documents,
reports and notifications, and satisfy all requests for
additional information, if any, pursuant to 40 Code of Federal
Regulations ("CFR") Part 270 and all other requirements under
any and all applicable Environmental Laws, with regard to the
transfer of, or changes in the ownership or operational
control of Chem-Con or any of its Subsidiaries or the permits,
licenses or approvals held or used by Chem-Con or any of its
Subsidiaries relating to the businesses of Chem-Con or any of
its Subsidiaries. Each of the parties hereto agree to
reasonably cooperate with each other to obtain all
authorizations required under any and all applicable laws, to
consummate the transactions contemplated hereby.
8.15 Supplemental Disclosure. Chem-Con, the Sullivans and the
Sullivan Trusts agree that, with respect to their
representations and warranties made in this Agreement, they
will have a continuing obligation to supplement or amend the
Schedules hereto with respect to any matter hereafter arising
or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or
described in the Schedules hereto. Upon the supplementing or
amending of any Schedules by Chem-Con, the Sullivans or the
Sullivan Trusts or the discovery of any matters by Perma-Fix
in the course of its investigations, Perma-Fix may, at its
option, terminate this Agreement without any liability or
obligation on the part of Perma-Fix.
8.16 SEC Filings. Perma-Fix shall provide the Sullivans with all
reports and other filings it makes with the SEC under the
Securities Act or under the Exchange Act from the date of this
Agreement to the Closing.
8.17 Listing of Perma-Fix Common Stock. Perma-Fix shall use
reasonable efforts to obtain, prior to the Closing, approval
for listing on the BSE and NASDAQ Small Cap Market, upon
official notice of issuance, of the shares of Perma-Fix Common
Stock to be delivered pursuant to the provisions of Section
3.3 hereof.
8.18 Information for SEC Filings. The parties hereto will each
furnish to the other such data and information relating to it
as the other may reasonably request for the purpose of
including such data and information in documents to be filed
with the SEC by Perma-Fix.
8.19 Audited Financial Statements. Chem-Met, the Sullivans and the
Sullivan Trusts shall have Bovitz & Co., P.C., prepare, audit
and deliver to Perma-Fix true, correct and complete copies of
the 1998, 1997 and 1996 Audited Financial Statements of Chem-
<PAGE>
Con and Chem-Met, on a combined basis, consisting of (i)
balance sheet as of fiscal years ended September 30, 1998,
September 30, 1997 and September 30, 1996; (ii) statement of
income and related earnings for the fiscal years ended
September 30, 1998, September 30, 1997 and September 30, 1996;
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(iii) statement of stockholders' equity and statement of cash
flow for the years ended September 30, 1998, September 30,
1997 and September 30, 1996, and (iv) notes thereto, with
auditors' report thereon being unqualified, all of which shall
have been examined by Bovitz & Co., P.C., independent
certified public accountants, and be in accordance with
Regulation S-X (17 C.F.R. Part 210) and GAAP, consistently
applied. The audited financial statements referred to in this
Section 8.19 shall include Chem-Con and Chem-Met, on a
combined basis. Perma-Fix agrees to pay for that portion of
such audited financial statements for Chem-Con and Chem-Met,
on a combined basis, relating to years ended September 30,
1996, 1997 and 1998 unless the audit finds that the income of
Chem-Con and Chem-Met, on a combined basis, is twenty percent
(20%) less than represented prior to accounting entries as
follows: (i) reversal of officer notes receivable of
$1,125,919 offset by a note payable from the officer in the
amount of $60,980; (ii) increased allowance for doubtful
accounts of Two Hundred Thousand Dollars ($200,000); (iii)
accrued expenses of Six Hundred Thousand Dollars ($600,000);
(iv) reserve for remediation of Chem-Con's Valdosta, Georgia
facility of One Million Eight Hundred Thousand Dollars
($1,800,000); and (v) accrued closure costs of Six Hundred
Thirty-Five Thousand Eight Hundred Two Dollars ($635,802), in
which case the audit shall be paid for in its entirety by
Chem-Con.
8.20 Public Disclosure. Perma-Fix and the Sullivans shall consult
with each other before issuing any press release or otherwise
making any public statement with respect to the Acquisitions
or this Agreement and shall not issue any such press release
or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with
a national securities exchange or the NASDAQ.
8.21 Letter of Public Accountants. Chem-Con, the Sullivans and the
Sullivan Trusts shall cause to be delivered to Perma-Fix a
letter, ("Accountant Letter") which shall be dated not less
than five days prior to the Closing Date, from Bovitz & Co.,
P.C., which shall be addressed to Perma-Fix and be in form
reasonably satisfactory to Perma-Fix and customary in scope
and substance for letters delivered by independent public
accountants in connection with registration statements and
shall contain, without limitation, the following statements: (i)
the combined Audited Financial Statements of Chem-Con and
Chem-Met examined by them comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and of the published Rules and Regulations
thereunder and (ii) on the basis of a reading of the latest
available unaudited consolidated financial statements,
inquiries of officers of Chem-Con and Chem-Met responsible for
financial and accounting matters and a reading of the minutes,
nothing has come to their attention which caused them to
believe that (a) as of the date of the latest available
unaudited interim financial statements prepared by Chem-Con
and Chem-Met there was any change in the capital stock or
long-term debt of Chem-Con, Chem-Met and their subsidiaries
consolidated or any decreases in consolidated net current
assets or in consolidated net assets, as compared with the
amounts shown in the September 30, 1998, consolidated Balance
Sheet, or (b) for the period from September 30, 1998, to the
date of the latest available unaudited interim consolidated
financial statements prepared by Chem-Con, there were any
decreases, as compared with the corresponding period in the
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preceding year, in consolidated net revenues or in total or
per share amounts of consolidated income (loss) before
extraordinary items or of consolidated net income, except in
all instances for changes or decreases which the Audited
Financial Statements of Chem-Con and Chem-Met disclose have
occurred or may occur, and (c) that on the basis of inquiries
of officers of Chem-Con and Chem-Met responsible for financial
and accounting matters and a reading of the minutes, nothing
has come to their attention which caused them to believe that
(1) at a specified date within five (5) days of the Closing
Date there was any change in the capital stock or long-term
debt of Chem-Con and Chem-Met and their subsidiaries
consolidated or any decreases in consolidated net current
assets or in consolidated net assets, as compared with amounts
shown on the September 30, 1998, consolidated Balance Sheet or
(2) for the period from the date of the Audited Financial
Statements prepared by Chem-Con and Chem-Met for year ended
September 30, 1998, to a specified date within five (5) days
of the Closing Date there were any decreases as compared with
the corresponding period in the preceding year, in
consolidated net revenues or in the total or per-share amounts
of consolidated income before extraordinary items or of
consolidated net income, except in all instances for changes
or decreases which this Agreement or the Chem-Met Agreement
discloses have occurred or may occur.
8.22 Assumption of Liabilities. Each of the Sullivans and the
Sullivan Trusts, jointly and severally, assume, and agree to
pay, when due to perform or discharge, as the case may be, any
and all (i) federal and/or state tax obligations and
liabilities of Chem-Con and Quanta (and any other corporation
with respect to periods for which such corporation was
included and consolidated federal income tax returns with
Chem-Con or Quanta) for any period ending on or prior to the
Closing Date, without regard to whether such liabilities have
been or would be properly provided for in the financial
records of any person under generally accepted accounting
principals, and including, without limitation, any such
obligations or liabilities arising from (A) the transactions
contemplated by this Agreement, (B) the determination of any
tax on a consolidated basis with any other corporation, or (C)
any tax sharing or tax allocation agreement, and (ii)
obligations and liabilities (absolute or contingent known or
unknown)of Quanta that have been incurred by Quanta in any
manner whatsoever prior to the Closing Date or arising in any
way in connection with the business or operations of Quanta
prior to the Closing Date.
8.23 Liability to Broker. The Sullivans have retained WHCA
Partners as an agent or firm acting on behalf of the Sullivans
and the Sullivan Trusts in connection with this Agreement and
the transactions contemplated by this Agreement. Except as
otherwise expressly provided in Section 4.15 hereof, the
Sullivans and the Sullivan Trusts shall, jointly and
severally, pay any and all fees or renumeration due and
<PAGE>
payable to WHCA Partners as a result of this Agreement and/or
consummation of the transactions contemplated by this
Agreement.
8.24 Access to Premises and Books. The Sullivans, the Sullivan
Trusts and their representatives shall have full access to all
their premises and books and records relating to Perma-Fix,
and Perma-Fix shall provide to the Sullivans, the Sullivan
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Trusts and their representatives full access to their
premises and books and records, and to cause Perma-Fix's
officers to furnish the Sullivans, the Sullivan Trusts with
such financial and operating data and other information with
respect to the business and properties of Perma-Fix, as the
Sullivans or Sullivan Trusts shall from time to time request;
provided, however, that any such investigation shall not
affect any of the representations, warranties or covenants of
Perma-Fix hereunder; and, provided further, that any such
investigation shall be conducted in such manner as not to
interfere unreasonably with the operation of the business of
Perma-Fix. In the event of termination of this Agreement, the
Sullivans and the Sullivan Trusts will return to Perma-Fix
any and all financial statements, agreements, documents,
memoranda or other repositories of information relating to
Perma-Fix and its Subsidiaries that Chem-Con, the Sullivans or
the Sullivan Trusts have obtained in connection with their
review, and Chem-Con, the Sullivans and the Sullivan Trusts
agree that any written information relating to Perma-Fix and
its Subsidiaries and Perma-Fix's and its Subsidiaries'
financial condition, business, operations and prospects are
strictly confidential and shall not be voluntarily disclosed
to any third party or used by any of Chem-Con, the Sullivans
or the Sullivan Trusts for its benefit or the benefit of any
other person, except for such information or documents (i)
available generally to the public, (ii) in the possession of
Chem-Con prior to its receipt under this Agreement, (iii)
obtained by any of Chem-Con, the Sullivans or the Sullivan
Trusts from a third party who has an independent right to such
information or documents, or (iv) as otherwise required by law
to be disclosed; provided, however, that any confidentiality
requirements contained in this Section shall terminate and be
null and void twelve (12) months from the date of this
Agreement.
ARTICLE 9
CONDITIONS OF TRANSACTIONS CONTEMPLATED BY AGREEMENT;
ABANDONMENT OF AGREEMENT
_____________________________________________________
9.1 Closing Conditions of Perma-Fix. The obligations of Perma-Fix
to consummate this Agreement or to effect the transactions
contemplated by this Agreement shall be subject to the
following conditions:
9.1.1 Resolutions of Board of Directors and Shareholders of
Chem-Con. Chem-Con shall have furnished to Perma-Fix,
in form and substance satisfactory to Perma-Fix:
9.1.1.1 certified copies of resolutions of the
shareholder and Board of Directors of Chem-
Con, duly adopted by the Board of Directors
and shareholder of Chem-Con, authorizing, the
<PAGE>
execution, delivery and performance of this
Agreement by Chem-Con and its shareholder;
9.1.1.2 Incumbency certificate for the officers
of Chem-Con.
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<PAGE>
9.1.2 Delivery of Trust Documents. The trust documents
creating the Sullivan Trust shall have been delivered
to Perma-Fix evidencing, in form and content
satisfactory to Perma-Fix that each of the Sullivan
Trusts has the full, valid and legal capacity and
authority to execute, deliver and perform all of its
agreements, obligations, terms and conditions of this
Agreement.
9.1.3 Approval by Lender. Perma-Fix's lender shall have
approved the transactions contemplated by this
Agreement and the Chem-Met Agreement, and Perma-Fix
shall have obtained for Chem-Con and Chem-Met a working
capital line of credit from and after consummation of
the Acquisitions on terms satisfactory to Perma-Fix.
All of Chem-Met's debts and obligations to Charter Bank
shall have been paid in full, and Charter Bank shall
have released all liens and security interest in and to
the assets of Chem-Met, all in form and substance
satisfactory to Perma-Fix.
9.1.4 Representations and Warranties of the Sullivans and the
Sullivan Trusts to be True and Correct and Compliance
With Covenants. Except to the extent waived in writing
by Perma-Fix hereunder, (i) the representations and
warranties of the Sullivans and the Sullivan Trusts
herein contained shall be true and correct in all
material respects on the Closing Date with the same
effect as though made at such time; and (ii) the
Sullivans and the Sullivan Trusts shall have performed
all of their obligations and complied with all
covenants, obligations, and agreements required by this
Agreement to be performed or complied with by the
Sullivans and the Sullivan Trusts on or prior to the
Closing Date. The Sullivans and Sullivan Trusts shall
also have delivered to Perma-Fix a certificate, dated
the Closing Date and signed by each of the Sullivans
and all trustees of the Sullivan Trusts, to both of the
aforementioned effects. The Certificate is to be in
form and substance satisfactory to Perma-Fix.
9.1.5 Representations and Warranties of Chem-Con to be True
and Compliance With Covenants. Except to the extent
waived in writing by Perma-Fix hereunder, (i) the
representations and warranties of Chem-Con herein
contained shall be true in all material respects on the
Closing Date with the same effect as though made at
such time; and (ii) Chem-Con shall have performed all
obligations and complied with all covenants,
obligations, and agreements required by this Agreement
to be performed or complied with by Chem-Con on or
prior to the Closing Date. Chem-Con shall also have
delivered to Perma-Fix a certificate of Chemical
Florida (in form and substance satisfactory to Perma-
Fix), dated the Closing Date and signed by the chief
executive officer of Chemical Florida, to both of the
aforementioned effects. Chem-Con shall also have
delivered to Perma-Fix a certificate of Chemical
Georgia (in form and substance satisfactory to Perma-
Fix), dated the Closing Date and signed by the chief
executive officer of Chemical Georgia, to both of the
aforementioned effects.
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<PAGE>
9.1.6 Third Party Consents. Chem-Con, the Sullivans and the
Sullivan Trusts shall have obtained consents to the
transactions contemplated by this Agreement from the
parties to all contracts, permits, agreements, debt
instruments and other documents referred to in the
Schedules delivered by Chem-Con, the Sullivans or the
Sullivan Trusts to Perma-Fix in accordance with this
Agreement or otherwise, which require such consents and
consents from, or notification to, all Governmental
Authorities which require such consents or
notifications.
9.1.7 No Material Adverse Change. There shall not have
occurred (i) any material adverse change since
September 30, 1998, in the business, properties,
assets, results of operations or financial condition of
Chem-Con, or (ii) any loss or damage to any of the
properties or assets (whether or not covered by
insurance) of Chem-Con which will materially affect or
impair the ability of Chem-Con to conduct, after
consummation of the transactions contemplated hereby,
the business of Chem-Con as now being conducted by
Chem-Con.
9.1.8 Statutory Requirements; Litigation. In a manner
satisfactory to Perma-Fix, (i) all statutory
requirements for the valid consummation by Chem-Con,
the Sullivan Trusts and the Sullivans of the
transactions contemplated by this Agreement shall have
been fulfilled; all authorizations, consents and
approvals of all Governmental Authorities required to
be obtained in order to permit consummation by Chem-
Con, the Sullivan Trusts and the Sullivans of the
transactions contemplated by this Agreement and to
permit the business presently conducted by Chem-Con to
continue unimpaired immediately following the Closing
shall have been obtained; and, (ii) all applications
for permits shall have been approved by the appropriate
Governmental Authorities and all authorizations and
approvals relating to all permits and licenses held by
Chem-Con shall have been obtained from the appropriate
Governmental Authorities under any and all of the
Environmental Laws as a result of the change in
ownership of Chem-Con, pursuant to the terms of this
Agreement, with such permits, approvals and
authorizations to be in form and substance satisfactory
to Perma-Fix, so that Chem-Con is permitted to continue
unimpaired immediately following the Closing Date the
same business operations that Chem-Con carried on as of
the date of this Agreement and the Closing Date.
Between the date of this Agreement and the Closing, no
Governmental Authority, whether federal, state or
local, shall have instituted (or threatened to
institute either orally or in a writing directed to any
of Chem-Con, the Sullivans and/or the Sullivan Trusts
or any of their subsidiaries) an investigation which is
pending on the Closing relating to this Agreement and
the transactions contemplated hereby, and between the
date of this Agreement and the Closing no action or
proceeding shall have been instituted or, to the
knowledge of Perma-Fix, shall have been threatened
before a court or other governmental body or by any
public authority to restrain or prohibit the
transactions contemplated by this Agreement or to
obtain damages in respect thereof.
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9.1.9 Opinion of Counsel of Chem-Con, the Sullivans and the
Sullivan Trusts. Perma-Fix shall have received from
O'Rourke & Myers, counsel to Chem-Con, the Sullivans
and the Sullivan Trusts, or such other counsel
acceptable to Perma-Fix and its counsel, an opinion or
opinions, dated the Closing Date, with the form and
contents thereof reasonably satisfactory to Perma-Fix
and its counsel.
9.1.10 Due Diligence. Perma-Fix shall have completed its
financial due diligence of Chem-Con, with the results
thereof satisfactory to Perma-Fix.
9.1.11 Environmental Audit. Perma-Fix shall have conducted
and completed an environmental audit of Chem-Con, and
shall have determined to the satisfaction of Perma-Fix
that, (i) Chem-Con has been and is currently in
compliance in all material respects with all applicable
Environmental Laws, except as otherwise disclosed
herein; (ii) none of the assets (including, but not
limited to, the soils and groundwater on or under any
of the Real Properties) owned, leased, operated or used
by Chem-Con are contaminated with any hazardous
substance (as defined in Section 101(14) of CERCLA or
any analogous state or local Laws) or petroleum (as
defined in Subtitle I of RCRA or any analogous state or
local Laws) in a manner that might have a material
adverse effect on Chem-Con, except as otherwise
disclosed herein; and (iii) Chem-Con is not or would
not be subject to any liability in any material amount
under any provision, or as a result of any past or
present violation, of any applicable Environmental
Laws.
9.1.12 Stock Certificates. On or prior to the Closing, the
ALS Trust shall execute, endorse in blank and deliver
to Perma-Fix, with signatures guaranteed by a bank or
investment banking firm and in form acceptable to
Perma-Fix, all of the stock certificates representing
the Shares, duly and validly endorsed for transfer,
free and clear of any and all Liens.
9.1.13 Permits. All permits (including, but not limited to,
all permits issued or issuable by Governmental
Authorities under all Environmental Laws) which Perma-
Fix deems necessary to conduct Chem-Con's business
after the Closing Date as currently conducted by Chem-
Con shall have been (i) duly and validly transferred,
or approved for transfer or control by Perma-Fix,
effective upon the Closing, in a manner satisfactory to
Perma-Fix by all appropriate Governmental Authorities
or (ii) duly and validly issued to Chem-Con by all
appropriate Governmental Authorities all in form and
content satisfactory to Perma-Fix.
9.1.14 No Liens on Assets. All assets of Chem-Con (real and
personal) shall be free and clear of any and all Liens,
except for Permitted Encumbrances.
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9.1.15 Listing of Perma-Fix Common Stock. The BSE and the
NASDAQ Small Cap Market shall have approved for
listing, upon official notice of issuance, the shares
of Perma-Fix Common Stock to be delivered pursuant to
the provisions of Article 3 hereof.
9.1.16 Minute Books and Stock Ledgers. The ALS Trust shall
have delivered to Perma-Fix the minute books and stock
ledgers for Chem-Con.
9.1.17 Financial Statements. Perma-Fix shall have received
from Bovitz & Co., P.C. Audited Financial Statements
("Chem-Con Audited Financial Statements") of Chem-Con
and Chem-Met for all years required to be included in
the Form 8-K to be filed by Perma-Fix as a result of
consummation of this Agreement and the Chem-Met
Agreement and as required by Regulation S-X (17 CFR
Part 210), with such audited financial statements to be
prepared in accordance with Regulation S-X (17 CFR Part
210) and GAAP, consistently applied throughout the
periods, and with the Bovitz & Co., P.C. report in
connection therewith to be unqualified.
9.1.18 Orlando Real Estate. Good and marketable fee simple
title in and to the Orlando Real Estate and all
improvements thereon shall have been transferred and
conveyed to Chemical Florida by a capital contribution,
free and clear of any and all Liens, except for the
Permitted Encumbrances and the Two Mortgages. Further,
Sun Trust Bank shall have paid the Commercial Carrier
debt and Commercial Carrier shall have released their
mortgage on the Orlando Real Estate.
9.1.19 Title Policies and Surveys. Prior to the Closing Date,
Perma-Fix shall have received the title insurance
policies and surveys pursuant to Sections 8.8, 8.9,
8.10 and 8.11 hereof.
9.1.20 Good Standing Certificates. Good standing and tax
certificates (or analogous documents), dated as close
as practicable to the Closing, from the appropriate
authorities in each jurisdiction of incorporation of
Chem-Con and in each jurisdiction in which Chem-Con is
qualified to do business, showing Chem-Con to be in
good standing and to have paid all taxes due in the
applicable jurisdiction.
9.1.21 Resignation of Directors. All of the directors of
Chem-Con shall have resigned as members of the Board of
Directors of Chem-Con, effective as of the Closing
Date, except for any existing director of Chem-Con who
Perma-Fix advises the ALS Trust in writing prior to
Closing is to remain a director of Chem-Con, whichever
is applicable, prior to Closing.
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9.1.22 Chem-Met Agreement. The Chem-Met Agreement shall have
closed contemporaneously with the Closing of this
Agreement.
9.1.23 Valdosta Remediation. Prior to Closing, Perma-Fix
shall have determined that the cost to remediate the
contamination at the Valdosta, Georgia facility where
Chemical Georgia is located shall not, in the
aggregate, exceed $1,800,000.
9.1.24 Shareholder Approval. The shareholders of Chem-Con
shall have approved the Acquisitions pursuant to the
laws of the states of incorporation of Chem-Con and no
shareholders of Chem-Con shall have exercised or
attempted to exercise dissenters rights or other
similar rights in connection with the transactions
contemplated hereby.
9.1.25 Accountants Letters. Perma-Fix shall have received the
Accountant Letter and such shall be satisfactory to
Perma-Fix.
9.1.26 Officer and Director Waiver. Each officer and director
of Chem-Con and CCC shall have executed and delivered
to Perma-Fix an agreement, in form and substance
satisfactory to Perma-Fix pursuant to which each such
officer and director shall waive any and all rights to
indemnification which any such officer and director may
have from Chem-Con and/or CCC pursuant to Chem-Con's or
CCC's Certificate of Incorporation, Bylaws, any
indemnification agreements, or otherwise.
9.1.27 Fairness Opinion. Within five (5) days prior to the
Closing, Perma-Fix shall have received a fairness
opinion from an investment banker selected by Perma-Fix
that this Agreement and the Chem-Met Agreement and the
consideration to be issued by Perma-Fix under this
Agreement and the Chem-Met Agreement is fair to Perma-
Fix and its shareholders from a financial standpoint,
with the form and contents of such opinions to be
satisfactory to Perma-Fix.
9.1.28 Michigan Strategic Fund. Perma-Fix shall have arranged
with its lender to repay the Chem-Con and/or Chem-Met
debt to the Michigan Strategic Fund, and the Michigan
Strategic Fund shall have released and terminated its
liens in and to any and all assets of Chem-Con and
Chem-Met.
9.2 Conditions to Obligations of Chem-Con and The ALS Trust. The
obligation of Chem-Con and the ALS Trust to consummate this
Agreement or to effect the transactions contemplated by this
Agreement shall be subject to the following conditions:
9.2.1 Resolutions of Perma-Fix Board of Directors and
Shareholders. Perma-Fix shall have furnished Chem-Con
with:
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9.2.1.1 certified copies of resolutions duly adopted
by the Board of Directors of Perma-Fix
approving and authorizing execution, delivery
and performance of the transactions
contemplated by this Agreement;
9.2.1.2 Incumbency Certificates for the officers of
Perma-Fix.
9.2.2 Representations and Warranties of Perma-Fix to be True.
Except to the extent waived hereunder, (i) the
representations and warranties of Perma-Fix herein
contained shall be true in all material respects at the
Closing with the same effect as though made at such
time, except for such which do not have a material
adverse effect on Perma-Fix and its subsidiaries, taken
as a whole; and (ii) Perma-Fix shall have performed all
material obligations and complied with all material
covenants required by this Agreement to be performed or
complied with by it prior to the Closing. Perma-Fix
shall also have delivered to the ALS Trust a
certificate of Perma-Fix, dated the Closing and signed
by its President or a Vice President, to both of the
aforementioned effects.
9.2.3 No Material Adverse Change. Except as otherwise
disclosed in this Agreement or as publicly disclosed to
the shareholders of Perma-Fix or contained in the
Perma-Fix SEC Filings, there shall not have occurred
(i) any material adverse change since December 31,
1998, in the consolidated financial condition of Perma-
Fix (it being understood that anything disclosed in any
of the financial data furnished by Perma-Fix to the
Sullivans or the Sullivan Trusts pursuant to this
Agreement, or in an annual, interim or other report
filed by Perma-Fix with the SEC or press releases
issued by Perma-Fix (copies of which shall have been
furnished to the ALS Trust) since December 31, 1998,
and prior to the date of this Agreement (copies of
which shall have been furnished to Chem-Con, the
Sullivans or the Sullivan Trusts), shall not constitute
such a material adverse change or (ii) any loss or
damage to any of the material properties or assets of
Perma-Fix which would have a material adverse effect on
Perma-Fix and its subsidiaries considered as a whole.
9.2.4 Litigation. Between the date of this Agreement and the
Closing, no Governmental Authority, whether federal,
state or local, shall have instituted (or threatened to
institute, either orally or in writing, directed to any
of the Sullivan Trusts, Perma-Fix, Chem-Con, or any of
their subsidiaries) an investigation which is pending
on the Closing Date relating to the transactions
contemplated by this Agreement and between the date of
this Agreement and the Closing Date, no action or
proceeding shall have been instituted or, to the
knowledge of the Sullivans, the Sullivan Trusts, Perma-
Fix or Chem-Con, shall have been threatened before a
court or other governmental body or by any public
authority to restrain or prohibit the transactions
contemplated by this Agreement or to obtain damages in
respect thereof.
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9.2.5 Opinion of Counsel of Perma-Fix. The ALS Trust shall
have received from Conner & Winters, a Professional
Corporation, counsel to Perma-Fix, or such other
counsel reasonably acceptable to the ALS Trust and its
counsel, an opinion, dated the Closing Date, with the
form and content thereof reasonably satisfactory to
Chem-Con and its counsel.
9.3 Termination of Agreement and Abandonment of Acquisitions.
Except as otherwise provided in Sections 8.1.1 and 8.29
hereof, this Agreement and the transactions contemplated
hereby may be terminated at any time before the Closing as
follows and in no other manner:
9.3.1 Conditions of the Sullivans, the Sullivan Trusts or
Chem-Con Not Met. By Perma-Fix if, by June 30, 1999,
the conditions set forth in Section 9.1 of this Article
9 shall not have been met (or waived as provided in
Article 10 of this Agreement).
9.3.2 Conditions of Perma-Fix Not Met. By the Sullivans if,
by June 30, 1999, the conditions set forth in Section
9.2 of this Article 9 shall not have been met (or
waived as provided in Article 10 of this Agreement).
9.3.3 Termination by Perma-Fix or the Sullivans under Section
9.3 of the Chem-Met Agreement. By Perma-Fix or by the
Sullivans, if the Chem-Met Agreement is terminated
pursuant to the terms thereof.
9.3.4 Mutual Consent. By the mutual written consent of both
Perma-Fix and Chem-Con.
9.4 Expenses. Each party shall bear its own out-of-pocket
expenses incurred in connection with the transactions
contemplated by this Agreement, including, without limitation,
all legal, accounting, consulting, brokers, advisory, travel,
communications and other similar fees and expenses; provided,
however, that any and all such expenses incurred by Chem-Con
in connection with this Agreement and consummation of the
transactions contemplated by this Agreement shall be
considered as incurred by the ALS Trust and shall be paid by
the ALS Trust.
ARTICLE 10
TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS
___________________________________________________
10.1 Termination. In the event that this Agreement shall be
terminated pursuant to Section 9.3 hereof, all further
obligations of the parties hereto under this Agreement shall
terminate without further liability of any party to another
and each party hereto will pay its own costs and expenses
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incident to its negotiation and preparation of this Agreement
and to its performance and compliance with all agreements and
conditions contained herein on its part to be performed or
complied with, including the fees, expenses and disbursements
of its counsel.
10.2 Waiver. If any of the conditions specified in Section 9.1 of
Article 9 hereof has not been satisfied, Perma-Fix may
nevertheless at the election of Perma-Fix proceed with the
transactions contemplated hereby; and, if any of the
conditions specified in Section 9.2 of Article 9 hereof has
not been satisfied, the ALS Trust may nevertheless at the ALS
Trust' election proceed with the transactions contemplated
hereby. Any such election to proceed shall be evidenced by a
certificate executed on behalf of the electing party. Any
such waiver shall not be considered as a waiver of any of the
other terms and provisions of this Agreement by the electing
party.
ARTICLE 11
INDEMNIFICATION AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES
______________________________
11.1 Indemnification by the Sullivans and the Sullivan Trusts. The
Sullivans and the Sullivan Trusts shall, jointly and
severally, defend, indemnify and hold harmless each of Perma-
Fix, Chem-Con, and each of their officers, directors,
employees, agents, representatives and Affiliates from and/or
against any and all claims, judgments, demands, damages,
penalties, fines, losses, orders (judicial or administrative),
decrees, liabilities, obligations, costs, claims and expenses
(including, without limitation, reasonable attorneys' fees and
accountant fees) which any of Perma-Fix, Chem-Con and each of
their officers, directors employees, agents, representatives
and Affiliates incurs or suffers or may incur or suffer at any
time as a result of or in connection with or arising out of
(i) any representation or warranty made by any of Chem-Con,
the Sullivans and/or the Sullivan Trusts in this Agreement or
any certificate or other document delivered to Perma-Fix
pursuant to this Agreement that is false or misleading; (ii)
any breach of or failure to perform any agreements, covenants,
promises or obligations of Chem-Con, the Sullivans and/or
Sullivan Trusts contained in this Agreement; (iii) any
liabilities, obligations or claims arising in any way from any
and all federal or state income tax liability which Chem-Con,
Chem-Met and/or Quanta may be liable to pay for any reason
whatsoever for any and which have not been disclosed to
Perma-Fix in writing on or prior to the date of this
Agreement, all periods prior to the Closing Date; (iv) any and
all other liabilities, obligations or claims incurred by
Quanta prior to the Closing Date or arising in any way in
connection with the business or operations of Quanta prior to
the Closing Date prior to the date of this Agreement; (v) any
liabilities, obligations or claims brought under CERCLA or
RCRA or any analogous state statute for the release or
threatened release of any hazardous substances (as defined in
CERCLA) or hazardous waste (as defined in RCRA) in which the
Sullivans or Chem-Con knew was pending or threatened against
Chem-Con as of the date hereof or at the Closing Date but
failed for any reason to disclose such in this Agreement or
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was, directly or indirectly, caused by or resulted from the
knowing or willful violation by Sullivan or Chem-Con on or
prior to the Closing Date of CERCLA, RCRA or any analogous
state statute; or (vi) any and all liabilities, obligations or
claims arising in any way from any hazardous waste facility
gross receipts tax that may be due under Fl. St. Section 403.7215
(and any predecessor statute) for which Chemical Florida may
be liable or required to pay for any reason whatsoever for any
and all periods prior to January 1, 1999.
11.2 Indemnification as to Four County Landfill. The Sullivans and
the Sullivan Trusts shall, jointly and severally, defend,
indemnify and hold harmless each of Perma-Fix, Chem-Met and
each of their officers, directors, employees, agents,
representatives and Affiliates from and against any and all
claims, demands, damages, liabilities, obligations, costs, and
expenses which any of Perma-Fix, Chem-Met and/or each of their
officers, directors, employees, agents, representatives and
Affiliates incurs and suffers, or may incur or suffer, at any
time as a result of or in connection with the Four County
Landfill; provided however, that the Sullivans and the
Sullivan Trusts (i) shall not have any liability under this
Section 11.2 if there are no claims or demands, or a series of
claims or demands, against Perma-Fix or Chem-Met and/or any
of their officers, directors, employees, agents,
representatives or Affiliates that exceed, in the aggregate,
$900,000 relating to or in connection with the Four County
Landfill, and (ii) the Sullivans and the Sullivan Trusts
liability under this Section 11.2 shall be further limited to
one-half of the amount of the total of any and all claims,
demands, damages, liabilities or obligations of or against
Perma-Fix or Chem-Met or any of their officers, directors,
employees, agents, representatives or Affiliates in excess of
$900,000.00 relating to or in connection with, or arising out
of the Four County Landfill, and any withdrawal by the Indiana
Department of Environmental Management ("IDEM") of IDEM's
approval of the Agreed Order (as defined below) between
Chem-Met, IDEM, Office of the Indiana Attorney General, Four
County Landfill Group and their respective members and the
Four County Landfill Operable Unit #1 RD/RA Group and their
respective members, executed by the parties to the Agreed
Order during February 1999, relating to Chem-Met's settlement
of any and all claims, liabilities or obligations of Chem-Met
relating to or in connection with the Four County Landfill
(the "Agreed Order") as a result of timely comments and
objections filed during the notice and thirty (30) day comment
period contemplated by the Agreed Order. The Sullivans, the
Sullivan Trusts, Perma-Fix and Chem-Met further agree that if
the prior approval by IDEM of the Agreed Order is not
withdrawn within a reasonable period following the expiration
of the notice and thirty (30) day comment period contemplated
by the Agreed Order and the final resolution of any timely
comments or objections submitted or asserted with respect
thereto, the obligation of the Sullivans and the Sullivan
Trusts under this Section 11.2 shall terminate.
<PAGE>
11.3 Notice of Claim. Perma-Fix shall give the Sullivans and the
Sullivan Trusts a written notice (the "Notice of Claim")
within ninety (90) days of the discovery of any matter in
respect of which the right to indemnification contained in
Section 11 can be claimed. Notwithstanding the foregoing,
failure to give such notice will not terminate any obligation
of the Sullivans and the Sullivan Trusts hereunder.
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11.4 Survival of Representations and Remedies. All representations
and warranties contained in this Agreement shall survive the
Closing, regardless of the investigation made by either party
hereto. This Agreement and all covenants and agreements
contained in this Agreement shall survive the Closing.
ARTICLE 12
MISCELLANEOUS
_____________
12.1 Entire Agreement and Amendment. This Agreement and the Chem-Met
Agreement, including the Exhibits and Schedules hereto and thereto,
sets forth the entire agreement and understanding between the parties
and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature among them as to the
subject matter hereof, and no party shall be bound by any
condition, definition, warranty or representation other than
as expressly provided for in this Agreement, the Chem-Met Agreement
or as may be on a date on or subsequent to the date hereof duly set
forth in writing signed by each party which is to be bound thereby.
Unless otherwise expressly defined, terms defined in the
Agreement shall have the same meanings when used in any
Exhibit or Schedule and terms defined in any Exhibit or
Schedule shall have the same meanings when used in the
Agreement or in any other Exhibit or Schedule. This Agreement
(including the Exhibits and Schedules hereto) shall not be
changed, modified or amended except by a writing signed by
each party to be charged and this Agreement may not be
discharged except by performance in accordance with its terms
or by a writing signed by each party to be charged.
12.2 Taxes. Any Taxes in the nature of a sales or transfer tax
(including any realty transfer tax or realty gains transfer
tax), and any stock transfer tax, payable on the consummation
of any other transaction contemplated hereby shall be paid by
the Sullivans and the Sullivan Trusts.
12.3 Governing Law. This agreement shall be construed in
accordance with and governed by the Laws of Delaware, without
regard to the principles of conflicts of laws thereof.
12.4 Benefit of Parties; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
The Agreement may not be assigned by any of the parties hereto
except with the prior written consent of the other parties
hereto. Nothing herein contained shall confer or is intended
to confer on any third party or entity which is not a party to
this Agreement any rights under this Agreement.
12.5 Pronouns. Whenever the context requires, the use in this
Agreement of a pronoun of any gender shall be deemed to refer
also to any other gender, and the use of the singular shall be
deemed to refer also to the plural.
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12.6 Headings. The headings in the sections, paragraphs, Schedules
and Exhibits of this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof. The
words "herein", "hereof", "hereto" and "hereunder", and other
words of similar import refer to this Agreement as a whole and
not to any particular provision of this Agreement.
12.7 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if sent by
registered mail or certified mail, postage prepaid, addressed:
If to Perma-Fix: Perma-Fix Environmental Services, Inc.
1940 Northwest 67th Place
Gainesville, Florida 32653
Attention: President
With a copy to: Irwin H. Steinhorn, Esquire
Conner & Winters
One Leadership Square
211 North Robinson, Suite 1700
Oklahoma City, Oklahoma 73102
If to Chem-Con,
the Sullivans
and the Sullivan
Trusts: Mr. Thomas P. Sullivan
1021 Harvard Road
Grosse Pointe Park, Michigan 48230
With a copy to: Peter E. O'Rourke, Esq.
O'Rourke & Myers
241 Lewiston
Grosse Pointe Farms, Michigan 48236
or to such other address as shall be furnished in writing by
either party. Any such notice or communication shall be
deemed to have been given as of three (3) days after posting,
one (1) day after next day delivery service or upon personal
delivery.
12.8 Time. Time is of the essence of this Agreement.
12.9 Severability. Each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid
under applicable law; but, if any provision of this Agreement
is held to be invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
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<PAGE>
12.10 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one
and the same agreement and shall become effective when
one or more counterparts have been signed by each of
the parties hereto and delivered to each of the other
parties hereto.
12.11 Termination of Previous Agreement as defined in the
seventh WHEREAS clause of this Agreement. Effective
upon the execution of this Agreement, the Agreement and
Plan of Merger is rendered null and void and of no
effect whatsoever and this Agreement is entered into to
replace such Agreement and Plan of Merger in its
entirety.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto execute this
Agreement on the 27th day of May, 1999.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/ Louis Centofanti
_____________________________________
Dr. Louis F. Centofanti
President
CHEMICAL CONSERVATION CORPORATION
By: /s/ Thomas P. Sullivan
_____________________________________
Thomas P. Sullivan
President
CHEMICAL CONSERVATION CORPORATION OF
GEORGIA, INC.
By: /s/ Thomas P. Sullivan
_____________________________________
Thomas P. Sullivan
President
THE THOMAS P. SULLIVAN LIVING TRUST,
Dated September 6, 1978
By: /s/ Thomas P. Sullivan
_____________________________________
Thomas P. Sullivan, Sole Trustee,
under the Thomas P. Sullivan Living
Trust, Dated September 6, 1978, and
any amendments thereto.
<PAGE>
THE ANN L. SULLIVAN LIVING TRUST,
Dated September 6, 1978
By: /s/ Ann L. Sullivan
_____________________________________
Ann L. Sullivan, Sole Trustee under
the Ann L. Sullivan Living Trust,
Dated September 6, 1978, and any
amendments thereto.
THOMAS P. SULLIVAN
By: /s/ Thomas P. Sullivan
_____________________________________
Thomas P. Sullivan, individually
ANN L. SULLIVAN
By: /s/ Ann L. Sullivan
_____________________________________
Ann L. Sullivan, individually
STOCK PURCHASE AGREEMENT
among
PERMA-FIX ENVIRONMENTAL SERVICES, INC.,
CHEM-MET SERVICES, INC.,
THE THOMAS P. SULLIVAN LIVING TRUST,
THE ANN L. SULLIVAN LIVING TRUST,
THOMAS P. SULLIVAN, an individual
and
ANN L. SULLIVAN, an individual
May 27, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.1 "Acquisition" . . . . . . . . . . . . . . . . . . . . .2
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . .2
1.3 "Agreement and Plan of Merger" . . . . . . . . . . . .3
1.4 "Chem-Con". . . . . . . . . . . . . . . . . . . . . . .3
1.5 "Chem-Con Agreement". . . . . . . . . . . . . . . . . .3
1.6 "Chem-Con Acquisition". . . . . . . . . . . . . . . . .3
1.7 "Chem-Fix Settlement Agreement" . . . . . . . . . . . .3
1.8 "Chem-Met Common Stock. . . . . . . . . . . . . . . . .3
1.9 "Chem-Met Intellectual Property Rights" . . . . . . . .3
1.10 "Closing" . . . . . . . . . . . . . . . . . . . . . . .3
1.11 "Closing Date". . . . . . . . . . . . . . . . . . . . .3
1.12 "Code". . . . . . . . . . . . . . . . . . . . . . . . .3
1.13 "Environmental Laws". . . . . . . . . . . . . . . . . .3
1.14 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . .4
1.15 "Facility". . . . . . . . . . . . . . . . . . . . . . .4
1.16 "Four County Landfill". . . . . . . . . . . . . . . . .4
1.17 "GAAP". . . . . . . . . . . . . . . . . . . . . . . . .4
1.18 "Governmental Authority". . . . . . . . . . . . . . . .4
1.19 "Laws". . . . . . . . . . . . . . . . . . . . . . . . .4
1.20 "Liens" . . . . . . . . . . . . . . . . . . . . . . . .4
1.21 "Mineral Rights". . . . . . . . . . . . . . . . . . . .4
1.22 "Permitted Encumbrances". . . . . . . . . . . . . . . .4
1.23 "Perma-Fix Common Stock". . . . . . . . . . . . . . . .4
1.24 "Promissory Note" . . . . . . . . . . . . . . . . . . .4
1.25 "Quanta". . . . . . . . . . . . . . . . . . . . . . . .5
1.26 "Real Property" . . . . . . . . . . . . . . . . . . . .5
1.27 "Returns" . . . . . . . . . . . . . . . . . . . . . . .5
1.28 "Securities Act". . . . . . . . . . . . . . . . . . . .5
1.29 "Shares". . . . . . . . . . . . . . . . . . . . . . . .5
1.30 "SEC" . . . . . . . . . . . . . . . . . . . . . . . . .5
1.31 "Subsidiaries". . . . . . . . . . . . . . . . . . . . .5
1.32 "Taxes" . . . . . . . . . . . . . . . . . . . . . . . .5
1.33 "10 Acre Tract" . . . . . . . . . . . . . . . . . . . .5
ARTICLE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
i
<PAGE>
THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 Acquisition of Chem-Met. . . . . . . . . . . . . . . .5
2.2 Closing. . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
CONSIDERATION FOR SHARES
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
3.1 Purchase Price. . . . . . . . . . . . . . . . . . . . .6
3.2 Exchange of Shares for the Purchase Price . . . . . . .6
ARTICLE 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
REPRESENTATIONS AND WARRANTIES OF THE ALS TRUST,
THE TPS TRUST, ALS, TPS AND CHEM-MET. . . . . . . . . . . . . . .7
4.1 Organization of the Sullivan Trusts . . . . . . . . . .7
4.2 Organization of Chem-Met. . . . . . . . . . . . . . . .7
4.3 Capital Stock of Chem-Met . . . . . . . . . . . . . . .7
4.4 Ownership Interests in Securities . . . . . . . . . . .8
4.5 Financials. . . . . . . . . . . . . . . . . . . . . . .8
4.5.1 Financial Statements . . . . . . . . . . . . . .8
4.5.2 Liabilities. . . . . . . . . . . . . . . . . . .8
4.5.3 Net Worth. . . . . . . . . . . . . . . . . . . .8
4.5.4 Transactions Since September 30, 1998. . . . . .8
4.6 Tax and Other Returns, Reports and Pooling of
Interest. . . . . . . . . . . . . . . . . . . . . . . .9
4.6.1 Tax Returns. . . . . . . . . . . . . . . . . . .9
4.6.2 Payment of Taxes . . . . . . . . . . . . . . . .9
4.6.3 Waiver of Statute of Limitations . . . . . . . .9
4.6.4 Tax Deficiencies . . . . . . . . . . . . . . . .10
4.7 Property. . . . . . . . . . . . . . . . . . . . . . . .10
4.7.1 Assets . . . . . . . . . . . . . . . . . . . . .10
4.7.2 Real Property. . . . . . . . . . . . . . . . . .10
4.7.3 Leases . . . . . . . . . . . . . . . . . . . . .10
4.7.4 Notice . . . . . . . . . . . . . . . . . . . . .10
4.7.5 Personal Property. . . . . . . . . . . . . . . .11
4.7.6 Notice from Insurance Carrier. . . . . . . . . .11
4.8 Intellectual Property . . . . . . . . . . . . . . . . .11
4.8.1 Ownership. . . . . . . . . . . . . . . . . . . .11
4.8.2 No Breach of License . . . . . . . . . . . . . .12
4.8.3 Year 2000 Issues . . . . . . . . . . . . . . . .12
4.9 Agreements, Contracts and Commitments . . . . . . . . .13
4.9.1 Contracts. . . . . . . . . . . . . . . . . . . .13
ii
<PAGE>
4.9.2 Written List . . . . . . . . . . . . . . . . . .14
4.10 No Breach of Statute or Contract; Governmental
Authorizations . . . . . . . . . . . . . . . . . . . . .15
4.10.1 No Violation. . . . . . . . . . . . . . . . . . .15
4.10.2 Permits and Licenses. . . . . . . . . . . . . . .16
4.10.3 Reports . . . . . . . . . . . . . . . . . . . . .16
4.10.4 Violation of Law. . . . . . . . . . . . . . . . .16
4.10.5 Permits under Environmental Laws. . . . . . . . .17
4.10.6 Other Permits . . . . . . . . . . . . . . . . . .17
4.11 No Litigation or Adverse Effects . . . . . . . . . . . .17
4.12 Authorization, Execution and Delivery of Agreement . . .18
4.13 Ability to Conduct the Business. . . . . . . . . . . . .18
4.14 Disclosure . . . . . . . . . . . . . . . . . . . . . . .18
4.15 Broker's or Finder's Fee . . . . . . . . . . . . . . . .18
4.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . .19
4.17 Completeness of Documents -- Chem-Met. . . . . . . . . .19
4.18 Completeness of Documents -- Sullivan Trusts . . . . . .19
4.19 Disposition of Assets. . . . . . . . . . . . . . . . . .19
4.20 Obligations to Employees . . . . . . . . . . . . . . . .20
4.21 Condition of Plant, Machinery and Equipment. . . . . . .21
4.22 Books of Account . . . . . . . . . . . . . . . . . . . .21
4.23 Stock Redemptions. . . . . . . . . . . . . . . . . . . .21
4.24 Minute Books . . . . . . . . . . . . . . . . . . . . . .22
4.25 Indebtedness of Shareholders, etc. . . . . . . . . . . .22
4.26 Business Prospects . . . . . . . . . . . . . . . . . . .22
4.27 Bank Accounts; Powers of Attorney. . . . . . . . . . . .22
4.28 Sensitive Payments . . . . . . . . . . . . . . . . . . .22
ARTICLE 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
ADDITIONAL REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE SULLIVANS AND THE SULLIVAN TRUSTS. . . . . .22
5.1 Restrictions on Certain Actions. . . . . . . . . . . . .22
5.1.1 Prohibition Against Acquisition . . . . . . . . .23
5.1.2 Prohibition Against Solicitation. . . . . . . . .23
5.1.3 Prohibition Against Control . . . . . . . . . . .23
5.2 Attendance . . . . . . . . . . . . . . . . . . . . . . .23
5.3 Confidential Information; Non-compete, and Non-
solicitation . . . . . . . . . . . . . . . . . . . . . .24
5.3.1 Confidentiality . . . . . . . . . . . . . . . . .24
5.3.2 Covenant Not to Compete . . . . . . . . . . . . .24
5.3.3 Agreement Not to Solicit Employees and
Customers . . . . . . . . . . . . . . . . . . . .24
5.4 Specific Enforcement . . . . . . . . . . . . . . . . . .25
ARTICLE 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
iii
<PAGE>
NO SOLICITATION OF TRANSACTIONS . . . . . . . . . . . . . . . . .25
6.1 No Solicitation of Transactions. . . . . . . . . . . . .25
ARTICLE 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
REPRESENTATIONS AND WARRANTIES OF PERMA-FIX . . . . . . . . . . .26
7.1 Organization, etc. . . . . . . . . . . . . . . . . . . .26
7.2 Authorization, Execution and Delivery of Agreement . . .26
7.3 Capital Stock of Perma-Fix . . . . . . . . . . . . . . .26
7.4 SEC Filings. . . . . . . . . . . . . . . . . . . . . . .26
7.4.1. . . . . . . . . . . . . . . . . . . . . . . . . .26
7.4.2. . . . . . . . . . . . . . . . . . . . . . . . . .27
7.4.3 Material Adverse Change . . . . . . . . . . . . .27
7.5 Status of Perma-Fix Common Stock . . . . . . . . . . . .27
7.6 No Breach of Statute or Contract, Governmental
Authorizations . . . . . . . . . . . . . . . . . . . . .27
7.7 No Litigation or Adverse Events. . . . . . . . . . . . .28
7.8 Broker's or Finder's Fees. . . . . . . . . . . . . . . .28
ARTICLE 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
COVENANTS OF CONDUCT AND TRANSACTIONS
PRIOR TO AND AFTER THE CLOSING. . . . . . . . . . . . . . . . . .28
8.1 Investigations; Operation of Business of Chem-Met. . . .28
8.1.1 Access to Premises and Books. . . . . . . . . . .28
8.1.2 Business Organization of Chem-Met . . . . . . . .29
8.1.3 Ordinary Course of Business . . . . . . . . . . .29
8.1.4 Sale of Assets. . . . . . . . . . . . . . . . . .31
8.2 No Selling of Shares or Granting of Options. . . . . . .31
8.3 Consents . . . . . . . . . . . . . . . . . . . . . . . .32
8.4 Governmental Reports . . . . . . . . . . . . . . . . . .32
8.5 Conduct of Business. . . . . . . . . . . . . . . . . . .32
8.6 Governmental Approvals . . . . . . . . . . . . . . . . .32
8.7 Encumber . . . . . . . . . . . . . . . . . . . . . . . .32
8.8 Title Policies for Real Property Owned by Chem-Met . . .32
8.9 Survey . . . . . . . . . . . . . . . . . . . . . . . . .33
8.10 Public Announcements . . . . . . . . . . . . . . . . . .33
8.11 Notification . . . . . . . . . . . . . . . . . . . . . .33
8.12 Filings. . . . . . . . . . . . . . . . . . . . . . . . .34
8.13 Supplemental Disclosure. . . . . . . . . . . . . . . . .34
8.14 SEC Filings. . . . . . . . . . . . . . . . . . . . . . .34
8.15 Listing of Perma-Fix Common Stock. . . . . . . . . . . .34
8.16 Information for SEC Filings. . . . . . . . . . . . . . .34
iv
<PAGE>
8.17 Audited Financial Statements. . . . . . . . . . . . . .34
8.18 Public Disclosure . . . . . . . . . . . . . . . . . . .35
8.19 Letter of Public Accountants. . . . . . . . . . . . . .35
8.20 Liability to Broker . . . . . . . . . . . . . . . . . .36
8.21 Assumption of Tax Liability and Quanta Liability. . . .36
8.22 Access to Premises and Books. . . . . . . . . . . . . .36
8.23 Quanta Merger and Exchange. . . . . . . . . . . . . . .37
8.24 T.A.S. Leasing, Inc . . . . . . . . . . . . . . . . . .38
ARTICLE 9. . . . . . . . . . . . . . . . . . . . . . . . . . . .38
CONDITIONS OF TRANSACTIONS CONTEMPLATED BY AGREEMENT;
ABANDONMENT OF AGREEMENT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
9.1 Closing Conditions of Perma-Fix. . . . . . . . . . . .38
9.1.1 Resolutions of Board of Directors and
Shareholders of Chem-Met. . . . . . . . . . . .38
9.1.2 Delivery of Trust Documents . . . . . . . . . .38
9.1.3 Approval by Lender. . . . . . . . . . . . . . .38
9.1.4 Representations and Warranties of the
Sullivans and the Sullivan Trusts to be True
and Correct and Compliance With Covenants
. . . . . . . . . . . . . . . . . . . . . . . .39
9.1.5 Representations and Warranties of Chem-Met to
be True and Compliance With Covenants . . . . .39
9.1.6 Third Party Consents. . . . . . . . . . . . . .39
9.1.7 No Material Adverse Change. . . . . . . . . . .40
9.1.8 Statutory Requirements; Litigation. . . . . . .40
9.1.9 Opinion of Counsel of Chem-Met, the Sullivans
and the Sullivan Trusts . . . . . . . . . . . .40
9.1.10 Due Diligence . . . . . . . . . . . . . . . . .41
9.1.11 Environmental Audit . . . . . . . . . . . . . .41
9.1.12 Stock Certificates. . . . . . . . . . . . . . .41
9.1.13 Permits . . . . . . . . . . . . . . . . . . . .41
9.1.14 No Liens on Assets. . . . . . . . . . . . . . .41
9.1.15 Listing of Perma-Fix Common Stock . . . . . . .41
9.1.16 Minute Books and Stock Ledgers. . . . . . . . .41
9.1.17 Financial Statements. . . . . . . . . . . . . .42
9.1.18 Title Policies and Surveys. . . . . . . . . . .42
9.1.19 Good Standing Certificates. . . . . . . . . . .42
9.1.20 Resignation of Directors. . . . . . . . . . . .42
9.1.21 Chem-Con Agreement. . . . . . . . . . . . . . .42
9.1.22 Facility Remediation. . . . . . . . . . . . . .42
9.1.23 Settlement of Four County Landfill PRP Claims .42
v
<PAGE>
9.1.24 Settlement of Chem-Fix Claims . . . . . . . . .43
9.1.25 Shareholder Approval. . . . . . . . . . . . . .43
9.1.26 Accountants Letter. . . . . . . . . . . . . . .43
9.1.27 Officer and Director Waiver . . . . . . . . . .43
9.1.28 Quanta Transactions . . . . . . . . . . . . . .43
9.1.29 Fairness Opinion. . . . . . . . . . . . . . . .43
9.1.30 Michigan Strategic Fund . . . . . . . . . . . .43
9.1.31 TAS Lease . . . . . . . . . . . . . . . . . . .44
9.2 Conditions to Obligations of Chem-Met and The TPS
Trust. . . . . . . . . . . . . . . . . . . . . . . . .44
9.2.1 Resolutions of Perma-Fix Board of Directors
and Shareholders. . . . . . . . . . . . . . . .44
9.2.2 Representations and Warranties of Perma-Fix to
be True . . . . . . . . . . . . . . . . . . . .44
9.2.3 No Material Adverse Change. . . . . . . . . . .44
9.2.4 Litigation. . . . . . . . . . . . . . . . . . .45
9.2.5 Opinion of Counsel of Perma-Fix . . . . . . . .45
9.3 Termination of Agreement and Abandonment of Acquisition
. . . . . . . . . . . . . . . . . . . . . . . . . . .45
9.3.1 Conditions. . . . . . . . . . . . . . . . . . .45
9.3.2 Conditions of Perma-Fix Not Met . . . . . . . .45
9.3.3 Termination by Perma-Fix or the Sullivans
under Section 9.3
of the Chem-Con Agreement . . . . . . . . . . .45
9.3.4 Mutual Consent. . . . . . . . . . . . . . . . .45
9.4 Expenses . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE 10. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS . . . . . . 46
10.1 Termination . . . . . . . . . . . . . . . . . . . . . 46
10.2 Waiver. . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE 11. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
INDEMNIFICATION AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . 46
11.1 Indemnification by the Sullivans and the Sullivan
Trusts. . . . . . . . . . . . . . . . . . . . . . . . 46
11.2 Indemnification as to Four County Landfill. . . . . . 47
11.3 Notice of Claim . . . . . . . . . . . . . . . . . . . 48
11.4 Survival of Representations and Remedies. . . . . . . 48
ARTICLE 12. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.1 Entire Agreement and Amendment . . . . . . . . . . . . 48
12.2 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 48
vi
<PAGE>
12.3 Governing Law . . . . . . . . . . . . . . . . . . . . 49
12.4 Benefit of Parties; Assignment. . . . . . . . . . . . 49
12.5 Pronouns. . . . . . . . . . . . . . . . . . . . . . . 49
12.6 Headings. . . . . . . . . . . . . . . . . . . . . . . 49
12.7 Notices . . . . . . . . . . . . . . . . . . . . . . . 49
12.8 Time. . . . . . . . . . . . . . . . . . . . . . . . . 50
12.9 Severability. . . . . . . . . . . . . . . . . . . . . 50
12.10 Counterparts. . . . . . . . . . . . . . . . . . . . . 50
12.11 Termination of Previous Agreement . . . . . . . . . . 50
Schedule "A" - List of all jurisdictions in which Chem-Met is
authorized to do business
Schedule "B" - List of all of Chem-Met's ownership interests
in other business enterprises
Schedule "C" - Liabilities
Schedule "D" - List of all transactions of Chem-Met since
September 30, 1998
Schedule "E" - Tax Returns; Payment of Taxes; Waiver of
Statute of Limitations; Tax Deficiencies
Schedule "F" - List of all Permitted Encumbrances and Liens
on Chem-Met assets; Real Property owned by
Chem-Met; title insurance policies; leases;
Chem-Met personal property; notices of
violations
Schedule "G" - List of all contracts
Schedule "H" - List of contracts, leases, and agreements re
Chem-Met business (copies)
Schedule "I" - Permits and licenses and reports since
December 31, 1990
Schedule "J" - Litigation
Schedule "K" - List of all trade names, trademarks, service
marks, patents, copyrights and applications
Schedule "L" - Insurance
Schedule "M" - Disposition of Assets
Schedule "N" - Determination letters on benefit plans
Schedule "O" - Condition of plant, machinery and equipment
Schedule "P" - Indebtedness of Shareholders
Schedule "Q" - Bank accounts/borrowing resolutions of Chem-
Met; Powers of Attorney
Schedule "R" - Description of Quanta Tract
Schedule "S" - Year 2000 Information
Exhibit "A" - Permitted Encumbrances
Exhibit "B" - Promissory Note
Exhibit "C" - Non-Recourse Guaranty
Exhibit "D" - Mortgage
vii
<PAGE>
<PAGE>
STOCK PURCHASE AGREEMENT
________________________
THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as
of the 27th day of May, 1999, among PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Perma-Fix"); CHEM-MET
SERVICES, INC., a Michigan corporation ("Chem-Met"); 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 ("ALS"). Collectively, the TPS Trust and
the ALS Trust are referred to herein as the "Sullivan Trusts," and
TPS and ALS are collectively referred to as the "Sullivans."
W I T N E S S E T H:
WHEREAS, the TPS Trust is the sole and exclusive owner
of all of the issued and outstanding capital stock of Chem-Met (the
"Chem-Met Common Stock");
WHEREAS, TPS is the sole trustee and primary
beneficiary of the TPS Trust;
WHEREAS, ALS is the sole trustee and primary
beneficiary of the ALS Trust;
WHEREAS, the Sullivans are husband and wife;
WHEREAS, the Board of Directors of Perma-Fix and Chem-
Met deem it advisable and in the best interest of each corporation
and its respective stockholders that Perma-Fix purchase all of the
outstanding capital stock of Chem-Met, in order to advance the
long-term business interest of each corporation;
WHEREAS, the parties previously entered into a certain
"Agreement and Plan of Merger" dated March 15, 1999, among
Perma-Fix; Perma-Met, Inc., a Michigan corporation; Chem-Met; TPS
Trust; ALS Trust; TPS; and ALS, pursuant to which Chem-Met would
merge with and into a wholly-owned subsidiary of Perma-Fix
("Agreement and Plan of Merger");
WHEREAS, due to changing circumstances, the parties
hereto desire that this Agreement serve to amend, restate and
replace the Agreement and Plan of Merger and that the Agreement and
Plan of Merger be considered null and void and of no effect
whatsoever upon execution of this Agreement and that any rights or
duties created under the Agreement and Plan of Merger be discharged
in their entirety as of the execution of this Agreement to be fully
supplanted by the rights and duties created hereunder;
WHEREAS, the parties hereto desire that Perma-Fix
purchase all of the outstanding shares of capital stock of Chem-Met
<PAGE>
pursuant to the terms of this Agreement (the "Acquisition"), and
the parties desire to provide for certain undertakings, conditions,
representations, warranties and covenants in connection with such
transactions contemplated hereby;
WHEREAS, as a necessary and integral part of this
Agreement, the Sullivans, the Sullivan Trusts, Perma-Fix and
Chem-Con (as defined below) have entered into the Chem-Con
Agreement (as defined below), and the closing of the Chem-Con
Agreement as a necessary and integral condition to the execution of
this Agreement and Closing (as defined below) of this Agreement.
WHEREAS, prior to execution of the Agreement, TPS
served as the President of Chem-Met and Chem-Con (as defined
herein);
WHEREAS, TPS possesses extensive knowledge of
Chem-Met's and Chem-Con's affairs;
WHEREAS, in order to induce Perma-Fix to enter into
this Agreement, TPS has agreed to a certain covenant not to compete
and to maintain the confidentiality of information he has received
from Chem-Con and Chem-Met, pursuant to the terms of this
Agreement;
WHEREAS, the Board of Directors of Perma-Fix has
approved and adopted the Acquisition and this Agreement; and
WHEREAS, the Board of Directors and the shareholders
of Chem-Met have approved the execution, delivery and performance
by Chem-Met of this Agreement and the transaction contemplated
thereunder and the obligations of Chem-Met thereunder.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants, agreements, representations and warranties
herein contained, the parties hereto agree as follows:
ARTICLE
1
DEFINITIONS
___________
For purposes of this Agreement, the following terms
shall have the respective meanings set forth below:
1.1 "Acquisition" has the meaning as defined in the eighth WHEREAS
clause of this Agreement;
1.2 "Affiliate" has the meaning set forth in Rule 405 promulgated
under the Securities Act, whether or not such is an Affiliate
now or becomes an Affiliate after the date hereof.
2
<PAGE>
1.3 "Agreement and Plan of Merger" has the meaning as defined in
the sixth` WHEREAS clause of this Agreement;
1.4 "Chem-Con" shall collectively mean Chemical Conservation
Corporation, a Florida corporation ("Chemical Florida"), and
Chemical Conservation of Georgia, Inc., a Georgia corporation
("Chemical Georgia").
1.5 "Chem-Con Agreement" shall mean that certain Stock Purchase
Agreement among Perma-Fix, Chem-Con, the Sullivan Trusts and
the Sullivans, dated as of the date of this Agreement, whereby
Perma-Fix is to purchase all of the outstanding capital stock
of Chemical Florida and Chemical Georgia.
1.6 "Chem-Con Acquisition" shall mean the purchase by Perma-Fix of
all of the capital stock of Chemical Florida and Chemical
Georgia of whatsoever character and description pursuant to
the Chem-Con Agreement.
1.7 "Chem-Fix Settlement Agreement" shall mean that certain
settlement agreement regarding the settlement of the American
Arbitration Association proceeding, No. 54 1990077 92, between
Chem-Fix Technologies, Inc. and Chem-Met.
1.8 "Chem-Met Common Stock" means the Chem-Met common stock, par
value $10.00 per share.
1.9 "Chem-Met Intellectual Property Rights" has the meaning as
defined in Section 4.8.1 of this Agreement.
1.10 "Closing" has the meaning as specified in Section 2.2 hereof.
1.11 "Closing Date" has the meaning as specified in Section 2.2
hereof.
1.12 "Code" means the Internal Revenue Code of 1986, as amended.
1.13 "Environmental Laws" mean all federal, state, county, local
and foreign environmental, health, and safety laws, codes,
ordinances and all rules and regulations promulgated there-
under, including, without limitation, laws relating to
management, emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, air, surface
water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals, petroleum
products or industrial, solid, toxic or hazardous substances
or wastes. Environmental Laws include, without limitation,
(i) the Federal Water Pollution Control Act ("FWPCA"), 33
U.S.C. Section 1251, et seq.; (ii) the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
3
<PAGE>
Section 9601, et seq.; (iii) the Resource Conservation and Recovery
Act ("RCRA"), 42 U.S.C. Section 6901, et seq.; (iv) the Clean Air
Act ("Clean Air Act"), 42 U.S.C. Section 7401, et seq; (v) the Toxic
Substances Control Act ("TSCA"), 15 U.S.C. Section 201, et seq.;
(vi) any and all other analogous state and local statutes;
and, (vii) all rules and regulations promulgated under any of
the foregoing.
1.14 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated
thereunder.
1.15 "Facility" means the Real Property (as defined below) operated
and owned by Chem-Met, located at 18550 Allen Road, Wyandotte,
Michigan, and described in Schedule F attached hereto.
1.16 "Four County Landfill" shall mean that certain landfill
facility located in DeLong, Indiana, known as the "Four County
Landfill Site".
1.17 "GAAP" means United States generally accepted accounting prin-
ciples.
1.18 "Governmental Authority" means any agency, instrumentality,
department, commission, court, tribunal or board of any
government, whether foreign or domestic and whether national,
federal, state, provincial, or local.
1.19 "Laws" mean any and all federal, state and local laws, rules,
regulations, codes, orders, ordinances, judgments, injunctions
and decrees.
1.20 "Liens" mean all security interests, liens, mortgages, claims,
charges, pledges, restrictions, equitable interests,
easements, property rights or encumbrances of any nature.
1.21 "Mineral Rights" mean the mineral and oil and gas rights,
interest and leases, pipelines and pipeline rights of way
situated on and under the Real Property.
1.22 "Permitted Encumbrances" means (i) liens listed on Exhibit "A"
attached hereto; (ii) liens for taxes not yet delinquent or
being contested in good faith by appropriate proceedings; and,
(iii) such technical imperfections of title and easements, if
any, which do not, in the sole discretion of Perma-Fix, when
considered together, detract materially from the value of, or
interfere with, the present or presently proposed use of, any
Real Property.
1.23 "Perma-Fix Common Stock" means the Common Stock, par value
$.001 per share, of Perma-Fix.
1.24 "Promissory Note" has the meaning specified in Section 3.1
hereof.
4
<PAGE>
1.25 "Quanta" means Xbox Corporation, a Michigan corporation
formerly known as Quanta Corporation, of which all of its
issued and outstanding capital stock is owned by the ALS
Trust.
1.26 "Real Property" means all real property, land, buildings,
improvements and structures owned or leased by Chem-Met.
1.27 "Returns" mean all returns, declaration, reports, estimates,
information returns and statements required to be filed with
or supplied to any taxing authority in connection with any
Taxes.
1.28 "Securities Act" means the Securities Act of 1933, as amended.
1.29 "Shares" means all of the issued and outstanding shares of
capital stock of Chem-Met of whatsoever character and
description.
1.30 "SEC" means the U.S. Securities and Exchange Commission.
1.31 "Subsidiaries" means all corporations fifty percent (50%) or
more of the common stock or other form of equity of which
shall be owned, directly or indirectly through one or more
intermediaries, by another corporation.
1.32 "Taxes" mean all taxes, charges, fees, levies or other assess-
ments, including, without limitation, income, gross receipts,
excise, real and personal property, sales, transfer, license,
payroll and franchise taxes, imposed by any Governmental Auth-
ority and shall include any interest, penalties or additions
to tax attributable to any of the foregoing.
1.33 "10 Acre Tract" means that Real Property described on Schedule
R attached hereto.
ARTICLE 2
THE ACQUISITION
_______________
2.1 Acquisition of Chem-Met. Subject to the terms of this
Agreement, at the Closing, the TPS Trust shall, sell, assign,
transfer, and convey to Perma-Fix, and Perma-Fix shall
purchase from the TPS Trust, all of the Shares, free and clear
of any and all Liens, pursuant and subject to the terms of
this Agreement. Chem-Met agrees to the Acquisition and the
Board of Directors and shareholders of Chem-Met have approved
the Agreement and the execution, delivery and performance
thereof by Chem-Met.
2.2 Closing. The closing of the Acquisition (the "Closing") will
take place at 10:00 a.m., Central Standard Time, pursuant to
the terms of this Agreement, on May 27, 1999 (the "Closing
5
<PAGE>
Date") to be specified by Perma-Fix and Chem-Met, which shall
be no later than five business days after the last condition
precedent required by Article 9 is complied with, at the
offices of Conner & Winters, One Leadership Square, 211 North
Robinson, Suite 1700, Oklahoma City, Oklahoma 73102, unless
another date, place or time is agreed to in writing by
Perma-Fix and Chem-Met.
ARTICLE 3
CONSIDERATION FOR SHARES
________________________
3.1 Purchase Price. Subject to, the terms of this Agreement, at
the Closing Perma-Fix shall pay to the TPS Trust the total
consideration of $2,500,000 (the "Purchase Price") for the
Shares, which Purchase Price shall be payable by Perma-Fix to
the TPS Trust at the Closing as follows: (i) $1,000,000, in
cash; and (ii) delivery of a Perma-Fix Promissory Note in the
original principal amount of $1,500,000 ("Promissory Note"),
with such Promissory Note bearing an annual rate of interest
of 5.5% for the first three years and 7% for the remaining two
years, payable in equal monthly installments of principal and
interest of $28,811.80. The Promissory Note shall be in
substantially the same form as attached hereto as Exhibit B.
At the Closing, Chem-Met shall execute (i) a non-recourse
guaranty ("Non-Recourse Guaranty"), a copy of which is
attached hereto as Exhibit C, which Non-Recourse Guaranty will
guarantee Perma-Fix's payment obligations under the Promissory
Note, and (ii) the Mortgage, a copy of which is attached
hereto as Exhibit D (the "Mortgage"), securing Chem-Met's
performance under the Non-Recourse Guaranty.
3.2 Exchange of Shares for the Purchase Price. The procedure for
the TPS Trust exchanging all of the outstanding Shares for
the Purchase Price pursuant to this Agreement is as follows:
at the Closing, the TPS Trust, being the sole beneficial and
record owner of all of the issued and outstanding Shares,
shall deliver to Perma-Fix all certificates representing all
of the issued and outstanding Shares (the "Certificates"),
duly and validly endorsed, in and to Perma-Fix, with
signatures guaranteed by a national bank or investment banking
firm, and, subject to the terms and conditions of this
Agreement, the TPS Trust, being the sole and exclusive holder
of any and all such Certificates shall be entitled to receive
in exchange for all of the Shares the following (i) $1,000,000
in cash, and (ii) the Promissory Note duly executed by
Perma-Fix, pursuant to Section 3.1 hereof.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE ALS TRUST,
THE TPS TRUST, ALS, TPS AND CHEM-MET
________________________________________________
The ALS Trust, the TPS Trust, ALS, TPS, and Chem-Met,
jointly and severally, represent and warrant to Perma-Fix that, as
of the date of this Agreement and as of the Closing, the following:
4.1 Organization of the Sullivan Trusts. The Sullivan Trusts are
valid trusts. ALS is the primary beneficiary under the ALS
Trust, and ALS is the sole trustee under the ALS Trust. TPS
is the primary beneficiary of the TPS Trust, and TPS is the
sole trustee under the TPS Trust. ALS, as sole trustee under
the ALS Trust, and TPS, as sole trustee under the TPS Trust,
have full power, authority and capacity to enter into this
Agreement and to perform any and all obligations and covenants
of the ALS Trust and the TPS Trust under this Agreement.
4.2 Organization of Chem-Met. Chem-Met is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has the
corporate power to own its properties and to carry on its bus-
iness as is now being conducted. Chem-Met is duly qualified
and in good standing as a foreign corporation in each juris-
diction in which the nature of the business conducted by it or
the character of the property owned, leased or used by it
makes such qualification necessary. A list of all such
jurisdictions, separately shown and indicated, is set forth on
Schedule "A" attached hereto.
4.3 Capital Stock of Chem-Met. The authorized capital stock of
Chem-Met consists solely of five thousand (5,000) shares of
Chem-Met Common Stock, of which one hundred (100) shares are
issued and outstanding and all of such issued and outstanding
shares of Chem-Met Common Stock are owned of record and
beneficially by the TPS Trust. No shares of Chem-Met Common
Stock are held in treasury or reserved for issuance at a later
date. All of the issued and outstanding shares of Chem-Met
Common Stock are (i) validly authorized and issued, (ii) fully
paid and nonassessable and (iii) free and clear of any and all
Liens. Subsequent to September 30, 1998, Chem-Met has not
declared or paid any dividend, or declared or made any
distribution on, or authorized the creation or issuance of, or
issued, or authorized or effected any split-up or any other
recapitalization of, any of its capital stock, or directly or
indirectly redeemed, purchased or otherwise acquired any of
their respective outstanding capital stock or agreed to take
any such action. There are no outstanding contractual
obligations of Chem-Met to repurchase, redeem or otherwise
acquire any of its respective outstanding shares of capital
stock. There are no outstanding agreements, options, warrants
or rights to subscribe for or purchase from or otherwise
receive from Chem-Met or the TPS Trust or any other party any
of Chem-Met's capital stock or other securities of any kind or
description of Chem-Met.
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4.4 Ownership Interests in Securities. Set forth on Schedule "B"
attached hereto is a list of all equity or ownership interests
in, and all bonds and debentures of, other business enter-
prises which Chem-Met owns and such Schedule indicates any
such interests which are held subject to any legal, contrac-
tual or other limitations or restrictions on the right to
resell the same.
4.5 Financials.
4.5.1 Financial Statements. Chem-Met has previously furn-
ished Perma-Fix with a true and correct copy of the
audited financial statements of Chemical Florida,
Chemical Georgia, Chem-Met and their Subsidiaries on a
combined basis for the fiscal year ended September 30,
1998 ("Audited Financial Statements"), consisting of,
among other things (i) a balance sheet as of September
30, 1998, and (ii) statement of income and related
earnings for the fiscal year ended September 30, 1998.
The Audited Financial Statements are true, correct and
complete in all material respects and correctly present
the financial conditions and results of operations of
Chemical Florida, Chemical Georgia, Chem-Met and their
Subsidiaries on a combined basis as of the date
thereof. For the purposes of this Agreement, the
Audited Financial Statements shall be deemed to include
any notes to such financial statements. The Audited
Financial Statements have been prepared in conformity
with GAAP, consistently applied throughout the periods
indicated and on a basis consistent with prior periods.
4.5.2 Liabilities. Except as set forth in Schedule "C"
attached hereto, Chem-Met does not have any liabilities
or obligations either accrued, absolute, contingent,
known or unknown, matured or unmatured, or otherwise,
which have not been:
4.5.2.1 reflected in the Audited Financial Statements;
or
4.5.2.2 incurred consistent with past practices of
Chem-Met in the ordinary and normal course of
Chem-Met's business since September 30, 1998.
4.5.3 Net Worth. Except as set forth in Schedule "C"
attached hereto, there are no claims against or liabil-
ities or obligations of, or any legal basis for any
claims against or liabilities or obligations of, Chem-
Met which might result in a material reduction in the
net worth of Chem-Met from that shown in the Audited
Financial Statements or any material charge against net
earnings of Chem-Met.
4.5.4 Transactions Since September 30, 1998. Except as set
forth on Schedule "D", between September 30, 1998, and
the date of this Agreement, Chem-Met has not engaged in
any material transaction not in the ordinary and normal
8
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course of business and, except as set forth on such
Schedule "D", there has not been, occurred or arisen
since September 30, 1998:
4.5.4.1 any material adverse change in the financial
condition or in the operations of the business
of Chem-Met from that shown on the Audited
Financial Statements; or
4.5.4.2 any damage or destruction in the nature of a
casualty loss, or interference with its
business from such loss or from any labor
dispute or court or governmental action, order
or decree, whether covered by insurance or
not, materially and adversely affecting the
properties or business of Chem-Met; or
4.5.4.3 any increase, except increases given in
accordance with prior practice, in the com-
pensation payable or to become payable by
Chem-Met to any of Chem-Met's employees or any
increase in the benefits, regardless of
amount, in any bonus, insurance, pension or
other plan, program, payment or arrangement
with respect to employee benefits made to, for
or with any officers or employees; or
4.5.4.4 any extraordinary loss (as defined in Opinions
No. 9 and No. 30 of the Accounting Principles
Board of American Institute of Certified
Public Accountants) suffered by Chem-Met which
is material to Chem-Met, or any waiver by
Chem-Met of any rights which are material to
Chem-Met.
4.6 Tax and Other Returns, Reports and Pooling of Interest.
4.6.1 Tax Returns. All federal, state, local, foreign,
personal property, and real property tax returns
required to be filed by the TPS Trust and Chem-Met have
been timely filed with the appropriate governmental
agencies in all jurisdictions in which such returns and
reports are required to be filed.
4.6.2 Payment of Taxes. All federal, state, local and
foreign taxes (including interest and penalties), due
from the TPS Trust and Chem-Met (i) have been fully
paid, or (ii) are being contested in good faith by
appropriate proceedings and are disclosed on Schedule
"E" attached hereto.
4.6.3 Waiver of Statute of Limitations. No waivers of
statutes of limitation in respect of any Returns or tax
reports have been given or requested, except as shown
on such Schedule "E".
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<PAGE>
4.6.4 Tax Deficiencies. There are no potential tax defic-
iencies which may arise from issues which have been
raised or which have not yet been raised but which
might reasonably be expected to be raised by the
Internal Revenue Service ("IRS") or any other taxing
authority that have not been disclosed on Schedule "E"
and may reasonably be expected to have a material
adverse effect on Chem-Met
4.7 Property.
4.7.1 Assets. Except as disclosed in Schedule F attached
hereto: Chem-Met owns and has good and marketable title
in and to all of the assets used by it in the operation
or conduct of its business, or required by Chem-Met for
the normal and ordinary conduct of their business, free
and clear of any and all Liens, except for Permitted
Encumbrances.
4.7.2 Real Property. Schedule "F" attached hereto lists all
Real Properties owned by Chem-Met. Chem-Met has good
and marketable title in fee simple to all of the Real
Property owned by it, free and clear of any and all
Liens, except for Permitted Encumbrances, and have
access thereto such as is reasonable to permit the
present or presently proposed use of any such
properties. Schedule "F" indicates which of the pro-
perties listed is covered by a title insurance policy
and a description of each such title insurance policy
is set forth on Schedule "F". The Real Property owned
by Chem-Met contains no encroachments on abutting pro-
perty, public or private, and no material encroachments
by others on either of their properties. Chem-Met owns
all of the Mineral Rights under the Real Property owned
by them.
4.7.3 Leases. Schedule "F" sets forth a true and complete
list of each lease of real or personal property exe-
cuted by or binding upon Chem-Met, as lessee, sub-
lessee, tenant or assignee setting forth in each case
a brief description of the property covered by the
lease, the rental and the terms thereunder. Each lease
is in full force and effect, without any default or
breach thereof by any party thereto. No consent of any
landlord, lessor or any other party is required under
any such lease to keep such lease in full force and
effect without being terminable or in default after the
execution and delivery of this Agreement and consum-
mation of the transactions contemplated by this Agree-
ment. True and complete copies of all leases required
to be listed on Schedule "F", including all amendments,
addenda, waivers and all other binding documents, have
heretofore been delivered to Perma-Fix.
4.7.4 Notice. Except as set forth on Schedule "F", none of
Chem-Met, any of the Sullivan Trusts nor any of the
Sullivans has received actual or constructive notice
of any violation of any zoning, use, occupancy, build-
ing, or environmental statute, ordinance, regulation,
order, or other law or requirement affecting or
relating to any activities performed at any time on any
Real Property. None of the Sullivan Trusts, the
Sullivans nor Chem-Met has any knowledge of any past,
present, or future events, conditions, circumstances,
activities, incidents, actions, or plans that may in
any way interfere with or limit the continued use of
said Real Property for all present or presently
proposed use of said Real Property.
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<PAGE>
4.7.5 Personal Property. Chem-Met owns the full right and
interest and has good and marketable title in and to
all material personal and intangible property used by
Chem-Met in the conduct of Chem-Met's business and none
of such personal and intangible property is subject (i)
to any contracts of sale, or (ii) to any Liens, except
for Permitted Encumbrances.
4.7.6 Notice from Insurance Carrier. None of the Sullivans,
the Sullivan Trusts, nor Chem-Met has received any
notice of, or writing referring to, any requirements or
recommendations by any insurance company which has
issued a policy covering any part of the Real Property
requiring or recommending any repairs or work or other
action being taken on any part of the Real Property,
except as otherwise disclosed in Schedule "F". All
utilities required for the operation of the Real
Property in the manner currently operated by Chem-Met
are installed and operating, and all installation and
connection charges have been paid in full or provided
for.
4.8 Intellectual Property.
4.8.1 Ownership. Schedule "K" attached hereto is a true and
complete list of all patents, trademarks, trade names,
service marks, copyrights, web domain addresses, mask
works, any applications for and registrations of such
patents, trademarks, trade names, service marks,
copyrights, mask works, web domain addresses, and all
processes, formulae, methods, schematics, technology,
know-how, computer software programs or applications
and tangible or intangible proprietary information or
material that Chem-Met is licensed or otherwise
possesses legally enforceable rights to use and are
necessary to conduct the business of Chem-Met as currently
conducted, or planned to be conducted, the absence of which would
be reasonably likely to have a material adverse effect upon Chem-Met
(the "Chem-Met Intellectual Property Rights"). None of the
Chem-Met Intellectual Property Rights is subject to any outstand-
ing order, judgment, decree, stipulation, or agreement restricting
the use of such Chem-Met Intellectual Property Rights, and to the
best of their knowledge none infringes on, or is being infringed
by, other intellectual property rights of any other person or
entity. Chem-Met has promulgated and used commercially
reasonable efforts to enforce and maintain any
reasonably necessary trade secret or confidentiality
measures regarding the Chem-Met Intellectual Property
Rights. Chem-Met has not given and is not bound by an
agreement or indemnification regarding Chem-Met
11
<PAGE>
Intellectual Property Rights in connection with any
property or service produced, used or sold by Chem-Met.
4.8.2 No Breach of License. Neither the TPS Trust nor Chem-
Met is, or will as a result of the execution and
delivery of this Agreement or the performance of their
respective obligations under this Agreement or
otherwise be, in breach of any license, sublicense or
other agreement relating to the Chem-Met Intellectual
Property Rights, or any material licenses, sublicenses
and other agreements as to which Chem-Met is a party
and pursuant to which Chem-Met is authorized to use any
third party patents, trademarks or copyrights ("Chem-
Met Third Party Intellectual Property Rights"),
including software which is used in the manufacture of,
incorporated in, or forms a part of any product sold or
services rendered by or expected to be sold or services
rendered by Chem-Met, the breach of which would be
reasonably likely to have a material adverse effect
upon Chem-Met, except as disclosed in Schedule "K"
hereof.
4.8.3 Year 2000 Issues. Schedule "S" hereof identifies each
"Year 2000" audit, report or investigation that has
been performed by or on behalf of Chem-Met with respect
to its business and operations, and Chem-Met has
provided to Perma-Fix true and correct copies of all
such audits, reports or investigations. Except as set
forth in such audits, reports and investigations,
neither the Sullivans, the Sullivan Trusts nor Chem-Met
are aware of any failure to be Year 2000 Compliant of
(i) any software products sold or licensed by Chem-Met
to third parties or (ii) any computer software products
used by or licensed to Chem-Met from third parties for
internal use by Chem-Met. For purposes of this
Agreement, "Year 2000 Compliant" means, with respect to
each software product referred to in the prior
sentence, that such system (i) will accurately receive,
record, store, provide, recognize and process all date
and time data from, during, into and between the
twentieth and twenty-first centuries; (ii) will
accurately perform all date-dependent calculations and
operations (including, without limitation, mathematical
operations, sorting, comparing and reporting) from,
during, into and between the twentieth and twenty-first
centuries; and (iii) will not malfunction, cease to
function or provide invalid or incorrect results as a
result of (x) the change of century, (y) date data,
including date data which represents or references
different centuries or more than one century or (z) the
occurrence of any particular date; in each case without
human intervention, other than original data entry;
provided, in each case, that all applications, hardware
and other systems used in conjunction with such system
which are not owned or licensed by Chem-Met correctly
exchange date data with or provide data to such system.
Chem-Met has not provided any guarantee or warranty for
any product sold or licensed, or services provided, by
Chem-Met to the effect that such product or service (i)
complies with or accounts for the fact of the arrival
of the year 2000 or (ii) will not be adversely affected
with respect to functionality, operability, performance
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<PAGE>
or volume capacity (including without limitation the
processing and reporting of data) by virtue of the
arrival of the year 2000. Chem-Met has performed
audits regarding its primary suppliers, customers,
creditors and financial service organizations with
which they have substantial interaction ("Outside
Persons") and has determined that all of these Outside
Persons are substantially Year 2000 Compliant to the
extent that there will be no material adverse effects
to Chem-Met resulting from a failure of such Outside
Persons to be Year 2000 Compliant. In addition,
Schedule "S" shall set forth in detail the status of
Chem-Met's efforts to address the Year 2000 issues
relating to Chem-Met and such Outside Persons.
4.9 Agreements, Contracts and Commitments.
4.9.1 Contracts. Except as set forth on Schedule "G", Chem-
Met is not a party to or bound by:
4.9.1.1 any collective bargaining agreements or any
agreements that contain any severance pay
liabilities or obligations;
4.9.1.2 any bonus, deferred compensation, pension,
profit-sharing or retirement plans, programs
or other similar employee benefit arrange-
ments;
4.9.1.3 any employment agreement, contract or commit-
ment with an employee;
4.9.1.4 any agreement of guaranty or indemnification
running from Chem-Met to any person or entity,
including, but not limited to, any Affiliate,
other than guarantees or indemnifications
issued in the ordinary course of Chem-Met's
business relating solely to indemnification of
certain of its customers due to Chem-Met's
disposal of waste generated by such customers
at permitted disposal facilities not
affiliated with Chem-Met;
4.9.1.5 any agreement, contract or commitment which
would reasonably be expected to have a
material adverse impact on the business of
Chem-Met;
4.9.1.6 any agreement, indenture or other instrument
which contains restrictions with respect to
payment of dividends or any other distribution
in respect of Chem-Met or any other
outstanding securities of Chem-Met;
13
<PAGE>
4.9.1.7 any agreement, contract or commitment con-
taining any covenant limiting the freedom of
Chem-Met to engage in any line of business or
compete with any person;
4.9.1.8 any agreement, contract or commitment relating
to capital expenditures in excess of ten
thousand dollars ($10,000.00) and involving
future payments;
4.9.1.9 any agreement, contract or commitment relating
to the acquisition of assets or capital stock
of any business enterprise;
4.9.1.10 any contract with the Department of
Defense or any other department or agency
of the United States Government, or to
any subcontract under any such contract,
which is subject to renegotiation under
the Renegotiation Act of 1951, as
amended; or
4.9.1.11 any agreement, contract or commitment not
made in the ordinary course of business
which involves Ten Thousand Dollars
($10,000) or more or has a remaining term
of one (1) year or more from December 31,
1998, or is not cancelable on thirty (30)
days or less notice without penalty.
Chem-Met has not breached, and there is
not any claim, or, to the best of Chem-
Met's or the Sullivans or the Sullivan
Trusts' knowledge, any claim that Chem-
Met has breached any of the terms or
conditions of any agreement, contract or
commitment set forth in this Agreement or
in any of the Schedules attached hereto
or of any other agreement, contract or
commitment, if any such breach or
breaches in the aggregate could result in
the imposition of damages or the loss of
benefits in an amount or of a kind
material to Chem-Met.
4.9.2 Written List. Attached hereto as Schedule "H" is a
written list of all contracts, leases, agreements and
instruments which are in any single case of material
importance to the conduct of the business of Chem-Met,
together with true and correct copies of each document
requested by Perma-Fix and a written description of
each oral arrangement so listed. Without limiting the
generality of the foregoing, the aforesaid list
includes all the contracts, agreements and instruments
of the following types to which Chem-Met is a party, or
by which it is bound (without regard to whether such
contracts, agreements and instruments are material):
4.9.2.1 leases of, and contracts for, the purchase or
sale of Real Property;
14
<PAGE>
<PAGE>
4.9.2.2 labor union contracts together with a list of
all labor unions representing or, to their
best knowledge, attempting to represent
employees of Chem-Met;
4.9.2.3 pension, retirement, profit-sharing, bonus,
stock purchase, stock option, hospitalization
or insurance plans (and certificates or other
documents issued thereunder) or vacation pay,
severance pay and other similar benefit
arrangements for officers, directors,
employees or agents;
4.9.2.4 employment contracts or agreements, contracts
with other persons engaged in sales or service
activities, advertising contracts and
brokering contracts which are not terminable
by Chem-Met without liability upon termination
notice of thirty (30) days or less;
4.9.2.5 written or oral agreements, understandings and
arrangements with officers, directors,
employees, shareholders, agents, or Affiliates
of Chem-Met, the Sullivans or the Sullivan
Trusts relating to present or future compensa-
tion of, or other benefits available to, such
persons;
4.9.2.6 contracts, and other arrangements of any kind,
whether oral or written, with any director,
officer, employee, trustee, stockholder or
Affiliate of Chem-Met, the Sullivans or the
Sullivan Trusts or to which any director,
officer, employee or Affiliate of Chem-Met is
a party;
4.9.2.7 contracts, purchase orders and other arrange-
ments of any nature involving an expenditure
of Five Thousand Dollars ($5,000.00) or more
not made in the ordinary course of business or
which involve an unperformed commitment, under
contracts not otherwise disclosed hereunder,
in excess of Twenty-Five Thousand Dollars
($25,000.00); and
4.9.2.8 indentures, loan agreements, notes, mortgages,
conditional sales contracts, and other
agreements for financing.
4.10 No Breach of Statute or Contract; Governmental Authorizations.
4.10.1 No Violation. Neither the execution and delivery of
this Agreement by Chem-Met, the Sullivans or the
Sullivan Trusts nor the performance or compliance by
the Chem-Met, the Sullivans or the Sullivan Trusts with
any of the terms and provisions of this Agreement will
violate any Laws of any governmental agency or auth-
15
<PAGE>
ority, domestic or foreign, or will at the Closing con-
flict with or result in a breach of any of the terms,
conditions or provisions of any judgment, order,
injunction, decree or ruling of any court or
governmental agency or authority, domestic or foreign,
to which any of Chem-Met, the Sullivans or the Sullivan
Trusts may be subject to, or bound by, or of any
agreement or instrument to which Chem-Met, the
Sullivans or the Sullivan Trusts is a party or by which
any of them is bound, or constitute a default there-
under, or result in the creation of any Liens upon the
Chem-Met Common Stock or any of the property or assets
of Chem-Met, or cause any acceleration of maturity of
any obligation or loan, or give to others any interest
or rights, including rights of termination or cancella-
tion, in or with respect to any of the properties,
assets, agreements, contracts, or business of Chem-Met,
the Sullivans or the Sullivan Trusts or cause any
acceleration or termination or cancellation, in or with
respect to any of the properties, assets, agreements,
contracts or business of Chem-Met, the Sullivans or the
Sullivan Trusts.
4.10.2 Permits and Licenses. Schedule "I" attached hereto is
a true and complete list of all permits, licenses and
franchises presently held by, or used in connection
with, the normal and ordinary business of Chem-Met and
all applications for any of the foregoing filed by
Chem-Met, the Sullivans or the Sullivan Trusts
relating to the business of Chem-Met with any
Governmental Authority. All permits, licenses and
franchises used by Chem-Met to conduct Chem-Met's
business are in the name of Chem-Met none are in the
name of any other party.
4.10.3 Reports. Schedule "I" is a true and complete list of
all reports made by, or with respect to Chem-Met, the
Sullivans or the Sullivan Trusts since September 30,
1998, except as otherwise furnished pursuant to this
Agreement, to or from the Federal Trade Commission
("FTC"), Environmental Protection Agency ("EPA"), Equal
Employment Opportunity Commission ("EEOC"), reports
under the Occupational Safety and Health Act ("OSHA"),
the Department of Labor, Michigan Department of
Environmental Quality and all other state or federal
government agencies or departments, and tax returns to,
tax rulings from, and tax audit reports from the IRS,
relating in any manner to the business of Chem-Met.
4.10.4 Violation of Law. Except as disclosed in Schedule "I",
none of Chem-Met, the Sullivans nor the Sullivan Trusts
is in violation of any Laws, (including, but not
limited to, Environmental Laws), which violation might
have a material adverse effect on Chem-Met or the
business of Chem-Met or the financial condition or
operations of Chem-Met, and none of the Real Property
owned or leased by Chem-Met is contaminated or requires
remediation of any kind as a result of being
contaminated.
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4.10.5 Permits under Environmental Laws. Chem-Met has
obtained, presently holds and has adhered to all
permits, licenses, and other authorizations required
under federal, state, and local laws (including, but
not limited to, any and all Environmental Laws), (i)
which are necessary for, or material to, the conduct of
Chem-Met's business as such business is currently being
operated, including, but not limited to, any and all
permits and licenses required under the Environmental
Laws for Chem-Met to conduct Chem-Met's business as
currently conducted, and (ii) such other permits,
licenses and other authorizations relating to pollution
or protection of the environment, including, without
limitation, laws relating to emissions, discharges,
releases or threatened releases of pollutants, contam-
inants (chemicals or industrial or toxic wastes into
the environment including, without limitation, ambient
air, surface waste, groundwater, soil or land), or
otherwise relating to the manufacture, processing,
recycling, reclamation, distribution, use, treatment,
storage, disposal, transport, or handling of pollut-
ants, contaminants, chemicals, petroleum products, or
industrial or solid or toxic wastes or radioactive
materials, except as disclosed in Schedule I attached
hereto. Chem-Met is in compliance with all terms and
conditions of all such required permits, licenses and
other authorizations, and with all other limitations,
restrictions, conditions, standards, prohibitions, re-
quirements, obligations, schedules, and timetables
contained in such Environmental Laws, except as
disclosed in Schedule I attached hereto. None of Chem-
Met, the Sullivans nor the Sullivan Trusts after due
inquiry, has any knowledge of any past, present, or
future events, actions, or plans that may interfere
with or prevent full compliance or continued full com-
pliance as described above, or that may give rise to
any common law or legal liability or otherwise form the
basis of any claim, action, demand, suit, proceeding,
hearing, study, or investigation related to the
manufacture, processing, recycling, reclamation,
distribution, use, treatment, storage, disposal,
transport or threatened release of, any pollutant,
contaminant, chemical or industrial or solid or toxic
waste or radioactive materials.
4.10.6 Other Permits. Except as set forth in Schedule "I",
neither the execution and delivery of this Agreement
nor the consummation thereof will violate any of the
terms of any of the permits, licenses, approvals and
authorities held by Chem-Met or cause the termination
or cancellation of any of the permits, licenses,
approvals and authorities held by Chem-Met. None of
Chem-Met, the Sullivans nor the Sullivan Trusts has
received official notice that Chem-Met is in violation
of any law, regulation, ordinance or rule applicable to
them or their operations.
<PAGE>
4.11 No Litigation or Adverse Effects. Except as set forth in
Schedule "J", there is no suit, action or legal, administra-
tive, arbitration, or other proceeding, or governmental
investigation, or any change in the zoning, use, occupancy or
building ordinances affecting the real property or any lease-
hold interests of Chem-Met pending or, to the best of their
knowledge threatened, which could adversely affect the
financial condition, results of operations or business, assets
17
<PAGE>
or properties of Chem-Met, or the conduct of business of Chem-
Met. Further, there is no suit, action or legal,
administrative, arbitration, governmental investigation or
other proceeding against Chem-Met, or to the best of their
knowledge threatened, involving any claims based upon negli-
gence, product warranties, product liability or any other type
of claim (including, but not limited to, those arising under
any Environmental Laws) exceeding potential liability
(including costs of defense and attorneys' fees), whether or
not covered by insurance, in an amount in excess of Ten
Thousand Dollars ($10,000.00) with respect to the individual
suit, action, proceeding or investigation, or potential
liability (including costs of defense and attorneys' fees) of
Twenty-Five Thousand Dollars ($25,000.00) in the aggregate of
all such suits, actions, proceedings or investigations, except
(a) workers' compensation, automobile accident and other
routine claims wholly covered by existing insurance (including
costs of defense and attorneys' fees) and (b) as set forth in
Schedule "J" hereto.
4.12 Authorization, Execution and Delivery of Agreement. Each of
Chem-Met, the Sullivans and the Sullivan Trusts has the power,
authority and capacity to enter into this Agreement and to
carry out the transactions contemplated hereby. The
execution, delivery and the performance of this Agreement by
Chem-Met, the Sullivans and the Sullivan Trusts have been duly
and validly authorized and approved by all requisite corporate
action on the part of Chem-Met and all requisite action of the
trustees under the Sullivan Trusts, and this Agreement
constitutes the valid and binding agreement and obligation of
Chem-Met, the Sullivans and the Sullivan Trusts enforceable in
accordance with its terms, subject to bankruptcy, insolvency
and other laws of similar import.
4.13 Ability to Conduct the Business. None of Chem-Met, the
Sullivans nor the Sullivan Trusts is subject to, or bound by,
any judgment, order, writ, injunction or decree of any court
or of any governmental body or agency or of any arbitrator
which could prevent the execution, delivery or performance of
this Agreement or the use by Chem-Met of assets owned, leased
or used by Chem-Met, or the conduct of Chem-Met's business, as
presently conducted by Chem-Met, in accordance with present
practices, after the Closing. None of Chem-Met, the Sullivans
nor the Sullivan Trusts is a party to, bound by, or a bene-
ficiary of, any agreement which could prevent the use of
assets material to Chem-Met or the conduct of business as
currently conducted by Chem-Met in each case after the
Closing.
4.14 Disclosure. No representation or warranty by Chem-Met, the
Sullivans or the Sullivan Trusts contained in this Agreement
and no statement contained in any certificate, list,
disclosure schedule, exhibit or other instrument furnished, or
to be furnished, to Perma-Fix pursuant hereto, contains or
will contain any untrue statement of a material fact or omits,
or will omit, to state a material fact necessary to make the
statements contained therein not misleading.
4.15 Broker's or Finder's Fee. No agent, broker, person or firm
acting on behalf of Chem-Met, the Sullivans and/or the
Sullivan Trusts or under the authority of Chem-Met, the
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Sullivans and/or the Sullivan Trusts is or will be entitled to
any commission or broker's or finder's fee from any of the
parties hereto in connection with this Agreement or any of the
transactions contemplated herein, except the Sullivans have
retained WHCA Partners as an agent or firm acting on behalf of
the Sullivans and the Sullivan Trusts in connection with this
Agreement and the transactions contemplated herein. The
Sullivans and the Sullivan Trusts shall pay to WHCA Partners
any and all fees and other remuneration due to WHCA Partners
in connection with this Agreement and the transactions
contemplated by this Agreement. Chem-Met shall pay any
expenses to WHCA Partners for work performed by WHCA Partners
on behalf of Chem-Met prior to November 5, 1998; provided
however, Chem-Met shall not pay any commissions or fees due to
WHCA Partners in connection with this Agreement or the
transactions contemplated by this Agreement.
4.16 Insurance. Chem-Met has in full force and effect policies of
insurance of the types, including insurance policies under
which Chem-Met officers, directors and Affiliates or any of
them, in such capacity, is named insured, and in the amounts
and with insurance carriers as set forth in Schedule "L"
attached hereto, and will continue all of such insurance in
full force and effect up to and until the Closing. The
amounts and types of such insurance policies and the insurance
carriers issuing such policies fully meet Chem-Met's
contractual, legal or regulatory commitments and are fully
adequate to insure against risks to which Chem-Met is normally
exposed in the operation of its businesses and as required by
Governmental Authority and the Environmental Laws.
4.17 Completeness of Documents -- Chem-Met. The copies of the
Articles of Incorporation and Bylaws of Chem-Met, and of all
leases, instruments, agreements or other documents (including
all Schedules and documents delivered pursuant to this
Agreement) which have been or will be delivered to Perma-Fix
pursuant to the terms of this Agreement or in connection with
the transactions contemplated hereby, are, or if not now
delivered, will when delivered, be true, complete and correct.
4.18 Completeness of Documents -- Sullivan Trusts. The copies of
the organizational documents of the Sullivan Trusts, which
have been or will be delivered to Perma-Fix pursuant to the
terms of this Agreement or in connection with the transactions
contemplated hereby, are, or if not now delivered, will when
delivered, be true, complete and correct.
4.19 Disposition of Assets. Since September 30, 1998, Chem-Met has
not made any sale or other disposition of any of their
properties or assets or surrendered any of their rights with
respect thereto, or made any additions to their properties or
assets, or entered into any agreements, or entered into any
other transaction, except in each instance in the ordinary
course of business or as set forth in Schedule "M" attached
hereto, and no such sale, disposition, surrender, addition,
agreement or transaction set forth in such Schedule "M" has
any material adverse effect upon the results of operations or
financial condition of Chem-Met or Chem-Met's ability to
conduct Chem-Met's business as currently conducted.
19
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4.20 Obligations to Employees. All obligations of Chem-Met and/or
any of its Affiliates, whether arising by operation of law,
contract, agreement, or otherwise, for payments to trusts or
other funds or to any governmental agency or to any employees,
directors, officers, agents, or any other individual (or any
of their respective heirs, legatees, beneficiaries, or legal
representatives) with respect to profit-sharing, pension or
retirement benefits, or any other employee benefit of any kind
whatsoever relating to Chem-Met or any of its employees, have
been paid. All legally enforceable obligations of Chem-Met,
whether arising by operation of law, contract, agreement, or
otherwise, for bonuses or other forms of compensation or
benefits which are, or may become, payable to its employees,
directors, officers, agents, or any other individual (or their
respective heirs, legatees, beneficiaries or legal
representative) relating to Chem-Met or any of the employees
of Chem-Met with respect to periods ending on or before the
Closing have been paid, or adequate accruals for payment
thereof are reflected on the Audited Financial Statements.
Neither Chem-Met nor any of its Affiliates has any accumulated
funding deficiencies, as such term is defined in the Employee
Retirement Income Security Act of 1974 ("ERISA") and in the
Code with respect to any employee benefit plan as defined in
ERISA maintained or established for employees of Chem-Met.
Chem-Met has not incurred any liability to the Pension Benefit
Guaranty Corporation ("PBGC") other than for the payment of
insurance premiums all of which have been paid when due, the
IRS or the Department of Labor ("DOL") with respect to any
such employee benefit plan that affects, or might affect Chem-
Met, and does not have any withdrawal liability with respect
to any multiemployer pension plan ("Multiemployer Plan") which
is subject to the Multiemployer Pension Plan Amendments Act of
1980. The consummation of this Agreement will not result in
either a complete or partial withdrawal from any of the
Multiemployer Plans. All of the employee benefit plans of
which Chem-Met or any Affiliate of Chem-Met is the plan
sponsor relating to Chem-Met or any of their employees have
been amended as, when and to the extent necessary to comply
with and qualify under the applicable provisions of the Code;
and all such employee benefit plans have been administered in
accordance with the applicable provisions of the Code and
ERISA. Except as indicated on Schedule "N", any employee
benefit plans relating to Chem-Met or any of their employees
which are pension benefit plans have received, or have applied
for and expect to receive, determination letters from the IRS
to the effect that such plans are qualified and exempt from
federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, and, no amendments have been made to any such
employee benefit plans other than those covered by such
determination letters or applications for such determination
letters with respect to such amendments which have been timely
filed with the IRS. No determination letter received with
respect to any employee benefit plan relating to Chem-Met or
any of its employees has been revoked nor has revocation been
threatened. Each of the employee benefit plans have been
administered at all times and in all respects in accordance
with their respective terms. There are no pending
investigations by any Governmental Authority involving any
employee benefit plans relating to Chem-Met or any of its
employees, no deficiency or termination proceedings involving
such employee benefit plans, and no threatened or pending
claims (except for claims for benefits payable in the normal
operation of the employee benefit plans), suits or proceedings
20
<PAGE>
against any such employee benefit plan or asserting any
rights or claims to benefits under any such employee benefit
plan nor are there any facts which could give rise to any
liability in the event of any such investigation, claim, suit
or proceeding. Neither the employee benefit plans nor any
trusts created thereunder relating to Chem-Met or to any of
their employees, nor any trustee, administrator or other
fiduciary thereof, has engaged in a "prohibited transaction"
(as such term is defined in Section 4975 of the Code or Section 406 of
the ERISA); and has not experienced any reportable event within
the meaning of ERISA or other event or condition which
presents a material risk of termination of any such employee
benefit plan by the PBGC, has had any tax imposed upon it by
the IRS for any alleged violation under Section 4975 of the Code, or
has engaged in any transaction which might subject Chem-Met or
any such employee benefit plan to any liability for such tax.
The terms of any such employee benefit plans comply with ERISA
and the Code in all respects, and, any and all reporting and
disclosure requirements of ERISA or the Code and the DOL with
respect to any such employee benefit plan have been timely
met. The information supplied to the actuary by Chem-Met, the
Sullivans or the Sullivan Trusts for use in preparing those
reports was complete and accurate and none of Chem-Met, the
Sullivans nor the Sullivan Trusts has reason to believe that
the conclusions expressed in such reports are incorrect. In
the event of termination of any employee benefit plan of Chem-
Met or any of its Affiliates relating to Chem-Met or to any of
their employees, there will be no liability of Chem-Met or the
plan with respect to the providing of benefits accrued
thereunder subject to future variations in levels of
compensation assuming continued investment returns at rates
actuarially predicted. Further, if termination (whether
complete or partial) of any plan has occurred, then, all
liabilities with respect thereto have been satisfied in full
and no present liability exists with respect to any such prior
termination. Schedule "N" also includes a list of any and all
pension or benefit obligations of Chem-Met and/or its
Affiliates which have not been fully funded.
4.21 Condition of Plant, Machinery and Equipment. Except as set
forth on Schedule "O", all of the items of the property, plant
and equipment owned, operated or leased by Chem-Met is, in all
material respects, in good condition and repair, reasonable
wear and tear excepted, and Chem-Met agrees to maintain such
items in good operating condition until the Closing. Casualty
losses to such property, plant and equipment are covered by
insurance with normal industry deductibles being applicable.
4.22 Books of Account. Chem-Met has maintained its books of
account in accordance with GAAP, applied on a consistent basis
with prior periods.
4.23 Stock Redemptions. There are no shares of Chem-Met Common
Stock which are subject to redemption or purchase in lieu of
redemption, which prior to September 30, 1998, were not paid
for in full. From September 30, 1998, through the date of
this Agreement, Chem-Met has not purchased or redeemed or
entered into any agreement to purchase or redeem any Chem-Met
Common Stock.
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4.24 Minute Books. Chem-Met have maintained their corporate minute
books and all such books are current.
4.25 Indebtedness of Shareholders, etc. Except as set forth on
Schedule "P", none of the shareholders, Affiliates, officers,
directors or employees of Chem-Met is (i) indebted to Chem-
Met, and Chem-Met is not indebted to their Affiliates, share-
holders or any of their officers, directors or employees, (ii)
a party to or has any interest in a material contract, agree-
ment or lease with Chem-Met or in which Chem-Met is a party to
or bound by, or (iii) a customer or supplier of Chem-Met,
which during any one of the preceding three (3) years supplied
to or purchased from Chem-Met a amount of property or services
exceeding Ten Thousand Dollars ($10,000.00) in any one (1)
year.
4.26 Business Prospects. Since September 30, 1998, there has not
occurred any event or other occurrence which might have a
material adverse effect on the business or business prospects
of Chem-Met.
4.27 Bank Accounts; Powers of Attorney. Schedule "Q" attached
hereto sets forth each bank account and borrowing resolution
authorizing officers or agents of Chem-Met to borrow money and
lists the persons authorized to transact business on behalf of
Chem-Met with respect to each such account or borrowing reso-
lution. Schedule "Q" also lists all powers of attorney
granted by Chem-Met to any other person.
4.28 Sensitive Payments. Chem-Met has not made or received, and to
its best knowledge, after reasonable due inquiry, none of
their officers, directors, employees, agents, shareholders or
other representative of Chem-Met or any person acting on
behalf of Chem-Met, has made or received, directly or
indirectly, any bribes, kickbacks, illegal political contri-
butions with corporate funds, improper payments from corporate
funds that are falsely recorded on the books and records of
Chem-Met, payments to governmental officials in their
individual capacities or illegal payments from corporate funds
to obtain or retain business.
ARTICLE 5
ADDITIONAL REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE SULLIVANS AND THE SULLIVAN TRUSTS
______________________________________________________
The Sullivans and the Sullivan Trusts, jointly and
severally, provide to Perma-Fix the following additional
representations, warranties and covenants:
5.1 Restrictions on Certain Actions. For a period of two (2)
years from the date of Closing, neither any of the Sullivan
Trusts nor any of the Sullivans shall, without the prior
consent of the Board of Directors of Perma-Fix (specifically
22
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expressed in a resolution adopted by a majority of the Board
of Directors of Perma-Fix who are not employees,
representatives or agents of the Sullivan Trusts and/or the
Sullivans or any of their Affiliates):
5.1.1 Prohibition Against Acquisition. Except for the shares
of Perma-Fix Common Stock which the Sullivan Trusts
acquire under the Chem-Con Agreement, or through stock
splits, stock dividends or stock options granted by
Perma-Fix to TPS, acquire, offer or propose to acquire,
or permit any Affiliate of the Sullivan Trusts or any
of the Sullivans to acquire, directly or indirectly, or
in conjunction with or through any other person, firm,
corporation, entity, partnership, company or associ-
ation, by purchase or otherwise, beneficial ownership
of any shares of Perma-Fix Common Stock or any other
voting securities of Perma-Fix or any rights or option
to acquire voting securities of Perma-Fix or any
securities convertible into any voting securities of
Perma-Fix (collectively, "Perma-Fix Voting
Securities"), except as otherwise agreed to in writing
by the President of Perma-Fix or approved by the Board
of Directors (or a committee of the Board of Directors)
of Perma-Fix. Notwithstanding anything in this Section
5.1 to the contrary, Michael F. Sullivan and Patrick
Sullivan, sons of TPS and ALS, may acquire shares of
Perma-Fix Common Stock.
5.1.2 Prohibition Against Solicitation. Directly or
indirectly, or through or in conjunction with any other
person, firm, corporation, entity, partnership, company
or association, solicit, or encourage any solicitation
of, or permit any Affiliate of the Sullivans or any of
the Sullivan Trusts to solicit, or encourage any
solicitation of, (i) proxies with respect to Perma-Fix
Voting Securities under any circumstances, or (ii)
tender or exchange offers with respect to Perma-Fix
Voting Securities under any circumstances, or (iii) any
election contest relating to the election of directors
of Perma-Fix; or
5.1.3 Prohibition Against Control. Take any action alone or
in concert with any other person, firm, corporation,
partnership, company or association to acquire or
affect the control of Perma-Fix or to influence the
management, board of directors or policies of Perma-
Fix, or, directly or indirectly, or encourage the
formation of, any group within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as
amended, seeking to obtain or take control of Perma-Fix
or to influence the management, board of directors or
policies of Perma-Fix except it is recognized that the
Sullivan Trusts have the right to select one (1)
nominee to the Board of Directors of Perma-Fix under
certain limited conditions.
<PAGE>
5.2 Attendance. During the period that any of the Sullivans or
Sullivan Trusts is the beneficial owner of any shares of
Perma-Fix Common Stock acquired under this Agreement and the
Chem-Con Agreement, the Sullivans and the Sullivan Trusts
shall, jointly and severally, cause all such shares of Perma-
Fix Common Stock which they beneficially own to be duly repre-
sented, in person or by proxy, at each meeting of stockholders
of Perma-Fix.
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<PAGE>
5.3 Confidential Information; Non-compete, and Non-solicitation.
In order to induce Perma-Fix to enter into this Agreement and
the Chem-Con Agreement and as part of the sale of the goodwill
of Chem-Con and Chem-Met, TPS shall:
5.3.1 Confidentiality. For twenty-four (24) months following
the Closing Date, TPS shall hold in confidence and
shall not disclose, directly or indirectly, any and all
information, knowledge or data relating to all sales
and pricing information, customer lists, records,
memorandums, reports or other representations whether
in printed or machine readable form, technology,
proprietary process or intellectual property
("Confidential Information") relating to Chemical
Florida, Chemical Georgia, Chem-Met and/or any of their
subsidiaries or Affiliates, and their respective
businesses, which shall have been obtained by TPS prior
to the date of this Agreement as an executive officer
of Chemical Florida, Chemical Georgia or Chem-Met or in
any other capacity.
Notwithstanding the provisions of Section 5.12.1
hereof, TPS shall not be held liable for disclosure of
information which (i) was in the public domain or is
generally available to the public at the time of its
disclosure by TPS through means unrelated to TPS'
disclosure; or (ii) is disclosed with the written
approval of the Perma-Fix; or (iii) is required to be
disclosed by law.
5.3.2 Covenant Not to Compete. TPS shall not, for a period
of twelve (12) months after the Closing Date, in the
United States, directly or indirectly, by or for
himself, or as an agent, representative or employee of
another, or through others as their agent,
representative or employee or by and through any joint
venture, partnership, corporation, limited liability
company or other business entity in which TPS has a
direct or indirect interest, own, manage, operate,
control, or be engaged in any business that engages
directly or indirectly (i) in the treatment, storage,
recycling, disposal and/or transportation of hazardous
and/or non-hazardous, industrial and/or commercial
waste or (ii) in any other business that competes with
Chem-Met, Chem-Con or any of their subsidiaries or
Affiliates.
5.3.3 Agreement Not to Solicit Employees and Customers. TPS
shall not, for a period of twelve (12) months after the
Closing Date, directly or indirectly, by or for
himself, or as an agent, representative or employee of
another, or through others as their agent,
representative or employee, or by and through any joint
venture, partnership, corporation, limited liability
company or other business entity in which he has a
direct or indirect interest:
5.3.3.1 use or disclose for the benefit of any person
or entity, other than Perma-Fix or any of its
subsidiaries, any customer lists, or identify
any of the customers of Chem-Met, Chem-Con or
any of their subsidiaries or Affiliates; or,
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<PAGE>
5.3.3.2 solicit, induce or in any manner attempt to
solicit or induce, any customer or supplier of
Chem-Met, Chem-Con or any of their
subsidiaries or affiliates, to cease being a
supplier or customer of any of Chem-Met,
Chem-Con or any of their subsidiaries or
Affiliates; or
5.3.3.3 solicit or induce, or in any manner attempt to
solicit or induce, any person employed by, or
as an agent of Chem-Met, Chem-Con or any of
their subsidiaries or affiliates, to terminate
his or her employment or agency with Chem-Met,
Chem-Con or any of their subsidiaries or
Affiliates.
5.4 Specific Enforcement. The parties hereto recognize and agree
that, in the event any of the Sullivans or any of the Sullivan
Trusts breach or threaten to breach any of the provisions of
this Article 5, immediate irreparable injury would be caused
to Perma-Fix, for which there is no adequate remedy at law.
It is accordingly agreed that in the event of a failure by any
of the Sullivans or Sullivan Trusts to perform their
obligations under this Article 5, Perma-Fix shall be entitled
to specific performance through injunctive relief to prevent
breaches of any provision of this Article 5 and to
specifically enforce any provision of Article 5 and the terms
and provisions thereof in any action instituted in any court
of the United States or any state thereof having subject
matter jurisdiction, in addition to any other remedy to which
Perma-Fix may be entitled, at law or in equity.
ARTICLE 6
NO SOLICITATION OF TRANSACTIONS
_______________________________
6.1 No Solicitation of Transactions. Chem-Met, the Sullivans and
the Sullivan Trusts shall not, and will not allow any of their
employees, agents, representatives or Affiliates (including,
but not limited to any of Chem-Con's and/or Chem-Met's
officers, directors, employees, agents, representatives or
Affiliates), to (i) negotiate, sell, offer to sell or solicit
offers to purchase any of the assets of Chem-Con and/or Chem-
Met (other than sales of products in the ordinary course of
their businesses); (ii) negotiate, sell, offer to sell or
solicit offers to purchase or exchange, any capital stock of
Chem-Con, Chem-Met or any Subsidiary of Chem-Con or Chem-Met
to, from or with any other party (other than pursuant to the
terms of this Agreement and the Chem-Con Agreement) or enter
into any merger, consolidation, liquidation or similar trans-
action involving, directly or indirectly, Chem-Con, Chem-Met
or any Subsidiary of Chem-Con or Chem-Met (other than pursuant
to the terms of this Agreement and the Chem-Con Agreement) and
<PAGE>
none of the Sullivans nor the Sullivan Trusts, Chem-Con, Chem-
Met nor any of their Affiliates will negotiate with or provide
financial, technical or other information to any person (other
than pursuant to the terms of this Agreement and the Chem-Con
Agreement) in connection with any such proposed purchase or
transaction; or, (iii) negotiate, sell, offer to sell or
25
<PAGE>
solicit any offers to purchase any outstanding shares of Chem-
Con's and Chem-Met's capital stock or any other securities of
Chem-Con and Chem-Met (other than pursuant to the terms of
this Agreement and the Chem-Con Agreement).
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PERMA-FIX
___________________________________________
Perma-Fix, represents and warrants to the TPS Trust as
follows:
7.1 Organization, etc. Perma-Fix is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware. Perma-Fix has the corporate power to own
its property and to carry on its business as now being con-
ducted; Perma-Fix has the corporate power and authority to
execute and deliver this Agreement, after obtaining approvals
from its lender, the Boston Stock Exchange ("BSE") and the
National Association of Securities Dealers, Inc. ("NASDAQ"),
to issue the Perma-Fix Common Stock to be delivered pursuant
to Sections 3.1 and 3.2 hereof and consummate the transactions
contemplated hereby and the Chem-Con Agreement, and to perform
the transactions contemplated by this Agreement.
7.2 Authorization, Execution and Delivery of Agreement. The exe-
cution, delivery and performance of this Agreement by Perma-
Fix have been duly and validly authorized and approved by the
Board of Directors of Perma-Fix. This Agreement constitutes
the valid and binding agreement of Perma-Fix, enforceable in
accordance with its terms, subject to bankruptcy, insolvency
and other laws of similar import, and Perma-Fix has taken, or
will use reasonable efforts to take prior to the Closing, all
other action required by law on the part of Perma-Fix and
Perma-Fix's Certificate or Articles of Incorporation and
bylaws or otherwise to effect the transactions contemplated by
this Agreement.
7.3 Capital Stock of Perma-Fix. As of the date of this Agreement,
the authorized capital stock of Perma-Fix consists of (i)
2,000,000 shares of Preferred Stock, $.001 par value, of which
5,287 shares are outstanding as of the date hereof; and (ii)
50,000,000 shares of Perma-Fix Common Stock, of which
18,711,215 shares are issued and outstanding as of the date
hereof and 12,330,171 shares are reserved for issuance under
Perma-Fix's Stock Option Plans (such Plans being hereinafter
referred to as the "Perma-Fix Plans") and warrants or rights
to subscribe for or purchase from Perma-Fix any Perma-Fix
Common Stock.
7.4 SEC Filings.
7.4.1 Perma-Fix has previously furnished Chem-Met, the
Sullivans and the Sullivan Trusts true and complete
copies of the following documents which have been filed
by Perma-Fix with the SEC pursuant to Sections 13(a), 14(a),
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<PAGE>
(b) or (c) or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") (such documents are
hereinafter collectively called the "Perma-Fix SEC
Filings"):
7.4.1.1 its Annual Report on Form 10-K for the year
ended December 31, 1998 (the "Form 10-K");
7.4.1.2 Form 8-K, Date of Report (date of earliest
event reported): April 8, 1999.
7.4.1.3 Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 (the "Form 10-Q").
7.4.2 The audited and unaudited financial statements con-
tained in the Perma-Fix SEC Filings, as amended,
present fairly the consolidated financial condition and
results of operations and changes in shareholders'
equity and changes in financial position of Perma-Fix
as of the dates and for the periods indicated, except
as may otherwise be stated in such financial state-
ments. For purposes of this Agreement, all financial
statements of Perma-Fix shall be deemed to include any
notes to such financial statements. The financial
statements described in this Section 7.4 are
hereinafter referred to as the "Perma-Fix Financial
Statements."
7.4.3 Material Adverse Change. Since December 31, 1998,
there has not been, occurred or arisen, which has not
been publicly disclosed to the shareholders of Perma-
Fix or contained in the Perma-Fix SEC Filings, as
amended:
7.4.3.1 any material adverse change in the consoli-
dated financial condition or in the operations
of the business of Perma-Fix and its
subsidiaries, taken as a whole, from that
shown on the Perma-Fix Financial Statements;
or
7.4.3.2 any event, condition or state of facts (other
than the general state of the national economy
and proposed federal legislation or
regulation) of any character which, to the
knowledge of Perma-Fix, materially and
adversely affects the results of operations or
business or financial condition or properties
of Perma-Fix and its subsidiaries, taken as a
whole, except as otherwise disclosed in this
Section 7.4.
7.5 Status of Perma-Fix Common Stock. The shares of Perma-Fix
Common Stock to be delivered pursuant to Article 3 hereof,
when so issued pursuant to this Agreement, will be duly and
validly authorized and issued, fully paid and nonassessable.
7.6 No Breach of Statute or Contract, Governmental Authorizations.
Subject to the National Association of Securities Dealers
("NASD"), the BSE and Perma-Fix's lender, neither the
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<PAGE>
execution and delivery of this Agreement by Perma-Fix nor
compliance with the terms and provisions of this Agreement by
Perma-Fix will violate (i) any law, statute, rule or
regulation of any governmental authority, domestic or foreign,
or will at the Closing Date conflict with or result in a
breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree or ruling of any court or
governmental agency or authority to which Perma-Fix is
subject, which in the aggregate would have a material adverse
effect on Perma-Fix and its subsidiaries, taken as a whole, or
(ii) any agreement or instrument to which it is a party or by
which it is bound or constitute a default thereunder which
would have a material adverse effect on Perma-Fix and its
Subsidiaries, taken as a whole, or (iii) result in the
creation of any Lien upon any property or assets of Perma-Fix
or cause any acceleration of maturity of any obligation or
loan which would have a material adverse effect on Perma-Fix
and its subsidiaries, taken as a whole, or (iv) give to others
any interest or rights, including rights of termination or
cancellation, in or with respect to any of the material
properties, assets, agreements, contracts or business of
Perma-Fix which would have a material adverse effect on Perma-
Fix and its subsidiaries, taken as a whole.
7.7 No Litigation or Adverse Events. Except as set forth in the
SEC Filings, copies of which have been or will be delivered to
Chem-Met, there is no suit, action, or legal, administrative,
arbitration or other proceeding or governmental investigation
pending, or to the best of the knowledge of Perma-Fix
threatened, which could materially and adversely affect the
financial condition and results of operations of Perma-Fix and
its subsidiaries, taken as a whole.
7.8 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of Perma-Fix, or under its authority, is or
will be entitled to any commission or broker's or finder's fee
from any of the parties hereto in connection with any of the
transactions contemplated herein.
ARTICLE 8
COVENANTS OF CONDUCT AND TRANSACTIONS
PRIOR TO AND AFTER THE CLOSING
_____________________________________
8.1 Investigations; Operation of Business of Chem-Met. Chem-Met,
the Sullivans and the Sullivan Trusts agree, jointly and
severally, between the date of this Agreement and the Closing:
8.1.1 Access to Premises and Books. That Perma-Fix and its
representatives shall have full access to all their
premises and books and records relating to Chem-Met,
and shall cause Chem-Met to provide to Perma-Fix and
its representatives full access to their premises and
books and records, and to cause Chem-Met's officers to
furnish Perma-Fix with such financial and operating
data and other information with respect to the business
and properties of Chem-Met, as Perma-Fix shall from
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time to time request; provided, however, that any such
investigation shall not affect any of the representa-
tions, warranties or covenants of Chem-Met, the
Sullivans and/or the Sullivan Trusts hereunder; and,
provided further, that any such investigation shall be
conducted in such manner as not to interfere unreason-
ably with the operation of the business of Chem-Met.
In the event of termination of this Agreement, Perma-
Fix will return to Chem-Met any and all financial
statements, agreements, documents, memoranda or other
repositories of information relating to Chem-Met that
Perma-Fix has obtained in connection with its review,
and Perma-Fix agrees that any written information
relating to Chem-Met and Chem-Met's financial condi-
tion, business, operations and prospects are strictly
confidential and shall not be voluntarily disclosed to
any third party or used by Perma-Fix for its benefit or
the benefit of any other person, except for such
information or documents (i) available generally to the
public, (ii) in the possession of Perma-Fix prior to
its receipt under this Agreement, (iii) obtained by
Perma-Fix from a third party who has an independent
right to such information or documents, or (iv) as
otherwise required by law to be disclosed; provided,
however, that any confidentiality requirements
contained in this Section shall terminate and be null
and void twelve (12) months from the date of this
Agreement.
8.1.2 Business Organization of Chem-Met. To cause Chem-Met,
to the extent required for continued operation of Chem-
Met's business without impairment, to use Chem-Met's
best efforts to preserve substantially intact the busi-
ness organization of Chem-Met to keep available the
services of the present officers and employees of Chem-
Met and to preserve the present relationships of Chem-
Met with persons having significant business relations
therewith such as suppliers, customers, brokers, agents
or otherwise.
8.1.3 Ordinary Course of Business. To cause Chem-Met to con-
duct Chem-Met's businesses only in the ordinary course
and, by way of amplification and not limitation, Chem-
Met will not without the prior written consent of
Perma-Fix (except as otherwise specifically provided in
this Agreement):
8.1.3.1 issue any capital stock or make any
changes to its authorized, issued or
outstanding capital stock, grant any
stock options or rights to acquire shares
of any of its capital stock or any
security convertible into any class of
its capital stock or agree to do any of
the foregoing; or
<PAGE>
8.1.3.2 declare, set aside, or pay any dividend
or distribution with respect to any of
its capital stock or any other securities
convertible into any class of capital
stock; or
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8.1.3.3 directly or indirectly redeem, purchase
or otherwise acquire any of its capital
stock or enter into any agreement to
purchase or redeem any of the Chem-Met
Common Stock; or
8.1.3.4 effect a split or reclassification of any
of its capital stock convertible into any
class of capital stock, purchase, redeem,
retire or otherwise acquire any shares of
any class of its capital stock or any
security convertible into any class of
its capital stock or agree to do any of
the foregoing; or
8.1.3.5 change its charter or bylaws; or
8.1.3.6 except consistent with past practices,
grant any increase in the compensation
payable or to become payable by it to its
officers or employees or any increase,
regardless of amount, in any bonus,
insurance, pension or other benefit plan,
program, payment or arrangement made to,
for, or with any officers or employees;
or
8.1.3.7 engage in any transaction not in the
ordinary course of business; or
8.1.3.8 borrow or agree to borrow any funds or
assume, endorse, guarantee or agree to
guarantee or otherwise as an accommo-
dation become liable or responsible for
obligations of any other individual, firm
or corporation; or
8.1.3.9 waive any rights of substantial value; or
8.1.3.10 enter into an agreement, contract or com-
mitment which, if entered into prior to
the date of this Agreement, would be
required to be listed in a Schedule
pursuant to the terms of this Agreement
and is in excess of Twenty-Five Thousand
Dollars ($25,000.00); or
8.1.3.11 acquire any Real Property; or
8.1.3.12 enter into any agreement with Affiliates
or trustees of the Sullivan Trusts or
Affiliates, officers or directors of
Chem-Met; or
<PAGE>
8.1.3.13 adopt, enter into, or amend materially
any employment contract or any bonus,
stock option, profit-sharing, pension,
retirement, incentive, or similar
employee benefit program; or
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8.1.3.14 pay or incur any obligation or liability,
absolute or contingent, other than lia-
bilities incurred in the ordinary and
usual course of its business; or
8.1.3.15 mortgage, pledge, or subject to lien or
other encumbrance any of its properties
or assets; or
8.1.3.16 except for transactions in the ordinary
and usual course of its business, sell or
transfer any of its properties or assets
or cancel, release or assign any indebt-
edness owed to it or any claims held by
it; or
8.1.3.17 make any investment of a capital nature
in excess of Twenty-Five Thousand Dollars
($25,000.00) for any one item or group of
similar items, contributions to capital,
property transfers, or otherwise, or by
the purchase of any property or assets of
any other individual, firm, or corpor-
ation; or
8.1.3.18 enter into any other agreement not in the
ordinary and usual course of business; or
8.1.3.19 merge or consolidate with any other cor-
poration, acquire any of its assets or
capital stock, solicit any offers for any
of its assets or capital stock, or,
except in the ordinary course of busi-
ness, acquire any assets of any other
person, corporation, or other business
organization, or enter into any discus-
sions with any person concerning, or
agree to do, any of the foregoing; or
8.1.3.20 enter into any transaction or take any
action which would, if effected prior to
the Closing, constitute a breach of any
of the representations, warranties or
covenants contained in this Agreement.
8.1.4 Sale of Assets. Without the prior written consent of
Perma-Fix, Chem-Met will not undertake or enter into
any sale, disposition, surrender, acquisition,
agreement or transaction relating to any of its assets
except in the ordinary course of business or as
contemplated by this Agreement.
8.2 No Selling of Shares or Granting of Options. Prior to the
Closing, neither the TPS Trust nor Chem-Met shall sell,
transfer, assign or otherwise dispose of any of the Shares or
grant any options, warrants, or other rights to purchase or
otherwise acquire any Shares or other shares of the capital
stock of Chem-Met or issue any securities convertible into any
shares of the capital stock of Chem-Met.
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8.3 Consents. Chem-Met, the Sullivans, the Sullivan Trusts and
Perma-Fix shall each use its best efforts to obtain the
consent or approval of each person or Governmental Authority
whose consent or approval shall be required in order to permit
Chem-Met, the Sullivans, the Sullivan Trusts or Perma-Fix, as
the case may be, to consummate the transactions contemplated
by this Agreement.
8.4 Governmental Reports. Between the date of this Agreement and
the Closing, the Sullivans, the Sullivan Trusts and Chem-Met
shall furnish, make available to Perma-Fix any and all
reports, not heretofore delivered to Perma-Fix under this
Agreement or which are filed subsequent to the date of this
Agreement, to any state, federal or local government, agency
or department, including, but not limited to, the SEC, the
IRS, the EPA, the FTC and the PBGC.
8.5 Conduct of Business. Prior to the Closing, Chem-Met shall
conduct its business in the ordinary and usual course as
heretofore conducted and to use its best efforts (i) to
preserve its business and business organization intact; (ii)
to keep available to Chem-Met the services of the present
officers and employees of Chem-Met; (iii) to preserve the
goodwill of customers and others having business relations
with Chem-Met; (iv) to maintain its properties in customary
repair, working order and condition (reasonable wear and tear
excepted); (v) to comply with all Laws applicable to it and
the conduct of its businesses; (vi) to keep in force at not
less than their present limits all existing policies of
insurance; (vii) to make no material changes in the customary
terms and conditions upon which it does business; (viii) to
duly and timely file all reports, returns, and other documents
required to be filed with federal, state, local and other
Governmental Authorities; and, (ix) unless it is contesting
the same in good faith and has established reasonable reserves
therefor, to pay, when required to be paid, all Taxes
indicated by Returns so filed or otherwise lawfully levied or
assessed upon it or any of its properties and to withhold or
collect and pay to the proper Governmental Authorities or hold
in separate bank accounts for such payment all taxes and other
assessments which it believes in good faith to be required by
Law to be so withheld or collected.
8.6 Governmental Approvals. Prior to Closing, each of Chem-Met,
the Sullivans and the Sullivan Trusts shall use its best
efforts in good faith to take or cause to be taken as promptly
as practicable all such steps as shall be necessary to obtain
all required Governmental Approvals as promptly as practicable
to consummate the transactions contemplated by this Agreement.
8.7 Encumber. None of Chem-Met, the TPS Trust nor the Sullivan
Trusts shall sell, pledge, encumber or otherwise hypothecate
or transfer or grant an option, warrant or right to sell or
dispose of any shares of capital stock of Chem-Met prior to
the Closing other than pursuant to this Agreement.
<PAGE>
8.8 Title Policies for Real Property Owned by Chem-Met. On or
before five (5) days prior to the Closing Date, Chem-Met shall
deliver to Perma-Fix a fully paid policy or policies of title
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<PAGE>
insurance, dated as of a date within five (5) days of the
Closing Date, issued to Perma-Fix by a title company of
nationally recognized standing, reasonably satisfactory to
Perma-Fix, on a standard ALTA's owner title insurance policy
form, insuring that Chem-Met has good and marketable fee
simple title in and to each parcel of Real Property owned by
Chem-Met listed on Schedule "F" hereto and the 10 Acre Tract,
free and clear of all Liens and containing no exceptions,
except Permitted Encumbrances. The amount of such title
insurance for each parcel of Real Property owned by Chem-Met
shall be as set forth on Schedule "F" hereto. The amount of
such title insurance as to the 10 Acre Tract shall be
$700,000.00. The cost and expense for such title insurance
shall be shared equally by the Sullivans and Perma-Fix.
8.9 Survey. Simultaneously with the delivery of the title
policies to Perma-Fix pursuant to Sections 8.8 hereof, Chem-
Met shall deliver to Perma-Fix and the title company issuing
the title insurance under Sections 8.8 hereof, a written
survey certified in a manner reasonably acceptable to
Perma-Fix and prepared by a duly licensed surveyor reasonably
satisfactory to Perma-Fix covering each of the Real Properties
owned by Chem-Met and the 10 Acre Tract, which survey shall be
satisfactory to Perma-Fix and to the title company issuing the
ALTA's owner's title insurance policies and shall be prepared
in accordance with the "Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys" jointly established and
adopted by ALTA and ACSM in 1992 and includes items 1, 2, 3,
4, 6, 7(a), 7(b)(i), 8, 9, 10, 11 and 13 of Table A thereto
and pursuant to the accuracy standards (as adopted by ALTA and
ACSM and in effect on the date of the certification) of an
Urban Survey. The cost and expense for such survey shall be
shared equally by the Sullivans and Perma-Fix.
8.10 Public Announcements. Perma-Fix, the Sullivans and the
Sullivan Trusts agree that they will consult with each other
before issuing any press releases or otherwise making any
public statements with respect to this Agreement or the
transactions contemplated hereby and any press release or any
public statement shall be subject to mutual agreement of the
parties, except as may be required by the disclosure
obligations of either party or their Affiliates under
applicable securities law.
8.11 Notification. Chem-Met, the Sullivans and the Sullivan Trusts
shall give Perma-Fix prompt written notice of (i) the
existence of any fact or the occurrence of any event which
constitutes, or with the giving of notice or the passage of
time or both would constitute a breach of any representation
or warranty of Chem-Met, the Sullivans or the Sullivan Trusts
made herein or pursuant hereto and (ii) the taking of any
action by Chem-Met, the Sullivans or the Sullivan Trusts that
would breach or violate, or constitute a default under, any
agreement or covenant of Chem-Met, the Sullivans or the
Sullivan Trusts made herein or pursuant hereto. Upon the
giving of such notice, Perma-Fix may terminate this Agreement
in accordance with the terms hereof.
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8.12 Filings. The parties hereto shall, as promptly as practicable
after the date hereof, submit applications, all documents,
reports and notifications, and satisfy all requests for
additional information, if any, pursuant to 40 Code of Federal
Regulations ("CFR") Part 270 and all other requirements under
any and all applicable Environmental Laws, with regard to the
transfer of, or changes in the ownership or operational
control of Chem-Met or the permits, licenses or approvals held
or used by Chem-Met relating to the businesses of Chem-Met.
Each of the parties hereto agree to reasonably cooperate with
each other to obtain all authorizations required under any and
all applicable laws, to consummate the transactions
contemplated hereby.
8.13 Supplemental Disclosure. Chem-Met, the Sullivans and the
Sullivan Trusts agree that, with respect to their
representations and warranties made in this Agreement, they
will have a continuing obligation to supplement or amend the
Schedules hereto with respect to any matter hereafter arising
or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or
described in the Schedules hereto. Upon the supplementing or
amending of any Schedules by Chem-Met, the Sullivans or the
Sullivan Trusts or the discovery of any matters by Perma-Fix
in the course of its investigations, Perma-Fix may, at its
option, terminate this Agreement without any liability or
obligation on the part of Perma-Fix.
8.14 SEC Filings. Perma-Fix shall provide the Sullivans with all
reports and other filings it makes with the SEC under the
Securities Act or under the Exchange Act from the date of this
Agreement to the Closing.
8.15 Listing of Perma-Fix Common Stock. Perma-Fix shall use
reasonable efforts to obtain, prior to the Closing, approval
for listing on the BSE and NASDAQ Small Cap Market, upon
official notice of issuance, of the shares of Perma-Fix Common
Stock to be delivered pursuant to the provisions of Article 3
hereof.
8.16 Information for SEC Filings. The parties hereto will each
furnish to the other such data and information relating to it
as the other may reasonably request for the purpose of
including such data and information in documents to be filed
with the SEC by Perma-Fix.
8.17 Audited Financial Statements. Chem-Con, Chem-Met, the
Sullivans and the Sullivan Trusts shall have Bovitz & Co.,
P.C., prepare, audit and deliver to Perma-Fix true, correct
and complete copies of the 1998, 1997 and 1996 Audited
Financial Statements of Chem-Con and Chem-Met, on a combined
basis, consisting of (i) balance sheet as of fiscal years
ended September 30, 1998, September 30, 1997 and September 30,
1996; (ii) statement of income and related earnings for the
fiscal years ended September 30, 1998, September 30, 1997 and
September 30, 1996; (iii) statement of stockholders' equity
<PAGE>
and statement of cash flow for the years ended September 30,
1998, September 30, 1997 and September 30, 1996, and (iv)
notes thereto, with auditors' report thereon being
unqualified, all of which shall have been examined by Bovitz
& Co., P.C., independent certified public accountants, and be
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in accordance with Regulation S-X (17 C.F.R. Part 210) and
GAAP, consistently applied. The audited financial statements
referred to in this Section 8.17 shall include Chem-Con and
Chem-Met, on a combined basis. Perma-Fix agrees to pay for
that portion of such audited financial statements for Chem-Con
and Chem-Met, on a combined basis, relating to years ended
September 30, 1996, 1997 and 1998 unless the audit finds that
the income of Chem-Con and Chem-Met, on a combined basis, is
twenty percent (20%) less than represented prior to accounting
entries as follows: (i) reversal of officer notes receivable
of $1,125,919 offset by a note payable from the officer in the
amount of $60,980; (ii) increased allowance for doubtful
accounts of Two Hundred Thousand Dollars ($200,000); (iii)
accrued expenses of Six Hundred Thousand Dollars ($600,000);
(iv) reserve for remediation of Chem-Con's Valdosta, Georgia
facility of One Million Eight Hundred Thousand Dollars
($1,800,000); and (v) accrued closure costs of Six Hundred
Thirty-Five Thousand Eight Hundred Two Dollars ($635,802), in
which case the audit shall be paid for in its entirety by
Chem-Con.
8.18 Public Disclosure. Perma-Fix and the Sullivans shall consult
with each other before issuing any press release or otherwise
making any public statement with respect to the Acquisition
or this Agreement and shall not issue any such press release
or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with
a national securities exchange or the NASDAQ.
8.19 Letter of Public Accountants. Chem-Met, the Sullivans and the
Sullivan Trusts shall cause to be delivered to Perma-Fix a
letter ("Accountant Letter") which shall be dated not less
than five days prior to the Closing Date from Bovitz & Co.,
P.C., which shall be addressed to Perma-Fix and be in form
reasonably satisfactory to Perma-Fix and customary in scope
and substance for letters delivered by independent public
accountants in connection with registration statements and
shall contain, without limitation, the following statements:
(i) the combined Audited Financial Statements of Chem-Con and
Chem-Met examined by them comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and of the published Rules and Regulations
thereunder and (ii) on the basis of a reading of the latest
available unaudited consolidated financial statements,
inquiries of officers of Chem-Con and Chem-Met responsible for
financial and accounting matters and a reading of the minutes,
nothing has come to their attention which caused them to
believe that (a) as of the date of the latest available
unaudited consolidated interim financial statements prepared
by Chem-Con and Chem-Met there was any change in the capital
stock or long-term debt of Chem-Con, Chem-Met and their
subsidiaries consolidated or any decreases in consolidated net
current assets or in consolidated net assets, as compared with
the amounts shown in the September 30, 1998, consolidated
Balance Sheet, or (b) for the period from September 30, 1998,
to the date of the latest available unaudited interim
consolidated financial statements prepared by Chem-Met, there
were any decreases, as compared with the corresponding period
in the preceding year, in consolidated net revenues or in
total or per share amounts of consolidated income (loss)
before extraordinary items or of consolidated net income,
except in all instances for changes or decreases which the
Audited Financial Statements of Chem-Con and Chem-Met disclose
35
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have occurred or may occur, and (c) that on the basis of
inquiries of officers of Chem-Con and Chem-Met responsible for
financial and accounting matters and a reading of the minutes,
nothing has come to their attention which caused them to
believe that (1) at a specified date within five (5) days of
the Closing Date there was any change in the capital stock or
long-term debt of Chem-Con and Chem-Met and their subsidiaries
consolidated or any decreases in consolidated net current
assets or in consolidated net assets, as compared with amounts
shown on the September 30, 1998, consolidated Balance Sheet or
(2) for the period from the date of the Audited Financial
Statements prepared by Chem-Con and Chem-Met for year ended
September 30, 1998, to a specified date within five (5) days
of the Closing Date there were any decreases as compared with
the corresponding period in the preceding year, in
consolidated net revenues or in the total or per-share amounts
of consolidated income before extraordinary items or of
consolidated net income, except in all instances for changes
or decreases which this Agreement or the Chem-Con Agreement
discloses have occurred or may occur.
8.20 Liability to Broker. The Sullivans have retained WHCA
Partners as an agent or firm acting on behalf of the
Sullivans and/or the Sullivan Trusts in connection with this
Agreement. Except as otherwise expressly provided in Section
4.15 hereof, the Sullivans and the Sullivan Trusts shall,
jointly and severally, pay any and all fees or renumeration
due and payable to WHCA Partners as a result of this
Agreement and/or consummation of the transactions
contemplated by this Agreement
8.21 Assumption of Tax Liability and Quanta Liability. Each of
the Sullivans and the Sullivan Trusts, jointly and severally,
assume and agree to pay, when due, to perform or discharge,
as the case may be, any and all (i) federal and/or state tax
obligations and liabilities of Chem-Con, Chem-Met and Quanta
(and any other corporation with respect to periods for which
such corporation was included and consolidated federal income
tax returns with Chem-Con, Chem-Met or Quanta) for any period
ending on or prior to the Closing Date, without regard to
whether such liabilities have been or would be properly
provided for in the financial records of any person under
generally accepted accounting principals, and including,
without limitation, any such obligations or liabilities
arising from (A) the transactions contemplated by this
Agreement, (B) the determination of any tax on a consolidated
basis with any other corporation, or (C) any tax sharing or
tax allocation agreement, and (ii) obligations and
liabilities (absolute or contingent, known or unknown)of
Quanta that have been incurred by Quanta in any manner
whatsoever prior to the Closing Date or arising in any way in
connection with the business or operations of Quanta prior to
the Closing Date.
<PAGE>
8.22 Access to Premises and Books. The Sullivans, the Sullivan
Trusts and their representatives shall have full access to
all their premises and books and records relating to Perma-
Fix, and Perma-Fix shall provide to the Sullivans, the
Sullivan Trusts and their representatives full access to
their premises and books and records, and to cause Perma-
Fix's officers to furnish the Sullivans, the Sullivan Trusts
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<PAGE>
with such financial and operating data and other information
with respect to the business and properties of Perma-Fix, as
the Sullivans or Sullivan Trusts shall from time to time re-
quest; provided, however, that any such investigation shall
not affect any of the representations, warranties or
covenants of Perma-Fix hereunder; and, provided further, that
any such investigation shall be conducted in such manner as
not to interfere unreasonably with the operation of the busi-
ness of Perma-Fix. In the event of termination of this
Agreement, the Sullivans and the Sullivan Trusts will return
to Perma-Fix any and all financial statements, agreements,
documents, memoranda or other repositories of information re-
lating to Perma-Fix and its Subsidiaries that Chem-Met, the
Sullivans or the Sullivan Trusts have obtained in connection
with its review, and Chem-Met, the Sullivans and the Sullivan
Trusts agree that any written information relating to Perma-
Fix and its Subsidiaries and Perma-Fix's and its
Subsidiaries' financial condition, business, operations and
prospects are strictly confidential and shall not be volun-
tarily disclosed to any third party or used by any of Chem-
Met, the Sullivans or the Sullivan Trusts for its benefit or
the benefit of any other person, except for such information
or documents (i) available generally to the public, (ii) in
the possession of Chem-Met prior to its receipt under this
Agreement, (iii) obtained by any of Chem-Met, the Sullivans
or the Sullivan Trusts from a third party who has an inde-
pendent right to such information or documents, or (iv) as
otherwise required by law to be disclosed; provided, however,
that any confidentiality requirements contained in this
Section shall terminate and be null and void twelve (12)
months from the date of this Agreement.
8.23 Quanta Merger and Exchange. Prior to the Closing Date, (i)
Quanta shall have merged with and into Chem-Met, with Chem-
Met being the survivor ("Quanta Merger"), without any
consideration being paid to the stockholders of Quanta and
without any resulting tax consequences as a result thereof,
with such Quanta Merger being on terms and conditions
satisfactory to Perma-Fix, and (ii) after the Quanta Merger
but prior to the Closing, Chem-Met and Allen Sibley Limited
Liability Company, a Michigan limited liability company
("Allen Sibley") shall have completed the transaction in
which Allen Sibley shall have transferred and conveyed to
Chem-Met good and marketable fee simple title, free and clear
of any and all Liens except Permitted Encumbrances, in and to
the 10 Acre Tract and shall have assigned and transferred the
promissory note due by Quanta to Allen Sibley in the
principal sum of $365,000 ("Sibley Note") and the promissory
note due by Chem-Con to the TPS Trust in the principal sum of
$60,900 ("Chem-Con Note") in exchange for the two promissory
notes held by Chem-Met in the aggregate principle amount of
$1,125,919, with one note due from the TPS Trust and payable
to Quanta in the principal sum of $726,105 and the other note
due from the TPS Trust and payable to Chem-Met in the
principal sum of $399,814 (the "Exchange Transaction"). The
transfer of the 10 Acre Tract by Allen Sibley to Chem-Met
shall be by a general warranty deed, and such shall convey
good and marketable fee simple title, free and clear of any
and all Liens except for Permitted Encumbrances in and to the
10 Acre Tract to Chem-Met. At the time of the Quanta
Exchange, Allen Sibley shall have full ownership of and have
full and complete authority to transfer and assign, the
Sibley Note and the Chem-Con Note to Chem-Met, free and clear
of any and all Liens. The transaction contemplated by the
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Exchange Transaction shall be on terms and in a manner that
is satisfactory to Perma-Fix. Notwithstanding anything in
this Section 8.24 to the contrary, the Quanta Merger and the
Exchange Transaction shall be consummated only if such do not
adversely effect Perma-Fix's ability to account for the
Merger and the Chem-Con Merger as a pooling of interest.
8.24 T.A.S. Leasing, Inc. Prior to the Closing Date, the ALS
Trust, who owns all of the outstanding capital stock of
T.A.S. Leasing, Inc. ("TAS Leasing"), shall transfer or
assign all of the outstanding capital stock of TAS Leasing
to Chem-Met, without any consideration being paid to the ALS
Trust as a result thereof and without any tax consequences to
Chem-Met as a result thereof, all in a manner satisfactory to
Perma-Fix. Upon such transfer, TAS Leasing shall be a wholly
owned subsidiary of Chem-Met.
ARTICLE 9
CONDITIONS OF TRANSACTIONS CONTEMPLATED BY AGREEMENT;
ABANDONMENT OF AGREEMENT
_____________________________________________________
9.1 Closing Conditions of Perma-Fix. The obligations of Perma-
Fix to consummate this Agreement or to effect the
transactions contemplated by this Agreement shall be subject
to the following conditions:
9.1.1 Resolutions of Board of Directors and Shareholders of
Chem-Met. Chem-Met shall have furnished to Perma-Fix,
in form and substance satisfactory to Perma-Fix:
9.1.1.1 certified copies of resolutions of the
shareholder and Board of Directors of Chem-
Met, duly adopted by the Board of Directors
and shareholder of Chem-Met, authorizing, the
execution, delivery and performance of this
Agreement by Chem-Met and its shareholder;
9.1.1.2 Incumbency certificate for the officers of
Chem-Met.
9.1.2 Delivery of Trust Documents. The trust documents
creating the Sullivan Trust shall have been delivered
to Perma-Fix evidencing, in form and content
satisfactory to Perma-Fix that each of the Sullivan
Trusts has the full, valid and legal capacity and
authority to execute, deliver and perform all of its
agreements, obligations, terms and conditions of this
Agreement.
9.1.3 Approval by Lender. Perma-Fix's lender shall have
approved the transactions contemplated by this
Agreement and the Chem-Con Agreement, and Perma-Fix
shall have obtained for Chem-Con and Chem-Met a
working capital line of credit from and after
consummation of the Acquisition on terms satisfactory
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to Perma-Fix. All of Chem-Met's debts and obligations
to Charter Bank shall have been paid in full, and
Charter Bank shall have released all liens and
security interest in and to the assets of Chem-Met,
all in form and substance satisfactory to Perma-Fix.
9.1.4 Representations and Warranties of the Sullivans and
the Sullivan Trusts to be True and Correct and
Compliance With Covenants. Except to the extent
waived in writing by Perma-Fix hereunder, (i) the
representations and warranties of the Sullivans and
the Sullivan Trusts herein contained shall be true and
correct in all material respects on the Closing Date
with the same effect as though made at such time; and
(ii) the Sullivans and the Sullivan Trusts shall have
performed all of their obligations and complied with
all covenants, obligations, and agreements required by
this Agreement to be performed or complied with by the
Sullivans and the Sullivan Trusts on or prior to the
Closing Date. The Sullivans and Sullivan Trusts shall
also have delivered to Perma-Fix a certificate, dated
the Closing Date and signed by each of the Sullivans
and all trustees of the Sullivan Trusts, to both of
the aforementioned effects. The Certificate is to be
in form and substance satisfactory to Perma-Fix.
9.1.5 Representations and Warranties of Chem-Met to be True
and Compliance With Covenants. Except to the extent
waived in writing by Perma-Fix hereunder, (i) the
representations and warranties of Chem-Met herein con-
tained shall be true in all material respects on the
Closing Date with the same effect as though made at
such time; and (ii) Chem-Met shall have performed all
obligations and complied with all covenants, obliga-
tions, and agreements required by this Agreement to be
performed or complied with by Chem-Met on or prior to
the Closing Date. Chem-Met shall also have delivered
to Perma-Fix a certificate of Chem-Met (in form and
substance satisfactory to Perma-Fix), dated the
Closing Date and signed by the chief executive officer
of Chem-Met, to both of the aforementioned effects.
9.1.6 Third Party Consents. Chem-Met, the Sullivans and the
Sullivan Trusts shall have obtained consents to the
transactions contemplated by this Agreement from the
parties to all contracts, permits, agreements, debt
instruments and other documents referred to in the
Schedules delivered by Chem-Met, the Sullivans or the
Sullivan Trusts to Perma-Fix in accordance with this
Agreement or otherwise, which require such consents
and consents from, or notification to, all
Governmental Authorities which require such consents
or notifications.
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9.1.7 No Material Adverse Change. There shall not have
occurred (i) any material adverse change since
September 30, 1998, in the business, properties,
assets, results of operations or financial condition
of Chem-Met, or (ii) any loss or damage to any of the
properties or assets (whether or not covered by
insurance) of Chem-Met which will materially affect or
impair the ability of Chem-Met to conduct, after con-
summation of the transactions contemplated hereby, the
business of Chem-Met as now being conducted by Chem-
Met.
9.1.8 Statutory Requirements; Litigation. In a manner
satisfactory to Perma-Fix, (i) all statutory
requirements for the valid consummation by Chem-Met,
the Sullivan Trusts and the Sullivans of the
transactions contemplated by this Agreement shall have
been fulfilled; all authorizations, consents and
approvals of all Governmental Authorities required to
be obtained in order to permit consummation by Chem-
Met, the Sullivan Trusts and the Sullivans of the
transactions contemplated by this Agreement and to
permit the business presently conducted by Chem-Met to
continue unimpaired immediately following the Closing
shall have been obtained; and, (ii) all applications
for permits shall have been approved by the
appropriate Governmental Authorities and all
authorizations and approvals relating to all permits
and licenses held by Chem-Met shall have been obtained
from the appropriate Governmental Authorities under
any and all of the Environmental Laws as a result of
the change in ownership of Chem-Met, pursuant to the
terms of this Agreement, with such permits, approvals
and authorizations to be in form and substance satis-
factory to Perma-Fix, so that Chem-Met is permitted to
continue unimpaired immediately following the Closing
Date the same business operations that Chem-Met
carried on as of the date of this Agreement and the
Closing Date. Between the date of this Agreement and
the Closing, no Governmental Authority, whether
federal, state or local, shall have instituted (or
threatened to institute either orally or in a writing
directed to any of Chem-Met, the Sullivans and/or the
Sullivan Trusts or any of their subsidiaries) an
investigation which is pending on the Closing relating
to this Agreement and the transactions contemplated
hereby, and between the date of this Agreement and the
Closing no action or proceeding shall have been
instituted or, to the knowledge of Perma-Fix, shall
have been threatened before a court or other govern-
mental body or by any public authority to restrain or
prohibit the transactions contemplated by this Agree-
ment or to obtain damages in respect thereof.
9.1.9 Opinion of Counsel of Chem-Met, the Sullivans and the
Sullivan Trusts. Perma-Fix shall have received from
O'Rourke & Myers, counsel to Chem-Met, the Sullivans
and the Sullivan Trusts, or such other counsel
acceptable to Perma-Fix and its counsel, an opinion or
opinions, dated the Closing Date, with the form and
contents thereof reasonably satisfactory to Perma-Fix
and its counsel.
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9.1.10 Due Diligence. Perma-Fix shall have completed its
financial due diligence of Chem-Met, with the results
thereof satisfactory to Perma-Fix.
9.1.11 Environmental Audit. Perma-Fix shall have conducted
and completed an environmental audit of Chem-Met, and
shall have determined to the satisfaction of Perma-Fix
that, (i) Chem-Met has been and is currently in
compliance in all material respects with all
applicable Environmental Laws, except as otherwise
disclosed herein; (ii) none of the assets (including,
but not limited to, the soils and groundwater on or
under any of the Real Property) owned, leased,
operated or used by Chem-Met are contaminated with any
hazardous substance (as defined in Section 101(14) of
CERCLA or any analogous state or local Laws) or
petroleum (as defined in Subtitle I of RCRA or any
analogous state or local Laws) in a manner that might
have a material adverse effect on Chem-Met, except as
otherwise disclosed herein; and (iii) Chem-Met is not
or would not be subject to any liability in any
material amount under any provision, or as a result of
any past or present violation, of any applicable
Environmental Laws.
9.1.12 Stock Certificates. On or prior to the Closing, the
TPS Trust shall execute, endorse in blank and deliver
to Perma-Fix, with signatures guaranteed by a bank or
investment banking firm and in form acceptable to
Perma-Fix, all of the stock certificates representing
the Shares, duly and validly endorsed for transfer,
free and clear of any and all Liens.
9.1.13 Permits. All permits (including, but not limited to,
all permits issued or issuable under all Environmental
Laws) which Perma-Fix deems necessary to conduct Chem-
Met's business after the Closing Date as currently
conducted by Chem-Met shall have been (i) duly and
validly transferred, or approved for transfer or
control by Perma-Fix effective upon the Closing, in a
manner satisfactory to Perma-Fix by all appropriate
Governmental Authorities, or (ii) duly and validly
issued to Perma-Met by all appropriate Governmental
Authorities, all in form and content satisfactory to
Perma-Fix.
9.1.14 No Liens on Assets. All assets of Chem-Met (real and
personal) shall be free and clear of any and all
Liens, except for Permitted Encumbrances.
9.1.15 Listing of Perma-Fix Common Stock. The BSE and the
NASDAQ shall have approved for listing, upon official
notice of issuance, the shares of Perma-Fix Common
Stock to be delivered pursuant to the provisions of
Article 3 hereof.
9.1.16 Minute Books and Stock Ledgers. The TPS Trust shall
have delivered to Perma-Fix the minute books and stock
ledgers for Chem-Met.
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9.1.17 Financial Statements. Perma-Fix shall have received
from Bovitz & Co., P.C., Audited Financial Statements
("Chem-Met Audited Financial Statements") of Chem-Met
and Chem-Con for all years required to be included in
the Form 8-K to be filed by Perma-Fix as a result of
consummation of this Agreement and the Chem-Con
Agreement and as required by Regulation S-X (17 CFR
Part 210), with such audited financial statements to
be prepared in accordance with Regulation S-X (17 CFR
Part 210) and GAAP, consistently applied throughout
the periods, and with the Bovitz & Co., P.C., report
in connection therewith to be unqualified.
9.1.18 Title Policies and Surveys. Prior to the Closing
Date, Perma-Fix shall have received the title
insurance policies and surveys pursuant to Sections
8.9 and 8.10 hereof.
9.1.19 Good Standing Certificates. Good standing and tax
certificates (or analogous documents), dated as close
as practicable to the Closing, from the appropriate
authorities in each jurisdiction of incorporation of
Chem-Met and in each jurisdiction in which Chem-Met is
qualified to do business, showing Chem-Met to be in
good standing and to have paid all taxes due in the
applicable jurisdiction.
9.1.20 Resignation of Directors. All of the directors of
Chem-Met shall have resigned as members of the Board
of Directors of Chem-Met, effective as of the Closing
Date, except for any existing director of Chem-Met who
Perma-Fix advises the TPS Trust in writing prior to
Closing is to remain a director of Chem-Met, whichever
is applicable, prior to Closing.
9.1.21 Chem-Con Agreement. The Chem-Con Agreement shall have
closed contemporaneously with the Closing of this
Agreement.
9.1.22 Facility Remediation. Perma-Fix shall determine, in
its sole discretion, that the total cost to remediate
any and all contamination on, under or at the Facility
(including, but not limited to, the areas designated
as Area 4 and Area 5 on Exhibit "B" describing the
Facility) shall not exceed, in the aggregate,
$2,000,000, and the Michigan Department of
Environmental Quality has executed an Amendment of
Redesignation Approval, the form and content of which
is satisfactory to Perma-Fix.
9.1.23 Settlement of Four County Landfill PRP Claims. Chem-
Met shall have entered into a valid and binding
definitive settlement agreements with the Indiana
Department of Natural Resources and the Four County
PRP Groups settling any and all claims and liabilities
of Chem-Met and its Affiliates, both potential and
actual, for an amount not to exceed $900,000 and
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providing contribution protection to Chem-Met and its
Affiliates, arising out of Chem-Met's status as a PRP
regarding the Four County Landfill, with all such
settlement agreements being satisfactory to Perma-Fix
and having been approved and entered by the Indiana
Department of Natural Resources and the executed Four
County PRP Groups, all in a manner satisfactory to
Perma-Fix.
9.1.24 Settlement of Chem-Fix Claims. Chem-Met's liability
under the Chem-Fix Settlement Agreement shall not
exceed $360,000, and Chem-Met has obtained a release
of any judgment relating to such liability.
9.1.25 Shareholder Approval. The shareholders of Chem-Met
shall have approved the Acquisition pursuant to the
laws of the states of incorporation of Chem-Met and no
shareholders of Chem-Met shall have exercised or
attempted to exercise dissenters rights or other
similar rights in connection with the transactions
contemplated hereby.
9.1.26 Accountants Letter. Perma-Fix shall have received the
Accountant Letter and such shall be satisfactory to
Perma-Fix.
9.1.27 Officer and Director Waiver. Each officer and
director of Chem-Met shall have executed and delivered
to Perma-Fix an agreement, in form and substance
satisfactory to Perma-Fix pursuant to which each such
officer and director shall waive any and all rights to
indemnification which any such officer and director
may have from Chem-Met pursuant to Chem-Met's
Certificate of Incorporation, Bylaws, any
indemnification agreements, or otherwise.
9.1.28 Quanta Transactions. On or prior to Closing (i) the
Quanta Merger and the Exchange Transaction shall have
been completed pursuant to Section 8.24 hereof and in
a manner satisfactory to Perma-Fix.
9.1.29 Fairness Opinion. Within five (5) days prior to the
Closing, Perma-Fix shall have received a fairness
opinion from an investment banker selected by Perma-
Fix that this Agreement and the Chem-Con Agreement and
consideration to be issued by Perma-Fix under this
Agreement and the Chem-Con Agreement are fair to
Perma-Fix and its shareholders from a financial
standpoint, with the form and content of such opinions
to be satisfactory to Perma-Fix.
9.1.30 Michigan Strategic Fund. Perma-Fix shall have
arranged with its lender to repay the Chem-Con and/or
Chem-Met debt to the Michigan Strategic Fund, and the
Michigan Strategic Fund shall have released and
terminated its liens in and to any and all assets of
Chem-Con and Chem-Met.
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9.1.31 TAS Lease. Prior to the Closing, TAS Leasing shall
become a wholly owned subsidiary of Chem-Met pursuant
to the terms of Section 8.25 hereof.
9.2 Conditions to Obligations of Chem-Met and The TPS Trust. The
obligation of Chem-Met and the TPS Trust to consummate this
Agreement or to effect the transactions contemplated by this
Agreement shall be subject to the following conditions:
9.2.1 Resolutions of Perma-Fix Board of Directors and
Shareholders. Perma-Fix shall have furnished Chem-Fix
with:
9.2.1.1 certified copies of resolutions duly adopted
by the Board of Directors of Perma-Fix
approving and authorizing execution, delivery
and performance of the transactions
contemplated by this Agreement;
9.2.1.2 Incumbency Certificates for the officers of
Perma-Fix.
9.2.2 Representations and Warranties of Perma-Fix to be
True. Except to the extent waived hereunder, (i) the
representations and warranties of Perma-Fix herein
contained shall be true in all material respects at
the Closing with the same effect as though made at
such time, except for such which do not have a
material adverse effect on Perma-Fix and its
subsidiaries, taken as a whole; and (ii) Perma-Fix
shall have performed all material obligations and com-
plied with all material covenants required by this
Agreement to be performed or complied with by it prior
to the Closing. Perma-Fix shall also have delivered
to the TPS Trust a certificate of Perma-Fix, dated the
Closing and signed by its President or a Vice
President to both of the aforementioned effects.
9.2.3 No Material Adverse Change. Except as otherwise dis-
closed in this Agreement or as publicly disclosed to
the shareholders of Perma-Fix or contained in the
Perma-Fix SEC Filings, there shall not have occurred
(i) any material adverse change since December 31,
1998, in the consolidated financial condition of
Perma-Fix (it being understood that anything disclosed
in any of the financial data furnished by Perma-Fix to
the Sullivans or the Sullivan Trusts pursuant to this
Agreement, or in an annual, interim or other report
filed by Perma-Fix with the SEC or press releases
issued by Perma-Fix (copies of which shall have been
furnished to the TPS Trust) since December 31, 1998,
and prior to the date of this Agreement (copies of
which shall have been furnished to Chem-Met, the
Sullivans or the Sullivan Trusts), shall not
constitute such a material adverse change or (ii) any
loss or damage to any of the material properties or
assets of Perma-Fix which would have a material
adverse effect on Perma-Fix and its subsidiaries con-
sidered as a whole.
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9.2.4 Litigation. Between the date of this Agreement and
the Closing, no Governmental Authority, whether
federal, state or local, shall have instituted (or
threatened to institute, either orally or in writing,
directed to the any of the Sullivan Trusts, Perma-Fix,
Chem-Met, or any of their subsidiaries) an inves-
tigation which is pending on the Closing Date relating
to the transactions contemplated by this Agreement and
between the date of this Agreement and the Closing
Date, no action or proceeding shall have been insti-
tuted or, to the knowledge of the Sullivans, the
Sullivan Trusts, Perma-Fix or Chem-Met, shall have
been threatened before a court or other governmental
body or by any public authority to restrain or
prohibit the transactions contemplated by this
Agreement or to obtain damages in respect thereof.
9.2.5 Opinion of Counsel of Perma-Fix. The TPS Trust shall
have received from Conner & Winters, a Professional
Corporation, counsel to Perma-Fix, or such other
counsel reasonably acceptable to the TPS Trust and its
counsel, an opinion, dated the Closing Date, with the
form and content thereof reasonably satisfactory to
Chem-Met and its counsel.
9.3 Termination of Agreement and Abandonment of Acquisition.
Except as otherwise provided in Sections 8.1.1 and 8.21
hereof, this Agreement and the transactions contemplated
hereby may be terminated at any time before the Closing, as
follows and in no other manner:
9.3.1 Conditions of the Sullivans, the Sullivan Trusts or
Chem-Met Not Met. By Perma-Fix if, by June 30, 1999
the conditions set forth in Section 9.1 of this
Article 9 shall not have been met (or waived as
provided in Article 10 of this Agreement).
9.3.2 Conditions of Perma-Fix Not Met. By the Sullivans if,
by June 30, 1999, the conditions set forth in Section
9.2 of this Article 9 shall not have been met (or
waived as provided in Article 10 of this Agreement).
9.3.3 Termination by Perma-Fix or the Sullivans under
Section 9.3 of the Chem-Con Agreement. By Perma-Fix
or by the Sullivans if the Chem-Con Agreement is
terminated pursuant to the terms thereof.
9.3.4 Mutual Consent. By the mutual written consent of both
Perma-Fix and Chem-Met
9.4 Expenses. Each party shall bear its own out-of-pocket
expenses incurred in connection with the transactions
contemplated by this Agreement, including, without
limitation, all legal, accounting, consulting, brokers,
advisory, travel, communications and other similar fees and
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expenses; provided, however, that any and all such expenses
incurred by Chem-Met in connection with this Agreement and
consummation of the transactions contemplated by this
Agreement shall be considered as incurred by the TPS Trust
and shall be paid by the TPS Trust.
ARTICLE 10
TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS
___________________________________________________
10.1 Termination. In the event that this Agreement shall be
terminated pursuant to Section 9.3 hereof, all further
obligations of the parties hereto under this Agreement shall
terminate without further liability of any party to another
and each party hereto will pay its own costs and expenses
incident to its negotiation and preparation of this Agreement
and to its performance and compliance with all agreements and
conditions contained herein on its part to be performed or
complied with, including the fees, expenses and disbursements
of its counsel.
10.2 Waiver. If any of the conditions specified in Section 9.1 of
Article 9 hereof has not been satisfied, Perma-Fix may
nevertheless at the election of Perma-Fix proceed with the
transactions contemplated hereby; and, if any of the condi-
tions specified in Section 9.2 of Article 9 hereof has not
been satisfied, the TPS Trust may nevertheless at the TPS
Trust' election proceed with the transactions contemplated
hereby. Any such election to proceed shall be evidenced by
a certificate executed on behalf of the electing party. Any
such waiver shall not be considered as a waiver of any of the
other terms and provisions of this Agreement by the electing
party.
ARTICLE 11
INDEMNIFICATION AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES
______________________________
11.1 Indemnification by the Sullivans and the Sullivan Trusts.
The Sullivans and the Sullivan Trusts shall, jointly and
severally, defend, indemnify and hold harmless each of Perma-
Fix, Chem-Met, and each of their officers, directors,
employees, agents, representatives and Affiliates from and
against any and all claims, judgments, demands, damages,
penalties, fines, losses, orders (judicial or
administrative), decrees, liabilities, obligations, costs,
claims and expenses (including, without limitation,
reasonable attorneys' fees and accountant fees) which any of
Perma-Fix, and/or each of their officers, directors,
employees, agents, representatives and Affiliates incurs or
suffers or may incur or suffer at any time as a result of or
in connection with or arising out of (i) any representation
or warranty made by any of Chem-Met, the Sullivans and/or the
Sullivan Trusts in this Agreement or any certificate or other
document delivered to Perma-Fix pursuant to this Agreement
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that is false or misleading; (ii) any breach of or failure to
perform any agreements, covenants, promises or obligations of
Chem-Met, the Sullivans and/or Sullivan Trusts contained in
this Agreement; (iii) any liabilities, obligations or claims
arising in any way from any and all federal or state income
tax liability which Chem-Con, Chem-Met and/or Quanta may
incur or be liable to pay for any reason whatsoever for any
and all periods prior to the Closing Date; (iv) any and all
other liabilities, obligations or claims incurred by Quanta
prior to the Closing Date or arising in any way in connection
with the business or operations of Quanta prior to the
Closing Date and which have not been disclosed to Perma-Fix
in writing on or prior to the date of this Agreement; (v) any
liabilities, obligations or claims brought under CERCLA or
RCRA or any analogous state statute for the release or
threatened release of any hazardous substances (as defined in
CERCLA) or hazardous waste (as defined in RCRA) in which
Sullivan or Chem-Met knew was pending or threatened against
Chem-Met as of the date hereof or at the Closing Date but
failed for any reason to disclose such in this Agreement or
was, directly or indirectly, caused by or resulted from the
knowing or willful violation by Sullivan or Chem-Met on or
prior to the Closing Date of CERCLA, RCRA or any analogous
state statute; or (vi) any and all liabilities, obligations,
or claims arising in any way from any hazardous waste
facility gross tax that may be due under Fl. St. Section 403.7215
(and any predecessor statute) for which Chemical Florida may
be liable or required to pay for any reason whatsoever prior
to January 1, 1999.
11.2 Indemnification as to Four County Landfill. The Sullivans
and the Sullivan Trusts shall, jointly and severally, defend,
indemnify and hold harmless each of Perma-Fix, Chem-Met and
each of their officers, directors, employees, agents,
representatives and Affiliates from and against any and all
claims, demands, damages, liabilities, obligations, costs,
and expenses which any of Perma-Fix, Chem-Met and/or each of
their officers, directors, employees, agents, representatives
and Affiliates incurs and suffers, or may incur or suffer, at
any time as a result of or in connection with the Four County
Landfill; provided however, that the Sullivans and the
Sullivan Trusts (i) shall not have any liability under this
Section 11.2 if there are no claims or demands, or a series
of claims or demands, against Perma-Fix or Chem-Met and/or
any of their officers, directors, employees, agents,
representatives or Affiliates that exceed, in the aggregate,
$900,000 relating to or in connection with the Four County
Landfill, and (ii) the Sullivans and the Sullivan Trusts
liability under this Section 11.2 shall be further limited to
one-half of the amount of the total of any and all claims,
demands, damages, liabilities or obligations of or against
Perma-Fix or Chem-Met or any of their officers, directors,
employees, agents, representatives or Affiliates in excess of
$900,000.00 relating to or in connection with, or arising out
of the Four County Landfill, and any withdrawal by the
Indiana Department of Environmental Management ("IDEM") of
IDEM's approval of the Agreed Order (as defined below)
between Chem-Met, IDEM, Office of the Indiana Attorney
General, Four County Landfill Group and their respective
members and the Four County Landfill Operable Unit #1 RD/RA
Group and their respective members, executed by the parties
to the Agreed Order during February 1999, relating to
Chem-Met's settlement of any and all claims, liabilities or
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obligations of Chem-Met relating to or in connection with the
Four County Landfill (the "Agreed Order") as a result of
timely comments and objections filed during the notice and
thirty (30) day comment period contemplated by the Agreed
Order. The Sullivans, the Sullivan Trusts, Perma-Fix and
Chem-Met further agree that if the prior approval by IDEM of
the Agreed Order is not withdrawn within a reasonable period
following the expiration of the notice and thirty (30) day
comment period contemplated by the Agreed Order and the final
resolution of any timely comments or objections submitted or
asserted with respect thereto, the obligation of the
Sullivans and the Sullivan Trusts under this Section 11.2
shall terminate.
11.3 Notice of Claim. Perma-Fix shall give the Sullivans and the
Sullivan Trusts a written notice (the "Notice of Claim")
within ninety (90) days of the discovery of any matter in
respect of which the right to indemnification contained in
Section 11 can be claimed. Notwithstanding the foregoing,
failure to give such notice will not terminate any obligation
of the Sullivans and the Sullivan Trusts hereunder.
11.4 Survival of Representations and Remedies. All representa-
tions and warranties contained in this Agreement shall
survive the Closing, regardless of the investigation made by
either party hereto. This Agreement and all covenants and
agreements contained in this Agreement shall survive the
Closing.
ARTICLE 12
MISCELLANEOUS
_____________
12.1 Entire Agreement and Amendment. This Agreement and the Chem-Con
Agreement, including the Exhibits and Schedules hereto and thereto,
sets forth the entire agreement and understanding between the parties
and merges and supersedes all prior discussions, agreements and under-
standings of every kind and nature among them as to the subject
matter hereof, and no party shall be bound by any condition, defini-
tion, warranty or representation other than as expressly provided
for in this Agreement, the Chem-Con Agreement or as may be on a date
on or subsequent to the date hereof duly set forth in writing signed
by each party which is to be bound thereby. Unless otherwise
expressly defined, terms defined in the Agreement shall have the
same meanings when used in any Exhibit or Schedule and terms defined in
any Exhibit or Schedule shall have the same meanings when used in the
Agreement or in any other Exhibit or Schedule. This Agreement
(including the Exhibits and Schedules hereto) shall not be changed,
modified or amended except by a writing signed by each party to be
charged and this Agreement may not be discharged except by performance
in accordance with its terms or by a writing signed by each party to
be charged.
12.2 Taxes. Any Taxes in the nature of a sales or transfer tax
(including any realty transfer tax or realty gains transfer
tax), and any stock transfer tax, payable on the consummation
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of any other transaction contemplated hereby shall be paid by
the Sullivans and the Sullivan Trusts.
12.3 Governing Law. This agreement shall be construed in accord-
ance with and governed by the Laws of Delaware, without
regard to the principles of conflicts of laws thereof.
12.4 Benefit of Parties; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
The Agreement may not be assigned by any of the parties
hereto except with the prior written consent of the other
parties hereto. Nothing herein contained shall confer or is
intended to confer on any third party or entity which is not
a party to this Agreement any rights under this Agreement.
12.5 Pronouns. Whenever the context requires, the use in this
Agreement of a pronoun of any gender shall be deemed to refer
also to any other gender, and the use of the singular shall
be deemed to refer also to the plural.
12.6 Headings. The headings in the sections, paragraphs,
Schedules and Exhibits of this Agreement are inserted for
convenience of reference only and shall not constitute a part
hereof. The words "herein", "hereof", "hereto" and
"hereunder", and other words of similar import refer to this
Agreement as a whole and not to any particular provision of
this Agreement.
12.7 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if sent by
registered mail or certified mail, postage prepaid,
addressed:
If to Perma-Fix: Perma-Fix Environmental Services, Inc.
1940 Northwest 67th Place
Gainesville, Florida 32653
Attention: President
With a copy to: Irwin H. Steinhorn, Esquire
Conner & Winters
One Leadership Square
211 North Robinson, Suite 1700
Oklahoma City, Oklahoma 73102
If to Chem-Met,
the Sullivans and
the Sullivan
Trusts: Mr. Thomas P. Sullivan
1021 Harvard Road
Grosse Pointe Park, Michigan 48230
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With a copy to: Peter E. O'Rourke, Esq.
O'Rourke & Myers
241 Lewiston Road
Grosse Pointe Farms, Michigan 48236
or to such other address as shall be furnished in writing by
either party. Any such notice or communication shall be
deemed to have been given as of three (3) days after posting,
one (1) day after next day delivery service or upon personal
delivery.
12.8 Time. Time is of the essence of this Agreement.
12.9 Severability. Each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid
under applicable law; but, if any provision of this Agreement
is held to be invalid under applicable law, such provision
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
12.10 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered
one and the same agreement and shall become effective
when one or more counterparts have been signed by each
of the parties hereto and delivered to each of the
other parties hereto.
12.11 Termination of Previous Agreement. Effective upon the
execution of this Agreement the Agreement and Plan of
Merger as defined in the sixth WHEREAS clause of this
Agreement is rendered null and void and of no effect
whatsoever and this Agreement is entered into to
replace such Agreement and Plan of Merger in its
entirety.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
50
<PAGE>
IN WITNESS WHEREOF, the parties hereto execute this
Agreement on the 27th day of May, 1999.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/ Louis Centofanti
_________________________________________
Dr. Louis F. Centofanti
President
CHEM-MET SERVICES, INC.
By: /s/ Thomas P. Sullivan
_________________________________________
Thomas P. Sullivan
President
THE THOMAS P. SULLIVAN LIVING TRUST,
Dated September 6, 1978
By: /s/ Thomas P. Sullivan
_________________________________________
Thomas P. Sullivan, Sole Trustee, under
the Thomas P. Sullivan Living Trust,
Dated September 6, 1978, and any
Amendments thereto.
THE ANN L. SULLIVAN LIVING TRUST,
Dated September 6, 1978
By: /s/ Ann L. Sullivan
_________________________________________
Ann L. Sullivan, Sole Trustee, under the
Ann L. Sullivan Living Trust, Dated
September 6, 1978, and any amendments
thereto.
<PAGE>
THOMAS P. SULLIVAN
By: /s/ Thomas P. Sullivan
_________________________________________
Thomas P. Sullivan, individually
ANN L. SULLIVAN
By: /s/ Ann L. Sullivan
_________________________________________
Ann L. Sullivan, individually
52
AMENDMENT AND JOINDER TO LOAN AND SECURITY AGREEMENT
This Amendment and Joinder to Loan and Security Agreement (the
"Amendment") made and entered into as of this 27th day of May, 1999,
by and between Perma-Fix Environmental Services, Inc. ("Perma-
Fix"), a Florida corporation, and its direct and indirect
subsidiaries named on the signature pages hereof, jointly and
severally (the "Borrowers"; all references to "Borrowers" shall
mean each Borrower and all of the Borrowers, individually and
collectively, jointly and severally), and CONGRESS FINANCIAL
CORPORATION (FLORIDA), a Florida corporation ("Lender").
WITNESSETH:
WHEREAS, Lender and the Borrowers (other than the Additional
Borrowers referred to below) entered into a Loan and Security
Agreement dated as of January 15, 1998 (the "Original Loan
Agreement"; the Original Loan Agreement, as the same may
hereafter be amended, including by this Amendment, is hereinafter
referred to as the "Loan Agreement"; all capitalized terms used
but not defined in this Amendment shall have the respective
meanings set forth in the Original Loan Agreement);
WHEREAS, Perma-Fix is acquiring all of the issued and
outstanding shares of stock of Chem-Met Services, Inc. ("Chem-
Met"), a Michigan corporation, Chemical Conservation of Georgia,
Inc. ("Chem Con-Georgia"), a Georgia corporation, and Chemical
Conservation Corporation ("Chem Con"), a Florida corporation
(collectively, the "Additional Borrowers");
WHEREAS, in connection with the foregoing transactions, the
Borrowers have requested that Lender consent to such transactions
and agree to extend credit to the Additional Borrowers under the
Loan Agreement; and
WHEREAS, in connection with the foregoing, the Lender has
required that certain terms and conditions of the Original Loan
Agreement be amended, and the joinder to the Loan Agreement of
the Additional Borrowers, as more fully set forth hereinbelow.
NOW, THEREFORE, in consideration of the premises, and for
other good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, the parties hereto
agree that the foregoing recitals are true and correct and
incorporated herein, and as follows:
I. Amendments to Loan Agreement. As used in this Amendment, all
references to sections and headings contained in Section I of this
Amendment are to those contained in the Original Loan Agreement.
The Original Loan Agreement is hereby amended, modified and
supplemented as follows:
1. Section 1. "Definitions" is hereby amended by:
(a) adding the following definitions:
"Additional Borrowers", Chem-Met, Chem Con, and Chem
Con-Georgia shall have the meanings set forth in the
recitals to the Amendment.
"Amendment" shall mean the Amendment and Joinder to
Loan and Security Agreement dated as of May 27, 1999, by
and between Lender and Borrowers.
"Certification Invoice" shall mean as to any Account
arising under a contract with the United States or any
subdivision, the invoice therefor containing the
certification by the applicable Borrower to the
applicable U.S. governmental unit that, inter alia, the
services giving rise to such Account have been performed
in accordance with the related contract.
<PAGE>
<PAGE>
"Claims Act" shall have the meaning set forth in
Subsection 1.6(k).
"Purchased Stock" shall mean all of the issued and
outstanding shares of the Additional Borrowers.
"Seller" shall mean, collectively, the ALS Trust,
the TPS Trust, TPS and ALS.
"Subordination Agreement" shall mean that certain
Subordination Agreement dated of even date of the
Amendment, by and among the Thomas P. Sullivan Living
Trust ("TPS Trust"), the Ann L. Sullivan Living Trust
("ALS Trust") and Perma-Fix Environmental Services, Inc.
"Subordinated Indebtedness" shall mean the
Subordinated Debt (as defined in the Subordination
Agreement).
"Sullivan Mortgage" shall mean that certain Mortgage
dated on or about the date of the Amendment, made by
Chem-Met Services, Inc. in favor of the TPS Trust and the
ALS Trust.
"Transaction Documents" shall mean, collectively,
those certain Stock Purchase Agreements (the "Stock
Purchase Agreements"), dated May 27, 1999, the first by
and among Perma-Fix, Chem-Met, the TPS Trust, the ALS
Trust, Thomas P. Sullivan ("TPS") and Ann L. Sullivan
("ALS"), and the second by and among Perma-Fix, Chem Con,
Chem Con-Georgia, the TPS Trust, the ALS Trust, TPS and
ALS, all other agreements of transfer as are referred to
therein and all side letters with respect thereto and all
documents, instruments, and agreements executed or
delivered in connection therewith, as all of the
foregoing now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated, or
replaced; and
(b) by amending and restating the following definitions
in their entireties:
* * *
1.11 "Existing Unencumbered Real Property"
shall mean all Real Property of any Borrower not
subject of the Mortgages, including the Real
Property described on Composite Exhibit "C" to this
Agreement owned by Perma-Fix of Memphis, Inc., and
Perma-Fix of Ft. Lauderdale, Inc. and Perma-Fix
Treatment Services, Inc. located in Tulsa,
Oklahoma, respectively, as supplemented by Exhibit
"C" to this Amendment with respect to Real Property
respectively owned by Chem-Met Services, Inc.,
Chemical Conservation Corporation, and Chemical
Conservation of Georgia, Inc., as indicated on
Exhibit "C", but excluding the Real Property
located at Latham Street in Memphis, Tennessee
owned by Perma-Fix of Memphis, Inc. (the "Latham
Street Property"), the real property located in
Wayne County, Michigan owned by Chem-Met Services,
Inc., but solely to the extent such property is
encumbered by the Sullivan Mortgage, and the real
property located in Orange County, Florida owned by
Chemical Conservation Corporation, but solely, to
<PAGE>
the extent such properties are encumbered by the
mortgage by Sun Trust securing the Sun Trust Debt
and the Carrier Debt, as replaced by Sun Trust.
* * *
1.20 "Maximum Credit " shall mean, on any
date of determination, the amount of $11,000,000.
<PAGE>
<PAGE>
(c) by amending and restating part (k) of Section 1.6,
Eligible Accounts, as follows:
* * *
(k) The account debtors with respect to such
Accounts are not any foreign government, the United
States of America, any State, political
subdivision, department, agency or instrumentality
thereof, unless, if the account debtor is the
United States of America, any State, political
subdivision, department, agency or instrumentality
thereof, (i) the Federal Assignment of Claims Act
of 1940, as amended (the "Claims Act") or any
similar State or local law, if applicable, has been
complied with in a manner satisfactory to Lender;
(ii) on any date of determination by Lender, such
Accounts do not exceed twenty percent (20%) of all
otherwise Eligible Accounts on such date of
determination; and (iii) as to each such Account,
the Certification Invoice has been submitted by the
applicable Borrower to the applicable governmental
unit.
* * *
2. Section 2, Credit Facilities is hereby amended as follows:
(a) Subsection (c) of Section 2.1 Revolving Loans, is
hereby amended and restated in its entirety as follows:
(c) Except in Lender's discretion, the
aggregate amount of the Loans outstanding at any
time shall not exceed the Maximum Credit. In the
event that the outstanding amount of any component
of the Loans, or the aggregate amount of the
outstanding Loans exceed the amounts available
under the lending formulas or the Maximum Credit,
such event shall not limit, waive or otherwise
affect any rights of Lender in that circumstance or
on any future occasions and Borrowers shall, upon
demand by Lender, which may be made at any time or
from time to time, immediately repay to Lender the
entire amount of any such excess(es) for which
payment is demanded.
* * *
(b) Section 2.3 Term Loan is hereby amended and restated
in its entirety:
Section 2.3 Term Loan. On the date of the
Amendment, Lender is making a Term Loan to Borrowers in
the original principal amount of $3,750,000, which
constitutes a renewal of the Term Loan originally
extended on or about January 15, 1998, of which the
principal amount of $1,666,667 is outstanding as of the
date of the Amendment, and an increase thereto in the
principal amount of $,2,083,333. The Term Loan is: (a)
evidenced by a Term Promissory Note in the original
principal amount of $3,750,000 (the "Renewal Term Note")
duly executed and delivered by Borrowers to Lender
concurrently with the Amendment, which Renewal Term Note
renews and increases, but does not satisfy, the
Obligations evidenced by the Term Promissory Note in the
original principal amount of $2,500,000 outstanding as of
the date of this Amendment; (b) to be repaid, together
with interest and other amounts, in accordance with this
Agreement, the Renewal Term Note, and the other Financing
Agreements; and (c) secured by all of the Collateral.
<PAGE>
<PAGE>
3. Subsection 3.1(a) of Section 3.1 Interest is amended and
restated as follows:
Borrowers shall pay to Lender interest on the
outstanding principal amount of the Obligations at the
rate of one and three-quarters percent (1?%) per annum in
excess of the Prime Rate (subject to reduction as
provided hereinbelow), except that, at Lender's option,
without notice, Borrowers shall pay to Lender interest at
the rate of three and three-quarters percent (3?%) per
annum in excess of the Prime Rate: (i) on the
Obligations for (A) the period from and after the date
of termination hereof until such time as Lender has
received full and final payment of all such Obligations
(notwithstanding entry of any judgment against
Borrowers), and (B) the period from and after the date of
the occurrence of an Event of Default for so long as such
Event of Default is continuing as determined by Lender
and (ii) on the Revolving Loans at any time outstanding
in excess of the amounts available to Borrowers under
Section 2 (whether or not such excess(es), arise or are
made with or without Lender's knowledge or consent and
whether made before or after an Event of Default);
provided, however, that if no Event of Default shall have
occurred, if "net income/loss applicable to common stock"
for Borrowers is at least a positive $1,500,000, for
fiscal year 1999 or, if less in such year, for fiscal
year 2000, in either case as reflected in Borrowers'
applicable annual audited financial statements furnished
to Lender pursuant to Section 9.6 of this Agreement, from
and after the date of receipt by Lender of such financial
statements, this Section 3.1(a) shall be deemed amended
in part by substituting above the phrase . . . "one and
one-half percent (1 1/2%) in respect of the principal of
Revolving Loans and one and three-quarters percent (1?%)
in respect of the Term Loan" . . . for the phrase . . .
"one and three-quarters percent (1?%)" . . . . .
4. Section 3.4 Servicing Fee is amended by substituting
therein the amount of $2,000 wherever the amount of $1,500 appears,
which increased amount shall be effective commencing the next
calendar month after the month containing the date of this
Amendment.
5. Section 3.5 Unused Line Fee is amended by (a) substituting
the term "Maximum Credit" wherever the amount of $4,500,000 appears
and (b) deleting the word "Revolving" from Section 3.5.
6. (a) The preamble to Section 5, Grant of Security
Interest, is hereby amended and restated as follows:
To secure payment and performance of all
Obligations, each Borrower hereby grants and regrants, as
appropriate, to Lender a continuing security interest in,
a lien upon, and a right of set off against, and hereby
assigns to Lender as security, the following property and
interests in property of such Borrower, whether now owned
or hereafter acquired or existing, and wherever located
(collectively, the "Collateral"):
* * *
<PAGE>
(b) The Borrowers agree that Section 5.2 is supplemented
by the following:
..., including, without limitation, all of Perma-
Fix's right, title and interest in, to, and under, the
Transaction Documents, including, without limitation, all
of the benefits of any representations and warranties
<PAGE>
<PAGE>
provided by the Seller, and any and all of Perma-Fix's
rights to indemnification from the Seller or any other
person contained therein. Borrowers agree that no
provision contained in this Agreement shall impose on
Lender any of the obligations or liabilities of Perma-Fix
under the Transaction Documents. In addition, Borrowers
hereby indemnify Lender and hold it harmless from any and
all claims, actions, suits, losses, damages, costs,
expenses, fees, obligations and liabilities which may be
incurred by or imposed upon Lender by Seller or any other
third party by virtue of Lender's lien on Perma-Fix's
right, title and interest in, to, and under the
Transaction Documents. The foregoing shall survive
payment of the Obligations in full and termination of the
Agreement. Borrowers further acknowledge and agree that
following the occurrence of an Event of Default, Lender
shall be entitled, at its option, to enforce any and all
Perma-Fix's rights and remedies under the Transaction
Documents and/or under applicable law.
7. Section 8 Representations and Warranties, is hereby
supplemented by the following:
* * *
8.13 Acquisition of Purchased Stock.
(a) The Transaction Documents and the
transactions contemplated thereunder have been duly
executed, delivered and performed in accordance with
their terms by the respective parties thereto in all
material respects, including the fulfillment (not merely
the waiver, except as may be disclosed to Lender and
consented to in writing by Lender) of all material
conditions precedent set forth therein and giving effect
to the terms of the Transaction Documents and the
assignments to be executed and delivered by Seller
thereunder, Perma-Fix acquired and has good and
marketable title to the Purchased Stock, free and clear
of all claims, liens, pledges and encumbrances of any
kind, except as disclosed in writing to Lender.
(b) All actions and proceedings required by
the Transaction Documents, applicable law or regulation
(including, but not limited to, compliance with the
Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as
amended) have been taken and the transactions required
thereunder have been duly and validly taken and
consummated.
(c) No court of competent jurisdiction has
issued any injunction, restraining order or other order
which prohibits consummation of the transactions
described in the Transaction Documents and no
governmental or other action or proceeding has been
threatened or commenced, seeking any injunction,
restraining order or other order which seeks to void or
otherwise modify the transactions described in the
Transaction Documents.
<PAGE>
(d) Borrower has delivered, or caused to be
delivered, to Lender true, correct and complete copies of
the Transaction Documents.
<PAGE>
<PAGE>
8.14 Capitalization.
All of the issued and outstanding shares of
capital stock of each of the Additional Borrowers are
directly and beneficially owned and held by Perma-Fix and
all of such shares have been duly authorized and are
fully paid and non-assessable, free and clear of all
claims, liens, pledges and encumbrances of any kind,
except as disclosed in writing to Lender.
8. Section 9.9 Indebtedness is hereby supplemented by the
following:
* * *
; and (e) the Subordinated Indebtedness which
indebtedness is subject and subordinate in right of
payment to the right of Lender to receive the prior final
payment and satisfaction in full of all of the
Obligations; provided, that: (i) the principal amount of
indebtedness evidenced by the Notes (as defined in the
Subordination Agreement) shall not exceed $4,700,000,
less the aggregate amount of all repayments, repurchases
or redemptions, whether optional or mandatory in respect
thereof, plus interest thereon at the rate provided for
in such agreement or instrument as in effect on the date
hereof, nor shall any other Subordinated Indebtedness be
increased over the amounts contemplated in the
Transaction Documents in effect concurrently with this
Amendment (ii) Borrower shall not, directly or
indirectly, make any payments in respect of the
Subordinated Indebtedness (other than the distribution of
common stock permitted under Section II(v) of the
Amendment), including, but not limited to, any
prepayments or other non-mandatory payments, except that
until an Event of Default, or event which with notice or
passage of time or both would constitute an Event of
Default, shall exist or have occurred and be continuing,
Borrower may make regularly scheduled payments of
principal and interest in accordance with the terms of
such agreement or instrument as in effect on the date
hereof, (iii) Borrower shall not, directly or indirectly,
(A) amend, modify, alter or change any terms of the
Subordinated Indebtedness, including, without limitation,
the Sullivan Mortgage, or (B) redeem, retire, defease,
purchase or otherwise acquire such indebtedness, or set
aside or otherwise deposit or invest any sums for such
purpose except as permitted under the Subordination
Agreement and this Agreement, and (iv) Borrower shall
furnish to Lender all notices, demands or other materials
concerning such indebtedness either received by Borrower
or on its behalf, promptly after receipt thereof, or sent
by Borrower or on its behalf, concurrently with the
sending thereof, as the case may be.
* * *
9. Section 9.11 Dividends and Redemptions is hereby amended
and restated in its entirety as follows:
Section 9.11 Dividends and Redemptions. No Borrower
shall, directly or indirectly, declare or pay any
dividends (except for dividends declared and paid from
time to time in respect of preferred stock issued and
outstanding on the date of this Amendment as set forth on
Schedule 9.11 hereto and dividends to Perma-Fix from its
subsidiaries or to or from subsidiaries of any other
Borrower for the purpose of ultimately dividending a like
<PAGE>
<PAGE>
amount to Perma-Fix), on account of any shares of class
of capital stock of any Borrower now or hereafter
outstanding, or set aside or otherwise deposit or invest
any sums for such purpose, or redeem, retire, defease,
purchase or otherwise acquire any shares of any class of
capital stock (or set aside or otherwise deposit or
invest any sums for such purpose) (other than the
redemption of various series of preferred stock of Perma-
Fix existing as of the date of this Amendment in an
aggregate amount not to exceed $750,000) for any
consideration other than common stock or apply or set
apart any sum, or make any other distribution (by
reduction of capital or otherwise) in respect of any such
shares or agree to do any of the foregoing.
10. (a) Section 10.1 Events of Default is amended as
follows:
(a) In Subsection (a), by substituting the phrase "five
(5)" wherever the phrase "ten (10)" appears; and
(b) by adding Subsection (n):
(n) any party to the Subordination Agreement
shall breach any term thereof, or revoke or
contest or attempt to revoke or contest any terms
or conditions thereof.
11. Section 12.1 Term is amended by:
(a) deleting the word ". . . hereof . . ." in the second
line and substituting the words ". . . of the Amendment . . ."
therefor in Subsection 12.1(a); and
(b) by deleting Parts (i), (ii) and (iii) of Subsection
12.1(c) and substituting the following therefor:
* * *
Amount Period
______ ______
(i) 1.5% of Maximum Credit From the date of the Amendment to and
including January 14, 2000; and
(ii) 1.0% of Maximum Credit From January 15, 2000 to and including
January 14, 2001.
* * *
12. Exhibit "A", Information Certificate, to the Original
Loan Agreement is hereby replaced by Exhibit "A" to this Amendment.
II. Consent. Subject to the terms and conditions of this
Amendment and all of the Financing Agreements, Borrower has
requested that Lender consent, and Lender hereby consents, to the
acquisitions of the Shares (as respectively defined in the Stock
Purchase Agreements) and notwithstanding the provisions of Section
9.7 of the Original Loan Agreement, that (i) shares of Common Stock
of Perma-Fix shall be issued to the ALS Trust pursuant to the terms
of the Stock Purchase Agreements, (ii) Chem-Met, Chem Con and Chem
Con-Georgia will hereafter be subsidiaries of Perma-Fix; (iii) the
payments to resolve the litigations referred to in Section IV(K) of
this Amendment, (iv) the repayment of Charter Bank and the Michigan
Strategic Fund of all amounts due such entities set forth on payoff
letters heretofore provided to Lender, (v) the continuation of the
Sun Trust Debt and an increase thereto to repay all amounts due
under the Carrier Debt (as such terms are defined in and as
required by the Stock Purchase Agreements) (as which Borrowers
agree that they shall not increase the amount thereof from that
outstanding on the date of this Amendment, and shall upon execution
thereof, deliver to Lender true and complete copies of the Sun
Trust loan documents, and (vi) the issuance of the Guarantees under
the Stock Purchase Agreements (but not to the payment of cash or
any other consideration thereunder other than the issuance of
<PAGE>
<PAGE>
shares of common stock of Perma-Fix so long as a change of control
as provided in 10.(j) does not occur thereby). The foregoing
consents shall be effective in this specific instance only.
Accordingly, except for such transactions set forth in the
Transaction Documents, Lender shall have no obligation to (i)
consent to any departure from the terms and conditions of the Loan
Agreement or any other Financing Agreements whether heretofore or
hereafter occurring, or (ii) waive any Event of Default occurring
under the Loan Agreement or any other Financing Agreement now
existing or hereafter occurring, including, without limitation,
pursuant to 10.1(j) of the Loan Agreement, in either case, whether
arising out of similar or dissimilar transactions to the
transactions contemplated in the Transaction Documents, or
otherwise.
III. Joinder to Loan Agreement and Other Financing Agreements.
1. (a) Each Additional Borrower agrees that from and after
the date of this Amendment, it shall be joined in the Loan
Agreement as a "borrower" with joint and several liability with
each of the other Borrowers and, accordingly, all references to the
term "Borrowers" in the Loan Agreement shall have the meaning set
forth in this Amendment.
(b) Each Additional Borrower acknowledges that it has
received and reviewed the Original Loan Agreement, a copy of which
is annexed to this Amendment as Exhibit "1", and all other
Financing Agreements, and agrees to be bound by all of the terms
and conditions of the Loan Agreement and all of the other Financing
Agreements applicable to the "Borrowers." To this effect, each of
the Additional Borrowers acknowledges and agrees that pursuant to
Section 5 of the Agreement, as of the date of this Amendment, it is
granting to the Lender a first priority security interest in and to
the Collateral described in the Loan Agreement, whether now owned
by it or in which it has an interest, or hereafter acquired,
created, or arising, subject only to those liens and security
interests expressly permitted by the Loan Agreement.
(c) Each Additional Borrower acknowledges and agrees
that by execution of this Amendment, as of the date of this
Amendment and hereafter, it is and shall be making all of the
representations and warranties of a Borrower, whether in the Loan
Agreement, the other Financing Agreements, or otherwise. To this
effect, annexed to this Amendment are Exhibits "A", "B", and "C",
and Schedules 8.4, 8.8, 8.9, 8.9, and 9.10, which Exhibits and
Schedules are hereby made a part of the sections of the Loan
Agreement referencing such Exhibits and Schedules. The Exhibits and
Schedules supplement but do not replace the Exhibits and Schedules
heretofore delivered to Lender in connection with the Original Loan
Agreement.
IV. Conditions Precedent.
1. (a) Borrower acknowledges and agrees that as a condition
precedent to the effectiveness of the consent of Lender pursuant to
Part II of this Amendment or the increase in the amount of the
Loans contemplated herein:
(b) all requisite corporate action and proceedings in
connection with this Loan Agreement and the other Financing
Agreements shall be satisfactory in form and substance to Lender,
and Lender shall have received all information and copies of all
documents, including, without limitation, records of requisite
corporate action and proceedings which Lender may have requested in
connection therewith, such documents where requested by Lender or
its counsel to be certified by appropriate corporate officers or
governmental authorities;
(c) no material adverse change shall have occurred in
the assets, business or prospects of the Additional Borrowers or
the other Borrowers since the date of Lender's latest field
examination and no change or event shall have occurred which would
<PAGE>
<PAGE>
impair the ability of Borrowers or any Obligor to perform its
obligations hereunder or under any of the other Financing
Agreements to which it is a party or of Lender to enforce the
Obligations or realize upon the Collateral;
(d) Lender shall have received, in form and substance
satisfactory to Lender, all consents, waivers, acknowledgments and
other agreements from third persons which Lender may deem necessary
or desirable in order to permit, protect and perfect its security
interests in and liens upon the Collateral or to effectuate the
provisions or purposes of this Agreement and the other Financing
Agreements, including, without limitation, acknowledgments by
lessors, mortgagees and warehousemen of Lender's security interests
in the Collateral, waivers by such persons of any security
interests, liens or other claims by such persons to the Collateral
and agreements permitting Lender access to, and the right to remain
on, the premises to exercise its rights and remedies and otherwise
deal with the Collateral;
(e) Lender shall have received, in form and substance
satisfactory to Lender, such opinions of counsel to Borrowers and
the Seller with respect to the Financing Agreements, the
Transaction Documents, and such other matters as Lender may
request;
(f) Lender shall have been named loss payee upon
endorsements satisfactory to the Lender under the policies of
insurance required to be maintained by each Borrower pursuant to
the Loan Agreement and all such policies of insurance shall be
reviewed by and be satisfactory to Lender;
(g) such other Financing Agreements and all instruments
and documents hereunder and thereunder as Lender may require shall
have been duly executed and delivered to Lender, in form and
substance satisfactory to Lender;
(h) Lender shall have received, in form and substance
satisfactory to Lender, evidence that the Transaction Documents
have been duly executed and delivered by and to the appropriate
parties thereto and the transactions contemplated under the terms
of the Transaction Documents have been consummated prior to or
contemporaneously with the execution of this Amendment;
(i) Lender shall have received, in form and substance
satisfactory to Lender, a pro-forma balance sheet of Borrower
reflecting the initial transactions contemplated hereunder,
including, without limitation, (i) the consummation of the
acquisition of the Purchased Stock by Perma-Fix from Seller and the
other transactions contemplated by the Transaction Documents and
(ii) the Loans provided by Lender to Borrower on the date of this
Amendment and the use of the proceeds of the initial Loans as
provided herein, accompanied by a certificate, dated of even date
herewith, of the chief financial officer of Borrower, stating that
such pro-forma balance sheet represents the reasonable, good faith
opinion of such officer as to the subject matter thereof as of the
date of such certificate;
(j) Lender shall have received, in form and substance
satisfactory to Lender, the agreement of Seller consenting to the
collateral assignment by Borrower or any Obligor to Lender of all
of Borrower's and such Obligor's rights and remedies and claims for
damages and other relief under the Transaction Documents and
granting Lender such other rights as Lender may require, duly
authorized, executed and delivered by Seller;
<PAGE>
(k) Evidence deemed satisfactory to Lender of the
concurrent final settlement of the litigation in respect of the
"Four County Landfill Site," pursuant to the terms of the Stock
<PAGE>
<PAGE>
Purchase Agreements and the payoff and settlement of Chemfix
Technologies, Inc. litigation.
2. This Amendment constitutes a part of, and shall be
construed in connection with, the Original Loan Agreement, and all
terms, covenants, conditions, representations and warranties shall
remain in full force in effect and are incorporated herein by
reference as if fully set forth herein. In the event of any
inconsistencies between the provisions of this Amendment and
elsewhere in the Loan Agreement, the provisions of this Amendment
shall in all respects govern and control.
V. Other Matters.
1. Borrowers are paying Lender a closing fee of $40,000 on or
before the date of this Amendment, which fee shall be deemed to be
fully earned by Lender upon execution of this Amendment by Lender
and Borrowers.
2. As to contracts with the United States or any subdivision
which are in existence as of the date of this Amendment or which
may hereafter arise, so long as copies of such contracts have
heretofore been delivered to Lender, Lender agrees that Accounts
arising thereunder shall be deemed to be Eligible Accounts if such
Accounts would otherwise be deemed to be Eligible Accounts but for
the fact that the applicable Claims Act provisions have not been
complied with, for a period of one hundred and eighty (180) days
after the date of this Amendment as to such existing contracts and
ninety (90) days from the date of delivery of any hereafter arising
contracts. In any event, Borrower agrees to use its best efforts
to cause compliance with the Claims Act as soon as practicable.
Notwithstanding anything contained herein or otherwise to the
contrary, none of the Accounts arising under any such contract
shall be Eligible Accounts unless Lender and Borrowers are in
compliance with the applicable Claims Act at all times after the
applicable ninety (90) or one hundred and eighty (180) day period,
as applicable, provided above for compliance with the Claims Act .
3. Each Borrower certifies to Lender that (after giving
effect to this Amendment) all representations and warranties of
such Borrower contained in the Loan Agreement are, true and correct
as of the date of this Amendment, except to the extent such
representations and warranties relate solely to an earlier date.
4. Each Borrower certifies to Lender that (after giving
effect to this Amendment) no Event of Default under the Loan
Agreement, or event which with the passage of time or the giving of
notice, or both, would constitute an event of default under the
Loan Agreement, has occurred and is continuing.
5. (a) In no way in limitation of the provisions of Section
9.15 of the Loan Agreement, Borrower will pay all out-of-pocket
expenses incurred by Lender in connection with the preparation of
this Amendment and of the other Financing Agreements, including,
all amendments, supplements or modifications hereafter made to any
of the foregoing after the date of this Amendment, and the closing
of the transactions contemplated herein and therein, including,
without limitation, the reasonable fees and expenses of counsel for
Lender. In addition, Borrower agrees to pay all documentary stamp
taxes, intangible taxes, filing or recording fees required in
connection with the borrowings hereunder and creating, perfecting
and preserving Lender's security interest in the Collateral.
6. (a) EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION
<PAGE>
WITH THIS AMENDMENT, THE LOAN AGREEMENT, ALL DOCUMENTS AT ANY TIME
MADE IN CONNECTION WITH THIS AMENDMENT, THE LOAN AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN. FURTHER, EACH
BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE
LENDER NOR THE LENDER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. FINALLY, EACH BORROWER ACKNOWLEDGES THAT THE LENDER HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE
PROVISIONS OF THIS PARAGRAPH.
7. Each Borrower agrees that it has no off-sets, defenses or
counterclaims to the payment of the Obligations or the performance
by it under the Loan Agreement or the other Financing Agreements.
Further, each Borrower agrees that it has no claims of any nature
whatsoever against the Lender, its parent, subsidiaries,
affiliates, divisions, officers, directors, employees, agents,
stockholders, successors, or assigns arising out of or related to
the Obligations, the other Financing Agreements, or otherwise.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed, sealed and delivered the day and
year first above written.
BORROWERS:
PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware
corporation
By: /s/ Richard T. Kelecy
______________________________
Richard T. Kelecy, Chief
Financial Officer
INDUSTRIAL WASTE MANAGEMENT, INC.,
a Missouri corporation
By: /s/ Richard T. Kelecy
_____________________________
Richard T. Kelecy, Chief
Financial Officer
SCHREIBER, YONLEY & ASSOCIATES
(formerly known as Schreiber, Grana
& Yonley, Inc.), a Missouri
corporation
By: /s/ Richard T. Kelecy
_____________________________
Richard T. Kelecy, Chief
Financial Officer
<PAGE>
PERMA-FIX TREATMENT SERVICES, INC.,
an Oklahoma corporation
By: /s/ Richard T. Kelecy
________________________________
Richard T. Kelecy, Chief
Financial Officer
<PAGE>
<PAGE>
PERMA-FIX, INC., an Oklahoma
corporation
By: /s/ Richard T. Kelecy
________________________________
Richard T. Kelecy, Chief
Financial Officer
MINTECH, INC., an Oklahoma
corporation
By: /s/ Richard T. Kelecy
________________________________
Richard T. Kelecy, Chief
Financial Officer
RECLAMATION SYSTEMS, INC., an
Oklahoma corporation
By: /s/ Richard T. Kelecy
________________________________
Richard T. Kelecy, Chief
Financial Officer
PERMA-FIX OF NEW MEXICO, INC.,
a New Mexico corporation
By: /s/ Richard T. Kelecy
________________________________
Richard T. Kelecy, Chief
Financial Officer
PERMA-FIX OF FLORIDA, INC.,
a Florida corporation
By: /s/ Richard T. Kelecy
_______________________________
Richard T. Kelecy, Chief
Financial Officer
PERMA-FIX OF MEMPHIS, INC.,
a Tennessee corporation
By: /s/ Richard T. Kelecy
______________________________
Richard T. Kelecy, Chief
Financial Officer
<PAGE>
<PAGE>
PERMA-FIX OF DAYTON, INC.,
an Ohio corporation
By: /s/ Richard T. Kelecy
______________________________
Richard T. Kelecy, Chief
Financial Officer
PERMA FIX OF FT. LAUDERDALE, INC.,
a Florida corporation
By: /s/ Richard T. Kelecy
________________________________
Richard T. Kelecy, Chief
Financial Officer
CHEM-MET SERVICES, INC.,
a Michigan corporation
By: /s/ Richard T. Kelecy
________________________________
Name: Richard T. Kelecy
Title: Chief Financial Officer
CHEMICAL CONSERVATION OF GEORGIA,
INC., a Georgia corporation
By: /s/ Richard T. Kelecy
______________________________
Name: Richard T. Kelecy
Title: Chief Financial Officer
CHEMICAL CONSERVATION CORPORATION,
INC., a Florida corporation
By: /s/ Richard T. Kelecy
________________________________
Name: Richard T. Kelecy
Title: Chief Financial Officer
LENDER:
CONGRESS FINANCIAL CORPORATION
(FLORIDA)
By:
______________________________
Name:
Title:
30060595v6
THIS PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT WITH
CONGRESS FINANCIAL CORPORATION (FLORIDA).
PROMISSORY NOTE
$1,230,000 May 28, 1999
FOR VALUE RECEIVED, the undersigned, PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Maker"), promises to pay
to the order of the ANN L. SULLIVAN LIVING TRUST, dated September
6, 1978 ("Payee"), in lawful money of the United States of America,
the principal sum of One Million Two Hundred Thirty Thousand and
no/100 Dollars ($1,230,000), together with interest on the unpaid
principal balance at an annual rate equal to 5.5% for three years
from the date hereof and at an annual rate equal to 7.0% for two
years thereafter, in the manner provided below. Interest shall be
calculated on the basis of a year of 360 days and charged for the
actual number of days elapsed.
This Note has been executed and delivered pursuant to and in
accordance with the terms and conditions of that certain Stock
Purchase Agreement (the "Chem-Con Stock Agreement"), dated as of
the even date herewith, by and among Maker, Payee, Chemical
Conservation Corporation, a Florida corporation, Chemical
Conservation of Georgia, Inc., a Georgia corporation, the Thomas P.
Sullivan Living Trust, dated September 6, 1978 (the "TPS Trust"),
Thomas P. Sullivan, an individual ("TPS"), and Ann L. Sullivan, an
individual ("ALS"), and is subject to the terms and conditions of
the Chem-Con Stock Agreement, which are, by this reference,
incorporated herein and made a part hereof. Capitalized terms used
in this Note without definition shall have the respective meanings
set forth in the Chem-Con Stock Agreement. Along with this Note,
a second note ("Second Chem-Con Note") in the original principal
amount of $1,970,000 is being issued by Maker to Payee and a third
note ("Chem-Met Note") in the original principal amount of
$1,500,000 is being issued to the TPS Trust in connection with a
certain Stock Purchase Agreement (the "Chem-Met Stock Agreement"),
dated as of the even date herewith, by and among Maker, Payee,
Chem-Met Services, Inc. a Michigan corporation ("Chem-Met"), the
TPS Trust, TPS and ALS. Collectively, the Note, Second Chem-Con
Note and Chem-Met Note are referred to as the "Three Notes." The
obligations of Maker underlying the Three Notes are guaranteed by
that certain Non-Recourse Guaranty among Chem-Met, Payee and the
TPS Trust of even date herewith. The Three Notes are secured by
that certain Mortgage of even date herewith which covers certain
Real Estate owned by Chem-Met.
1. PAYMENTS
1.1 PRINCIPAL AND INTEREST
The principal amount of this Note and accrued interest thereon
shall be payable in sixty (60) consecutive monthly installments,
with the first installment commencing on July 1, 1999, and an
installment payable on the 1st day of each month thereafter until
paid in full. The amount of each installment of principal and
<PAGE>
interest paid each month shall be Twenty Three Thousand Six Hundred
Twenty-Five and 67/100 Dollars ($23,625.67).
1.2 MANNER OF PAYMENT
All payments of principal and interest on this Note shall be
delivered to Payee at 1021 Harvard Road, Grosse Pointe Park,
Michigan 48230 or at such other place in the United States of
America as Payee shall designate to Maker in writing. If any
payment of principal or interest on this Note is due on a day which
is not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be taken
into account in calculating the amount of interest payable under
this Note. "Business Day" means any day other than a Saturday,
Sunday or legal holiday in the State of Delaware.
1.3 PREPAYMENT
Maker may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal
balance due under this Note, provided that each such prepayment is
accompanied by accrued interest on the amount of principal prepaid
calculated to the date of such prepayment. Any partial prepayments
shall be applied to installments of principal in inverse order of
their maturity.
2. DEFAULTS
2.1 EVENTS OF DEFAULT
The occurrence of any one or more of the following events with
respect to Maker shall constitute an event of default hereunder
("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for fifteen (15)
days after Payee notifies Maker in writing of such failure to pay;
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a "Bankruptcy Law"), Maker shall
(i) commence a voluntary case or proceeding; (ii) consent to the
entry of an order for relief against it in an involuntary case;
(iii) consent to the appointment of a trustee, receiver, assignee,
liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing its inability to
pay its debts as they become due;
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an
involuntary case, (ii) appoints a trustee, receiver, assignee,
liquidator or similar official or for Maker substantially all of
Maker's properties, or (iii) orders the liquidation of Maker, and
in each case the order or decree is not dismissed within 90 days;
or
2
<PAGE>
(d) If Maker shall undergo a Change of Control. For the purposes
of this Note, a "Change of Control" shall mean the acquisition
after the date of this note of eighty percent (80%) or more of
Maker's then outstanding Common Stock, par value $.001 per share by
a person, corporation or other entity or the acquisition of all or
substantially all of its assets of the Maker by a person,
corporation or other entity, except the acquisition of such stock
or assets by a subsidiary of the Maker.
2.2 REMEDIES
Upon the occurrence of an Event of Default hereunder (unless all
Events of Default have been cured by Maker or waived by Payee),
Payee may, at its option, (i) by written notice to Maker, declare
the entire unpaid principal balance of this Note, together with all
accrued interest thereon, immediately due and payable regardless of
any prior forbearance, and (ii) exercise any and all rights and
remedies available to it under applicable law, including, without
limitation, the right to collect from Maker all sums due under this
Note. Maker shall pay all reasonable costs and expenses incurred by
or on behalf of Payee in connection with Payee's exercise of any or
all of its rights and remedies under this Note, including, without
limitation, reasonable attorneys' fees.
3. MISCELLANEOUS
3.1 WAIVER
The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any right or
remedy under this Note shall be effective unless in a writing
signed by Payee. Neither the failure nor any delay in exercising
any right, power or privilege under this Note will operate as a
waiver of such right, power or privilege and no single or partial
exercise of any such right, power or privilege by Payee will
preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
To the maximum extent permitted by applicable law, (a) no claim or
right of Payee arising out of this Note can be discharged by Payee,
in whole or in part, by a waiver or renunciation of the claim or
right unless in a writing, signed by Payee; (b) no waiver that may
be given by Payee will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on
Maker will be deemed to be a waiver of any obligation of Maker or
of the right of Payee to take further action without notice or
demand as provided in this Note. Maker hereby waives presentment,
demand, protest and notice of dishonor and protest.
3.2 NOTICES
Any notice required or permitted to be given hereunder shall be
given in accordance with Section 12.7 of the Chem-Con Stock
Agreement.
3
<PAGE>
<PAGE>
3.3 SEVERABILITY
If any provision in this Note is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this
Note will remain in full force and effect. Any provision of this
Note held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.
3.4 GOVERNING LAW
This Note will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
3.5 PARTIES IN INTEREST
This Note shall bind Maker and its successors and assigns.
3.6 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Note are provided for convenience
only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding
Section or Sections of this Note unless otherwise specified.
All words used in this Note will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly
provided, the words "hereof" and "hereunder" and similar references
refer to this Note in its entirety and not to any specific section
or subsection hereof.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as
of the date first stated above.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.,
a Delaware corporation
By: /s/ Louis F. Centofanti
_______________________________
Dr. Louis F. Centofanti, President
THIS PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT WITH
CONGRESS FINANCIAL CORPORATION (FLORIDA).
PROMISSORY NOTE
$1,970,000 May 28, 1999
FOR VALUE RECEIVED, the undersigned, PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Maker"), promises to pay
to the order of the ANN L. SULLIVAN LIVING TRUST, dated September
6, 1978 ("Payee"), in lawful money of the United States of America,
the principal sum of One Million Nine Hundred Seventy Thousand and
no/100 Dollars ($1,970,000), together with interest on the unpaid
principal balance at an annual rate equal to 5.5% for three years
from the date hereof and at an annual rate equal to 7.0% for two
years thereafter, in the manner provided below. Interest shall be
calculated on the basis of a year of 360 days and charged for the
actual number of days elapsed.
This Note has been executed and delivered pursuant to and in
accordance with the terms and conditions of that certain Stock
Purchase Agreement (the "Chem-Con Stock Agreement"), dated as of
the even date herewith, by and among Maker, Payee, Chemical
Conservation Corporation, a Florida corporation, Chemical
Conservation of Georgia, Inc., a Georgia corporation, the Thomas P.
Sullivan Living Trust, dated September 6, 1978 (the "TPS Trust"),
Thomas P. Sullivan, an individual ("TPS"), and Ann L. Sullivan, an
individual ("ALS"), and is subject to the terms and conditions of
the Chem-Con Stock Agreement, which are, by this reference,
incorporated herein and made a part hereof. Capitalized terms used
in this Note without definition shall have the respective meanings
set forth in the Chem-Con Stock Agreement. Along with this Note,
a second note ("Second Chem-Con Note") in the original principal
amount of $1,230,000 is being issued by Maker to Payee and a third
note ("Chem-Met Note") in the original principal amount of
$1,500,000 is being issued to the TPS Trust in connection with a
certain Stock Purchase Agreement (the "Chem-Met Stock Agreement"),
dated as of the even date herewith, by and among Maker, Payee,
Chem-Met Services, Inc. a Michigan corporation, the TPS Trust, TPS
and ALS. Collectively, the Note, Second Chem-Con Note and Chem-Met
Note are referred to as the "Three Notes." The obligations of
Maker underlying the Three Notes are guaranteed by that certain
Non-Recourse Guaranty among Chem-Met Services, Inc. ("Chem-Met"),
Payee and the TPS Trust of even date herewith. The Three Notes are
secured by that certain Mortgage of even date herewith which covers
certain Real Estate owned by Chem-Met.
1. PAYMENTS
1.1 PRINCIPAL AND INTEREST
The principal amount of this Note and accrued interest thereon
shall be payable in sixty (60) consecutive monthly installments,
with the first installment commencing on July 1, 1999, and an
installment payable on the 1st of each month thereafter until paid
<PAGE>
in full. The amount of each installment of principal and interest
paid each month shall be Thirty Seven Thousand Eight Hundred
Thirty-Nine and 49/100 Dollars ($37,839.49).
1.2 MANNER OF PAYMENT
All payments of principal and interest on this Note shall be
delivered to Payee at 1021 Harvard Road, Grosse Pointe Park,
Michigan 48230 or at such other place in the United States of
America as Payee shall designate to Maker in writing. If any
payment of principal or interest on this Note is due on a day which
is not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be taken
into account in calculating the amount of interest payable under
this Note. "Business Day" means any day other than a Saturday,
Sunday or legal holiday in the State of Delaware.
1.3 PREPAYMENT
Maker may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal
balance due under this Note, provided that each such prepayment is
accompanied by accrued interest on the amount of principal prepaid
calculated to the date of such prepayment. Any partial prepayments
shall be applied to installments of principal in inverse order of
their maturity.
2. DEFAULTS
2.1 EVENTS OF DEFAULT
The occurrence of any one or more of the following events with
respect to Maker shall constitute an event of default hereunder
("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for fifteen (15)
days after Payee notifies Maker in writing of such failure to pay;
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a "Bankruptcy Law"), Maker shall
(i) commence a voluntary case or proceeding; (ii) consent to the
entry of an order for relief against it in an involuntary case;
(iii) consent to the appointment of a trustee, receiver, assignee,
liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing its inability to
pay its debts as they become due;
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an
involuntary case, (ii) appoints a trustee, receiver, assignee,
liquidator or similar official or for Maker substantially all of
Maker's properties, or (iii) orders the liquidation of Maker, and
in each case the order or decree is not dismissed within 90 days;
or
2
<PAGE>
(d) If Maker shall undergo a Change of Control. For the purposes
of this Note, a "Change of Control" shall mean the acquisition
after the date of this Note of eighty percent (80%) or more of
Maker's then outstanding Common Stock, par value $.001 per share,
by a person, corporation or other entity, or the acquisition of all
or substantially all of its assets of the Maker by a person,
corporation or other entity, except the acquisition of such stock
or assets by a subsidiary of the Maker.
2.2 REMEDIES
Upon the occurrence of an Event of Default hereunder (unless all
Events of Default have been cured by Maker or waived by Payee),
Payee may, at its option, (i) by written notice to Maker, declare
the entire unpaid principal balance of this Note, together with all
accrued interest thereon, immediately due and payable regardless of
any prior forbearance, and (ii) exercise any and all rights and
remedies available to it under applicable law, including, without
limitation, the right to collect from Maker all sums due under this
Note. Maker shall pay all reasonable costs and expenses incurred by
or on behalf of Payee in connection with Payee's exercise of any or
all of its rights and remedies under this Note, including, without
limitation, reasonable attorneys' fees.
3. MISCELLANEOUS
3.1 WAIVER
The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any right or
remedy under this Note shall be effective unless in a writing
signed by Payee. Neither the failure nor any delay in exercising
any right, power or privilege under this Note will operate as a
waiver of such right, power or privilege and no single or partial
exercise of any such right, power or privilege by Payee will
preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
To the maximum extent permitted by applicable law, (a) no claim or
right of Payee arising out of this Note can be discharged by Payee,
in whole or in part, by a waiver or renunciation of the claim or
right unless in a writing, signed by Payee; (b) no waiver that may
be given by Payee will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on
Maker will be deemed to be a waiver of any obligation of Maker or
of the right of Payee to take further action without notice or
demand as provided in this Note. Maker hereby waives presentment,
demand, protest and notice of dishonor and protest.
3.2 NOTICES
Any notice required or permitted to be given hereunder shall be
given in accordance with Section 12.7 of the Chem-Con Stock
Agreement.
3
<PAGE>
3.3 SEVERABILITY
If any provision in this Note is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this
Note will remain in full force and effect. Any provision of this
Note held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.
3.4 GOVERNING LAW
This Note will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
3.5 PARTIES IN INTEREST
This Note shall bind Maker and its successors and assigns.
3.6 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Note are provided for convenience
only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding
Section or Sections of this Note unless otherwise specified.
All words used in this Note will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly
provided, the words "hereof" and "hereunder" and similar references
refer to this Note in its entirety and not to any specific section
or subsection hereof.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as
of the date first stated above.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.,
a Delaware corporation
By: /s/ Louis Centofanti
________________________________
Dr. Louis F. Centofanti, President
4
THIS PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT WITH
CONGRESS FINANCIAL CORPORATION (FLORIDA).
PROMISSORY NOTE
$1,500,000 May 28, 1999
FOR VALUE RECEIVED, the undersigned, PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Maker"), promises to pay
to the order of the THOMAS P. SULLIVAN LIVING TRUST, dated
September 6, 1978 ("Payee"), in lawful money of the United States
of America, the principal sum of One Million Five Hundred Thousand
and no/100 Dollars ($1,500,000), together with interest on the
unpaid principal balance at an annual rate equal to 5.5% for three
years from the date hereof and at an annual rate equal to 7.0% for
two years thereafter, in the manner provided below. Interest shall
be calculated on the basis of a year of 360 days and charged for
the actual number of days elapsed.
This Note has been executed and delivered pursuant to and in
accordance with the terms and conditions of that certain Stock
Purchase Agreement (the "Chem-Met Stock Agreement"), dated as of
the even date herewith, by and among Maker, Payee, Chem-Met
Services, Inc. a Michigan corporation ("Chem-Met"), the Ann L.
Sullivan Living Trust, dated September 6, 1978 ("ALS Trust"),
Thomas P. Sullivan, an individual ("TPS"), and Ann L. Sullivan, an
individual ("ALS"), and is subject to the terms and conditions of
the Chem-Met Stock Agreement, which are, by this reference,
incorporated herein and made a part hereof. Capitalized terms used
in this Note without definition shall have the respective meanings
set forth in the Chem-Met Stock Agreement. Along with this Note,
a note ("First Chem-Con Note") in the original principal amount of
$1,230,000 is being issued by Maker to the ALS Trust and a second
note ("Second Chem-Con Note") in the original principal amount of
$1,970,000 is being issued by Maker to the ALS Trust, both in
connection with a certain Stock Purchase Agreement (the "Chem-Con
Stock Agreement"), dated as of the even date herewith, by and among
Maker, Payee, Chemical Conservation Corporation; a Florida
corporation, Chemical Conservation of Georgia, Inc., a Georgia
corporation, the ALS Trust, TPS and ALS. Collectively, the Note,
First Chem-Con Note and Second Chem-Con Note are referred to as the
"Three Notes." The obligations of Maker underlying the Three Notes
are guaranteed by that certain Non-Recourse Guaranty among Chem-
Met, Payee and the ALS Trust of even date herewith. The Three
Notes are secured by that certain Mortgage of even date herewith
which covers certain Real Estate owned by Chem-Met.
1. PAYMENTS
1.1 PRINCIPAL AND INTEREST
The principal amount of this Note and accrued interest thereon
shall be payable in sixty (60) consecutive monthly installments,
with the first installment commencing on July 1, 1999, and an
installment payable on the 1st day of each month thereafter until
<PAGE>
paid in full. The amount of each installment of principal and
interest paid each month shall be Twenty-Eight Thousand Eight
Hundred Eleven and 80/100 Dollars ($28,811.80).
1.2 MANNER OF PAYMENT
All payments of principal and interest on this Note shall be
delivered to Payee at 1021 Harvard Road, Grosse Pointe Park,
Michigan 48230 or at such other place in the United States of
America as Payee shall designate to Maker in writing. If any
payment of principal or interest on this Note is due on a day which
is not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be taken
into account in calculating the amount of interest payable under
this Note. "Business Day" means any day other than a Saturday,
Sunday or legal holiday in the State of Delaware.
1.3 PREPAYMENT
Maker may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal
balance due under this Note, provided that each such prepayment is
accompanied by accrued interest on the amount of principal prepaid
calculated to the date of such prepayment. Any partial prepayments
shall be applied to installments of principal in inverse order of
their maturity.
2. DEFAULTS
2.1 EVENTS OF DEFAULT
The occurrence of any one or more of the following events with
respect to Maker shall constitute an event of default hereunder
("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for fifteen (15)
days after Payee notifies Maker in writing of such failure to pay;
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a "Bankruptcy Law"), Maker shall
(i) commence a voluntary case or proceeding; (ii) consent to the
entry of an order for relief against it in an involuntary case;
(iii) consent to the appointment of a trustee, receiver, assignee,
liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing its inability to
pay its debts as they become due;
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an
involuntary case, (ii) appoints a trustee, receiver, assignee,
liquidator or similar official or for Maker substantially all of
Maker's properties, or (iii) orders the liquidation of Maker, and
in each case the order or decree is not dismissed within 90 days;
or
2
<PAGE>
(d) If Maker shall undergo a Change of Control. For the purposes
of this Note, a "Change of Control" shall mean the acquisition
after the date of this note of eighty percent (80%) or more of
Maker's then outstanding Common Stock, par value $.001 per share,
by a person, corporation or other entity or the acquisition of all
or substantially all of its assets of the maker by a person,
corporation or other entity, except the acquisition of such stock
or assets by a subsidiary of the Maker.
2.2 REMEDIES
Upon the occurrence of an Event of Default hereunder (unless all
Events of Default have been cured by Maker or waived by Payee),
Payee may, at its option, (i) by written notice to Maker, declare
the entire unpaid principal balance of this Note, together with all
accrued interest thereon, immediately due and payable regardless of
any prior forbearance, and (ii) exercise any and all rights and
remedies available to it under applicable law, including, without
limitation, the right to collect from Maker all sums due under this
Note. Maker shall pay all reasonable costs and expenses incurred by
or on behalf of Payee in connection with Payee's exercise of any or
all of its rights and remedies under this Note, including, without
limitation, reasonable attorneys' fees.
3. MISCELLANEOUS
3.1 WAIVER
The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any right or
remedy under this Note shall be effective unless in a writing
signed by Payee. Neither the failure nor any delay in exercising
any right, power or privilege under this Note will operate as a
waiver of such right, power or privilege and no single or partial
exercise of any such right, power or privilege by Payee will
preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
To the maximum extent permitted by applicable law, (a) no claim or
right of Payee arising out of this Note can be discharged by Payee,
in whole or in part, by a waiver or renunciation of the claim or
right unless in a writing, signed by Payee; (b) no waiver that may
be given by Payee will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on
Maker will be deemed to be a waiver of any obligation of Maker or
of the right of Payee to take further action without notice or
demand as provided in this Note. Maker hereby waives presentment,
demand, protest and notice of dishonor and protest.
3.2 NOTICES
Any notice required or permitted to be given hereunder shall be
given in accordance with Section 12.7 of the Chem-Met Stock
Agreement.
3
<PAGE>
3.3 SEVERABILITY
If any provision in this Note is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this
Note will remain in full force and effect. Any provision of this
Note held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.
3.4 GOVERNING LAW
This Note will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
3.5 PARTIES IN INTEREST
This Note shall bind Maker and its successors and assigns.
3.6 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Note are provided for convenience
only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding
Section or Sections of this Note unless otherwise specified.
All words used in this Note will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly
provided, the words "hereof" and "hereunder" and similar references
refer to this Note in its entirety and not to any specific section
or subsection hereof.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as
of the date first stated above.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.,
a Delaware corporation
By: /s/ Louis Centofanti
__________________________________
Dr. Louis F. Centofanti, President
4
NON-RECOURSE GUARANTY
_____________________
THIS NON-RECOURSE GUARANTY is dated and is effective
this 28th day of May, 1999, by and between Chem-Met Services, Inc.
(the "Guarantor") and the Thomas P. Sullivan Living Trust dated
September 6, 1978 (the "TPS Trust") and the Ann L. Sullivan Living
Trust dated September 6, 1978 (the "ALS Trust"). The TPS Trust and
the ALS Trust are collectively referred to hereinafter as the
"Payee."
W I T N E S S E T H:
WHEREAS, the Payee and Perma-Fix Environmental
Services, Inc. (the "Payor"), a Delaware corporation, have entered
into (i) a Stock Purchase Agreement ("Chem-Con Stock Purchase
Agreement"), dated as of May 27, 1999, among the Payor, Chemical
Conservation Corporation ("Chemical Florida"), Chemical
Conservation of Georgia, Inc. ("Chemical Georgia"), Payee, Thomas
P. Sullivan ("TPS"), and Ann L. Sullivan ("ALS") and (ii) a Stock
Purchase Agreement ("Chem-Met Stock Purchase Agreement") dated as
of May 27, 1999, among the Payor, Chem-Met Services, Inc., Payee,
TPS, and ALS, pursuant to which the Payor shall purchase the outstanding
capital stock of Chem-Con from the ALS Trust and the Payor shall purchase the
outstanding capital stock of Chem-Met from the TPS Trust. In connection
therewith, the Payor (x) has issued a Promissory Note dated as of May 28,
1999, in the original principal amount of $1,230,000 in favor of the ALS
Trust ("First Promissory Note"), with such First Promissory Note bearing an
annual rate of interest of 5.5% for the first three years and 7% for the
remaining two years, payable in equal monthly installments of
principal and interest of $23,625, (y) has issued a Promissory
Note, dated as of May 28, 1999, in the original principal amount of
$1,970,000 in favor of the ALS Trust ("Second Promissory Note"),
with such Second Promissory Note bearing an annual rate of interest
of 5.5% for the first three years and 7% for the remaining two
years, payable in equal monthly installments of principal and
interest of $37,839.49 and (z) has issued a Third Promissory Note,
dated as of May 28, 1999, in the original principal amount of
$1,500,000 in favor of the TPS Trust ("Third Promissory Note"),
with such Promissory Note bearing an annual rate of interest of
5.5% for the first three years and 7% for the remaining two years,
payable in equal monthly installments of principal and interest of
$28,811.80. The First Promissory Note, Second Promissory Note and
Third Promissory Note are collectively referred to as the
"Promissory Notes."
WHEREAS, in order to induce the Payee to enter into the
Stock Purchase Agreement with Payor, the Guarantor has agreed to
guarantee, on a non-recourse basis and without personal liability
and pursuant to the terms hereof, the obligations of the Payor to
the Payee under the Promissory Notes (as defined below) and to
execute and be bound by this Non-Recourse Guaranty and the Mortgage
(as defined below) to secure this Non-Recourse Guaranty; and,
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and
other valuable consideration, the receipt of which is hereby
acknowledged by the Guarantor, and the mutual promises and
covenants contained herein, the Guarantor hereby agrees as follows:
1. The Guarantor does hereby, guarantee and become surety,
without personal liability, to the Payee for the prompt
satisfaction when due, whether by acceleration or otherwise, of the
Payor's obligations under the Promissory Notes subject to and in
accordance with the terms of this Non-Recourse Guaranty.
2. To secure this Non-Recourse Guaranty to the Payee, the
Guarantor, which follows the Closing (as defined in the Stock
Purchase Agreements) shall be a wholly-owned subsidiary of the
Payor, has executed as security for the Guarantor's obligations
under this Non-Recourse Guaranty a certain Mortgage of even date
herewith, pledging to Payee a security interest in certain real
estate owned by the Guarantor as more specifically defined in
Exhibit "A" attached heretofore ("Real Estate").
3. The Guarantor agrees that if the Payor's obligations under the
Promissory Notes are not satisfied when due, and after any and all
grace periods contained in the Promissory Notes, either at maturity
or by acceleration, the Guarantor shall upon demand by the Payee
forthwith satisfy such indebtedness of the Payor to the extent and
only to the extent that the Real Estate pledged under the Mortgage
shall satisfy such indebtedness, and provided that this Guaranty is
non-recourse to the Guarantor hereunder and is limited to proceeds
derived from the sale of the Real Estate pledged by the Guarantor
pursuant to the Mortgage. The Guarantor shall not be liable for
any deficiency which may remain under the Promissory Notes or
otherwise upon sale of the Real Estate.
4. The Guarantor hereby:
4.1 Assents to all terms and agreements heretofore or
hereafter made by the Payor with the Payee in
connection with the Promissory Notes;
4.2 Consent that the Payee may:
4.2.1 Exchange, release or surrender to the Payor or
to any guarantor, pledgor, or grantor any
collateral, or waive, release or subordinate
any security interest, in whole or in part,
now or hereafter held as security for the
Promissory Notes.
4.2.2 Waive or delay the exercise of any of its
rights or remedies against the Payor or any
other person or entity;
4.2.3 Release the Payor or any other person or
entity;
- 2 -
<PAGE>
4.2.4 Renew, extend, or modify the terms of the
Promissory Notes, or any of the obligations or
any instrument or agreement evidencing the
same; and,
4.2.5 Apply payments, if any, by the Payor, or any
other person or entity, to any of the Payor's
obligations under the Promissory Notes.
4.3 Waive all notices whatsoever with respect to this
Agreement or with respect to the Promissory Notes,
including, but without limitation, notice of:
4.3.1 The Payee's acceptance hereof or its intention
to act, or its action, in reliance hereon;
4.3.2 The present existence or future incurring of
any obligations under the Promissory Notes or
any terms or amounts thereof or any change
therein;
4.3.3 Any default by the Payor or any surety,
pledgor, grantor of security, or guarantor;
and,
4.3.4 The obtaining or releasing of any guaranty or
surety agreement (in addition to this Non-
Recourse Guaranty), pledge, assignment, or
other security for any of the obligations of
Payor under the Promissory Notes.
The Guarantor waives notice of presentment, demand, protest
and notice of nonpayment, protest in relation to any instrument
evidencing any of the obligations of Payor to Payee under the
Promissory Notes, and any other demands and notices required by
law, except as such waiver may be expressly prohibited by law.
5. The liability of the Guarantor under this Non-Recourse
Guaranty is absolute but is limited to its non-recourse nature as
provided in Section 3 hereof, without regard to the liability of
any other person, and shall not in any manner be affected by reason
of any action taken by the Payee, which action or inaction is
herein consented and agreed to, nor by the partial or complete
unenforceability or invalidity of any other guaranty or surety
agreement, pledge, assignment or other security of any of the
obligations of Payor to Payee under the Promissory Notes. No delay
in making demand on the Guarantor for satisfaction of its liability
hereunder shall prejudice the Payee's right to enforce such
satisfaction. All of the Payee's rights and remedies hereunder
shall be cumulative and any failure of the Payee to exercise any
right hereunder shall not be construed as a waiver of the right to
exercise the same or any other right at any time, and from time to
time, thereafter.
- 3 -
<PAGE>
<PAGE>
6. This Non-Recourse Guaranty shall be a continuing guaranty and
shall be binding upon the Guarantor regardless of how long before
or after the date hereof any of the obligations of Payor to Payee
under the Promissory Notes were or are incurred.
7. The Guarantor agrees that this Non-Recourse Guaranty shall be
governed by the substantive law of the State of Michigan, without
regard to principles of conflicts of laws.
8. Any notice or consent required or permitted by this Non-
Recourse Guaranty shall be in writing and shall be deemed delivered
if delivered in person or if sent by registered mail, postage pre-
paid, return receipt requested, as follows, unless such address is
changed by written notice hereunder:
8.1 If to the Payee:
Ann L. Sullivan Trust
1021 Harvard Road
Grosse Pointe Park, Michigan 48230
and Thomas P. Sullivan Trust
1021 Harvard Road
Grosse Pointe Park, Michigan 48230
with a copy to:
Peter E. O'Rourke, Esq.
O'Rourke & Myers
241 Lewiston
Grosse Pointe Farms, Michigan 48236
8.2 If to the Guarantor:
Chem-Met Services, Inc.
1940 Northwest 67th Place
Gainesville, Florida 32606-1649
with a copy to:
Irwin H. Steinhorn, Esq.
Conner & Winters, P.C.
One Leadership Square
211 North Robinson, Suite 1700
Oklahoma City, Oklahoma 73102
- 4 -
<PAGE>
<PAGE>
9. This Non-Recourse Guaranty shall inure to the benefit of the
Payee, its successors and assigns, and to any person to whom the
Payee may grant an interest in any of the obligations, and shall be
binding upon the Guarantor and its respective successors and
assigns.
10. This Non-Recourse Guaranty is intended to take effect as a
document under seal.
NEXT PAGE IS THE SIGNATURE PAGE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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<PAGE>
IN WITNESS WHEREOF, the Guarantor, intending to be
legally bound hereby, have duly executed this Non-Recourse Guaranty
as of the date and year first above written.
"Guarantor"
CHEM-MET SERVICES, INC.
By: /s/ Louis Centofanti
___________________________________
Louis F. Centofanti
President
H:\N-P\PESI\8k\699\guaranty-003.NR.wpd
MORTGAGE
________
THIS MORTGAGE, made this 28th day of May, 1999, by Chem-Met
Services, Inc., a Michigan corporation ("Mortgagor"), whose address
is 18550 Allen Road, Brownstown, Michigan 48192, to the Thomas P.
Sullivan Living Trust dated September 6, 1978 (the "TPS Trust") and
the Ann L. Sullivan Living Trust dated September 6, 1978 (the "ALS
Trust")( the TPS Trust and the ALS Trust are collectively referred
to hereinafter as the "Mortgagee"), whose address is 1021 Harvard
1021 Harvard Road, Grosse Pointe Park, Michigan 48230.
WITNESSETH:
__________
To secure the payment of all obligations owing pursuant to a
Non-Recourse Guaranty dated as of May 27, 1999 executed by the
Mortgagor in favor of the Mortgagee (the "Guaranty"), the Mortgagor
does MORTGAGE and WARRANT to Mortgagee, its successors and assigns,
the land situated in the Township of Brownstown, County of Wayne
and State of Michigan, described on Exhibit A attached hereto and
incorporated herein by reference, together with all buildings and
improvements now or hereafter upon said land or any part thereof,
and all heretofore or hereafter vacated alleys and streets abutting
said land; and together with all licenses and permits to operate
the building thereon, all fixtures now or hereafter installed for
use in the operation of the building or buildings now or hereafter
on said land, including, but not limited to, all lighting, heating,
cooling, ventilating, air conditioning, plumbing, sprinkling,
electrical systems, and the fixtures pertaining thereto owned by
Mortgagor, all of which fixtures shall be deemed to be part of the
land (except for all tangible and intangible assets used in
connection with the business of the Mortgagor and its affiliates,
or any of them, including, without limitation, all permits and
licenses to operate such business, and all trade fixtures of
Mortgagor or its affiliates); and together with all the rents and
leases from third party tenants, if any, thereof (but not the
accounts, chattel paper or other intangibles in which a security
interest may be perfected under the Uniform Commercial Code in
effect in the State of Michigan from time to time) and the
tenements, hereditaments, easements, and appurtenances (herein
called the "Mortgaged Premises"). The Mortgagee hereby disclaims
any interest in any other collateral or property of Mortgagor or
any of its affiliates.
Mortgagor does hereby covenant and warrant as follows:
FIRST: Mortgagor shall pay all amounts due and owing
under the Guaranty and shall pay all other amounts provided herein
according to the terms of the Guaranty and this Mortgage.
<PAGE>
SECOND: At the time of the execution and delivery of this
Mortgage, Mortgagor is well and truly seized of the Mortgaged
Premises in fee simple, free of all liens and encumbrances
whatsoever except for (i) real estate taxes and assessments not yet
due and payable, (ii) covenants, restrictions, easements,
reservations and agreements of record, (iii) rights of the public
to streets, roads and alleys lying within the boundaries of the
Mortgaged Premises, (iv) the state of facts an accurate survey may
disclose, and (v) such minor encroachments or encumbrances as do
not materially interfere with the development of the Mortgaged
Premises for its contemplated uses, and Mortgagor will forever
warrant and defend the same against any and all claims whatever,
and the lien created hereby is and will be kept a first lien upon
the Mortgaged Premises and every part thereof.
THIRD: Mortgagor shall pay before the same becomes
delinquent all taxes, assessments and other charges which might
become a lien upon the Mortgaged Premises prior to this Mortgage.
<PAGE>
Should default be made in the payment of any such taxes,
assessments or other charges, Mortgagee may, at its option, but
without any obligation on its part to do so, obtain pay such taxes,
assessments or other charges, and all amounts so expended by
Mortgagee shall be secured hereby and shall bear interest from the
date of expenditure at the rate of five percent (5%) per annum
until repaid by Mortgagor.
FOURTH: The occurrence of any of the following events shall
be deemed an "Event of Default" hereunder: (i) default in making
payment when due of any amount owing under the Guaranty, or (ii)
default in making payment when due of any other sums provided
herein, or (iii) default in the performance of any covenant or
condition provided herein and the continuance thereof for 30 days
after notice of such default has been given by Mortgagee. Upon the
occurrence of an Event of Default, Mortgagee may at any time
thereafter, declare the principal balance of the indebtedness
secured hereby, together with interest thereon, to be due and
payable immediately.
FIFTH: Upon any foreclosure sale of the Mortgaged
Premises, the same may be sold either as a whole or in parcels, as
Mortgagee may elect, and if in parcels, the same may be divided as
Mortgagee may elect and, at the election of Mortgagee may be
offered first in parcels and then as a whole, that offer producing
the highest price for the entire property to prevail, any law,
statutory or otherwise, to the contrary notwithstanding, and
Mortgagor hereby waives the right to require any such sale to be
made in parcels or the right to select such parcels.
SIXTH: Each and every of the rights, remedies and benefits
provided to Mortgagee herein shall be cumulative and shall not be
exclusive of any other of said rights, remedies or benefits, or of
any other rights, remedies or benefits allowed by law. Any waiver
by Mortgagee of any default shall not constitute a waiver of any
similar or other default.
<PAGE>
SEVENTH: All of the covenants and conditions hereof shall run
with the land and shall be binding upon the successors and assigns
of Mortgagor, and shall inure to the benefit of the successors and
assigns of Mortgagee. Any reference herein to "Mortgagee" shall
include the successors and assigns of Mortgagee.
EIGHTH: All notices given hereunder shall be in writing,
shall be effective when received and shall be sent to Mortgagor or
Mortgagee at their respective addresses first above written unless
another address is designated by notice to the other party in
writing.
NINTH: The rights and remedies under this Mortgage are
subject to a Subordination Agreement, dated May 27, 1999, among
Perma-Fix Environmental Services, Inc., the Ann L. Sullivan Living
Trust, dated September 6, 1978, Ann L. Sullivan, Thomas P.
Sullivan, the Thomas P. Sullivan Living Trust, dated September 6,
1978.
2
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of
the day and year first above written.
Signed in the presence of: CHEM-MET SERVICES, INC.
/s/ Irwin H. Steinhorn By: /s/ Louis Centofanti
______________________________ _______________________________
Print Name: Irwin H. Steinhorn Print Name: Louis F. Centofanti
___________________ _____________________
Its: President
____________________________
/s/ Laura McCasland
______________________________
Print Name: Laura McCasland
___________________
STATE OF OKLAHOMA )
) SS.
COUNTY OF OKLAHOMA )
The foregoing instrument was acknowledged before me this 27th
day of May, 1999, by Louis F. Centofanti, the President of Chem-Met
Services, Inc., a Michigan corporation on behalf of said corporation.
/s/ Peggy Lee Hull
_______________________________________
Notary Public, Oklahoma County,
State of Oklahoma
My Commission Expires: January 29, 2002
__________________
This instrument drafted by
and when recorded return to:
Colleen M. Shevnock, Esq.
Dickinson Wright PLLC
500 Woodward Avenue, Suite 4000
Detroit, MI 48226
(313) 223-3500
H:\N-P\PESI\8k\699\mortgage3.wpd
SUBORDINATION AGREEMENT
In consideration of the financial accommodations given, to be
given, or continued by CONGRESS FINANCIAL CORPORATION (FLORIDA), a
Florida corporation (hereinafter the "Lender"), to PERMA-FIX
ENVIRONMENTAL SERVICES, INC., a Delaware corporation. (hereinafter
the "Borrower"), and other affiliates of the Borrower, the
undersigned hereby agree, jointly and severally, as follows:
1. Each of the undersigned hereby postpones and subordinates
all of the respective indebtedness and other obligations of the
Borrower to the undersigned or any one of them of any nature
whatsoever, whensoever and however arising under either of those
certain Stock Purchase Agreements (as defined below) and/or under
each of the Promissory Notes (each such Promissory Note, a "Note")
of the Borrower in favor of the undersigned true and correct copies
of which are annexed hereto as Exhibits "A", "B", and "C" (the
aforesaid obligations and liabilities, including principal and
interest of the respective Notes are collectively referred to as
the "Subordinated Debt") to any and all obligations, liabilities
and indebtedness of every kind, nature and description owing by
Borrower (and severally as in connection with any affiliate of
Borrower) to Lender and/or its affiliates, including principal,
interest, charges, fees, costs and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise,
whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by Lender,
including, without limitation, the obligations of the Borrower in
favor of the Lender under that certain Loan and Security Agreement
dated of even date herewith, by and between the Borrower and the
Lender (the "Loan Agreement"; all capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Loan
Agreement) and/or the "Term Promissory Note" executed in connection
therewith (all of the foregoing being referred to collectively, as
the "Obligations"), and agrees that no payment of (except as
provided in paragraph 3 below) or on account of the Subordinated
Debt shall be made, or any security therefor given, except for the
Michigan Real Estate (as defined below), unless and until all of
the Obligations have been paid in full and all Financing Agreements
have been terminated, and further agrees not to demand, receive or
accept any such payment or security, except for the Michigan Real
Estate. Further, as long as the Loan Agreement or any other
Financing Agreement remains in force and effect, or any of the
Obligations remains outstanding, none of the undersigned has, nor
shall either of them hereafter have, any interest in and to or lien
upon the Collateral (as defined in the Loan Agreement), or any
other property or interest of the Borrower (or any affiliate
thereof), except for the Michigan Real Estate. As used in this
Agreement, the Michigan Real Estate shall mean that certain real
property described on Schedule 1 hereto (the "Real Property"), and
the building and improvements, and real estate fixtures, permits
and licenses to operate the building thereon (except for all
tangible and intangible assets used in connection with the business
of the Borrower and its affiliates, or any of them, including,
without limitation, all permits and licenses to operate the
business, and all trade fixtures of Borrower or its affiliates),
and all vacated alleys and streets abutting said land, together
with all rents and leases from third party tenants, if any, thereof
(but not the accounts, chattel paper or other intangible property
in which a security interest may be perfected under the Uniform
Commercial Code in effect in the State of Michigan from time to
time), and tenements, hereditaments, easements and appurtenances
<PAGE>
<PAGE>
therein or thereto. Each of the undersigned hereby disclaims any
interest in any other Collateral or property of Borrower or any
affiliate.
2. Each of the undersigned represents and warrants that the
amount of the Notes outstanding on the date hereof is as follows:
(i) $1,230,000 Note payable to Ann L. Sullivan
Living Trust (Exhibit A);
(ii) $1,970,000 Note payable to Ann L. Sullivan
Living Trust (Exhibit B); and
(iii) $1,500,000 Note payable to Thomas P.
Sullivan Living Trust (Exhibit C);
and that none of the undersigned shall, directly or indirectly, (A)
increase the amount thereof or of any other Subordinated Debt or
create additional indebtedness or obligations of Borrower to the
undersigned at any time hereafter, (B) amend, modify, alter or
change any terms of the Subordinated Debt, or the Notes or any
other agreement, document or instrument related thereto at anytime,
(C) accept any prepayment or other nonmandatory payments on account
of the Notes, or any amounts arising under the Stock Purchase
Agreements, including, without limitation, any payment in cash or
consideration other than stock of Perma-Fix on account of the
guarantee described in Section 3.2 of the Stock Purchase Agreement
in respect of Chemical Conservation of Georgia, Inc. and Chemical
Conservation Corporation, without the prior consent of Lender in
its discretion.
3. So long as no Event of Default or event which with the
passage of time, giving of notice, or both, would constitute an
Event of Default, shall have occurred and be continuing under the
Loan Agreement, or in Lender's sole determination, if the payment
to the undersigned of amounts permitted below would result in an
Event of Default (notice of any of the foregoing is referred to as
a Default Notice), Borrower may pay and, until Lender gives the
undersigned written notice of the occurrence of an Event of
Default, the undersigned may accept from the Borrower, the
regularly scheduled payments of principal, together with accrued
interest thereon, on the Notes when, and in the amounts, set forth
in each respective Note. Such payments shall exclude, without
limitation, (a) prepayments (unless Lender has given its prior
written consent in its sole discretion), (b) non-mandatory
payments, (c) any payments pursuant to acceleration or pursuant to
claims of breach or pursuant to claims to acquire any of the Notes
or otherwise, or (d) any payments by virtue of setoff against any
obligation of the undersigned, any of them, or their affiliates to
indemnify or make payments to the Borrower or its affiliates,
including, without limitation, obligations due the Borrower under
those certain Stock Purchase Agreements among the undersigned, the
Borrower, and Chem-Met Services, Inc., and Chemical Conservation of
Georgia, Inc., and Chemical Conservation Corporation, respectively
(the "Stock Purchase Agreements"). From and after the giving of
Default Notice to an undersigned, unless and until the Event of
Default or other event giving rise to a Default Notice in question
is cured or waived by Lender (without implying any obligation on
the part of Lender to permit a cure of or to waive any such Event
of Default or other event), no further payments of principal or
interest shall be made to any of the undersigned unless and until
all Obligations have been paid in full and all Financing Agreements
have been terminated, and unless Lender, in its sole discretion,
gives its prior written consent, payments on the Subordinated Debt
which accrued but were unpaid during any period commencing upon the
giving of a Default Notice will not be permitted to be paid
notwithstanding that a cure or waiver occurs (subject as
aforesaid). Notwithstanding any rights or remedies available to
any of the undersigned under any of the respective Notes, the Stock
Purchase Agreements, applicable law or otherwise, unless and until
the indefeasible satisfaction in full of all the Obligations, none
of the undersigned shall, directly or indirectly, seek to collect
<PAGE>
<PAGE>
from Borrower, or exercise rights or remedies upon an event of
default under the Notes, or any other payment in respect of
Subordinated Debt, including, without limitation, filing an action
to foreclose upon the Michigan Real Estate, filing a lis pendens
against the Real Property, or any other judicial or non-judicial
remedy, except that: (a) upon an event of default under the Notes,
or any of them, or any other document evidencing the Subordinated
Debt, the undersigned, as applicable, may declare Borrower to be in
default under the respective Note(s) and accelerate the respective
portion thereof, (b) any of the undersigned may defend the validity
of its claims against the Borrower, and (c) any of the undersigned
may file a proof of claim with respect to its claims against the
Borrower, in a manner consistent with the terms of this Agreement.
4. Should any payment, distribution or security or proceeds
thereof be received by any of the undersigned upon or with respect
to the Subordinated Debt prior to the satisfaction of the
Obligations, the applicable person or entity shall, except as
provided in paragraph 3, forthwith deliver the same to the Lender
in the form received (except for indorsement or assignment by the
undersigned where required by the Lender), for application in
accordance with the Loan Agreement, and, until so delivered, the
same shall be held in trust by the undersigned as the property of
the Lender.
5. In the event of any receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, readjustment of
indebtedness, composition, reorganization, whether or not pursuant
to bankruptcy laws, sale of all or substantially all of the assets,
dissolution, winding up, liquidation, or any other marshalling of
the assets and liabilities of the Borrower, regardless of whether
Lender has given any of the undersigned a Default Notice, any
payment or distribution of assets of the Borrower of any kind of
character, whether in cash, securities or other property, which
would otherwise be payable to or deliverable upon or with respect
to the Subordinated Debt shall be paid or delivered directly to the
Lender for application in accordance with the Loan Agreement until
all Obligations shall have been fully paid and satisfied. The
Lender shall have the right to enforce, collect and receive every
such payment or distribution and give acquittance therefor, and the
Lender is hereby authorized, as attorney in fact for the
undersigned, to vote and prove the respective indebtedness of the
Borrower to the undersigned in any of the above described
proceedings or in any meeting of creditors of the Borrower.
6. None of the undersigned shall assign, transfer,
hypothecate or dispose of the Subordinated Debt or any claim it has
or may have against the Borrower, while any of the Obligations
remains unpaid, without the prior consent of the Lender. The
Notes, and any other instrument at any time evidencing the
Subordinated Debt, or any portion thereof, shall be permanently
marked on its face with a legend conspicuously indicating that
payment thereof is subordinate in right of payment to the
Obligations to the extent provided for herein and subject to the
terms and conditions of this Agreement, and after being so marked
certified copies thereof shall be delivered to Lender. In the
event any legend or endorsement is omitted, Lender or any of its
officers or employees, are hereby irrevocably authorized on behalf
of the undersigned to make the same. No specific legend, further
assignment or endorsement or delivery of notes, guarantees or
instruments shall be necessary to subject any Subordinated Debt to
the subordination thereof contained in this Agreement.
7. THIS AGREEMENT SHALL BE CONTINUING AND IRREVOCABLE SO LONG
AS THE OBLIGATIONS HAVE NOT BEEN PAID IN FULL. LENDER, AT ANY TIME
AND FROM TIME TO TIME, MAY AMEND, MODIFY OR SUPPLEMENT THE FINANCING
AGREEMENTS, INCREASE, RENEW OR EXTEND THE OBLIGATIONS, OR ANY OF
THEM, OR OTHERWISE ENTER INTO SUCH AGREEMENTS WITH THE BORROWER AS
<PAGE>
<PAGE>
LENDER MAY DEEM PROPER EXTENDING THE TIME OF PAYMENT OR RENEWING OR
OTHERWISE ALTERING THE TERMS OF THE OBLIGATIONS, OR ANY OF THEM, OR
AFFECTING THE COLLATERAL OR ANY OTHER SECURITY UNDERLYING ANY OF THE
OBLIGATIONS, OR ANY OF THEM, OR MAY EXCHANGE, SELL OR SURRENDER OR
OTHERWISE DEAL WITH ANY SECURITY, OR MAY RELEASE ANY BALANCE OF FUNDS
OF THE BORROWER, WITH LENDER, WITHOUT NOTICE TO THE UNDERSIGNED AND
WITHOUT IN ANY WAY IMPAIRING OR AFFECTING THIS AGREEMENT.
8. The Lender's delay in or failure to exercise any right or
remedy shall not be deemed a waiver of any obligation of any of the
undersigned or right of the Lender. This Agreement may be
modified, and any of the Lender's rights hereunder waived, only by
agreement in writing signed by the Lender.
9. This Agreement shall inure to the benefit of the Lender,
its successors and assigns and bind the respective heirs, legatees,
personal representatives, successors and assigns of the
undersigned.
10. Notice of acceptance by the Lender of this Agreement is
hereby waived by each of the undersigned, and this Agreement and
all of the terms and provisions hereof shall immediately be binding
upon the undersigned and the undersigned shall deliver such
additional documents and take such action as shall be reasonably
necessary to effectuate the purposes of this Agreement.
11. This Agreement sets forth the entire understanding and
agreement of the parties with respect to the subject matter hereof.
Neither this Agreement nor any term hereof may be modified,
altered, waived, discharged or terminated orally, but only by an
instrument in writing executed by the party to be charged.
12. Any notice or other communication in connection with this
Agreement shall be in writing (or in the form of a facsimile or
telecopy) and shall be deemed to have been duly given when
addressed as provided below and if either (a) personally delivered,
or (b) mailed by registered or certified mail, return receipt
requested, postage prepaid, or (c) sent by reputable overnight
courier service with receipt confirmed; or (d) sent by facsimile
transmission with confirmed receipt:
If to the Borrower:
Perma-Fix Environmental Services, Inc.
1940 N.W. 67th Place, Suite A
Gainesville, Florida 32653
Attention: Richard T. Kelecy, Chief Financial Officer
Facsimile No.: (352) 373-0040
If to the undersigned:
Ann L. Sullivan Living Trust
1021 Harvard Road
Grosse Pointe Park, Michigan 48230
Attention: Mr. Thomas P. Sullivan
Thomas P. Sullivan Living Trust
1021 Harvard Road
Grosse Pointe Park, Michigan 48230
Attention: Mr. Thomas P. Sullivan
<PAGE>
with a copy to:
O'Rourke & Myers
241 Lewiston
Grosse Pointe Farms, Michigan 48236
Attention: Peter E. O'Rourke, Esq.
Facsimile No.: (313) 885-1921
<PAGE>
<PAGE>
If to Lender:
Congress Financial Corporation (Florida)
777 Brickell Avenue - Suite 808
Miami, Florida 33131
Attention: Gary Dixon, Vice President
Facsimile No. (305) 371-9456
with a copy to:
Stroock & Stroock & Lavan LLP
200 South Biscayne Boulevard, 33rd Floor
Miami, Florida 33131
Attention: Robert M. Siegel, Esq.
Facsimile No. (305) 789-9302
and in any case at such other address as the addressee shall have
specified by written notice as aforesaid.
13. EACH OF THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT HE OR SHE MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENTS AT ANY TIME MADE IN
CONNECTION HEREWITH, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR
THEREIN. FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF LENDER NOR LENDER'S COUNSEL HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE
EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION. FINALLY, THE UNDERSIGNED ACKNOWLEDGE THAT
THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER
ALIA, THE PROVISIONS OF THIS PARAGRAPH.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without giving
effect to principles of conflict of laws. The parties hereto
expressly consent to the jurisdiction of the state and federal
courts located in the State of Florida and agree that any
litigation arising out of or in connection with this Agreement
shall be brought in the Circuit Court of Miami-Dade County, Florida
or Federal District Court of the Southern District of Florida,
including in respect of the validity, enforceability or
interpretation hereof.
15. This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which, when taken
together, shall constitute but one agreement.
16. Neither Borrower nor any third party shall have any
rights or be entitled to any benefits under this Agreement.
17. All references to the undersigned in this Agreement (and
the obligations of the undersigned in favor of the Lender) are
deemed to be joint and several.
IN WITNESS WHEREOF, the undersigned has executed this
Agreement as of this 26th day of May, 1999.
ANN L. SULLIVAN LIVING TRUST
By: /s/ Ann L. Sullivan
____________________________
Name: Ann L. Sullivan
________________________
Title: Trustee
_______________________
<PAGE>
THOMAS P. SULLIVAN LIVING TRUST
By: /s/ Thomas P. Sullivan
___________________________
Name: Thomas P. Sullivan
______________________
Title: Trustee
_____________________
/s/ Thomas P. Sullivan
_____________________________
s/
Thomas P. Sullivan
/s/ Ann L. Sullivan
______________________________
s/
Ann L. Sullivan
The undersigned Borrower hereby consents to the foregoing
agreement and agrees to be bound by the terms and conditions
thereof.
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.
By: /s/ Richard T. Kelecy
_______________________________
Name: Richard T. Kelecy
__________________________
Title: Vice President
__________________________
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Ann L. Sullivan, as Trustee of the Ann L.
Sullivan Living Trust. She is personally known to me or has
produced a ________________________ as identification.
/s/ Peggy Lee Hull
______________________________
Print Name: Peggy Lee Hull
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
<PAGE>
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Thomas P. Sullivan, as Trustee of the Thomas P.
Sullivan Living Trust. He is personally known to me or has
produced a ________________________ as identification.
/s/ Peggy Lee Hull
______________________________
Print Name: Peggy Lee Hull
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
<PAGE>
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Thomas P. Sullivan, individually. He is
personally known to me or has produced a ________________________
as identification.
/s/ Peggy Lee Hull
______________________________
Print Name: Peggy Lee Hull
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Ann L. Sullivan, individually. She is
personally known to me or has produced a ________________________
as identification.
/s/ Peggy Lee Hull
______________________________
Print Name: Peggy Lee Hull
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
30061531v4
=============================
PERMA-FIX
____________________________
ENVIRONMENTAL SERVICES, INC.
____________________________
FOR IMMEDIATE RELEASE
Contact:
Dr. Louis F. Centofanti Stan Altschuler Karl Ehlert,
Perma-Fix Environmental Strategic Growth Conseiller
Services, Inc.
(404) 847-9990 (516) 829-7111 (011) 34 971 825 719
PERMA-FIX ENVIRONMENTAL COMPLETES ACQUISITION OF
INDUSTRIAL WASTE TREATMENT COMPANIES WITH COMBINED
REVENUES OF MORE THAN $22 MILLION
* Acquisition Is Accretive To Earnings
* Pro-forma Annualized Revenues To Exceed $55 Million
Atlanta, GA June 3, 1999 Perma-Fix Environmental Services, Inc.
(NASDAQ: PESI) (GERMANY: PES.BE) and its CEO, Dr. Louis F. Centofanti
announced today that it has completed the previously announced
acquisition of Chemical Conservation Corporation, Chemical Conservation
of Georgia, Inc. and Chem-Met Services, Inc. collectively referred to as
"Chem-Con." The combined purchase price of this acquisition totaled $8.7
million, with the consideration paid in the form of cash, notes and
common stock.
Chem-Con has more than 30 years of experience and proven expertise
in the waste industry and operates waste treatment facilities in Orlando,
Florida; Valdosta, Georgia; and Detroit, Michigan. For the year ended
September 30, 1998, Chem-Con had combined revenues of approximately $22
million and net income of $480,000. The acquisition of Chem-Con is of
strategic importance to the continued growth of Perma-Fix and, including
Chem-Con revenues for a full twelve months, will result in revenue growth
to an annualized run-rate of more than approximately $55 million. In
addition, the acquisition significantly expands the Company's presence
into several new major markets and geographic locations. Perma-Fix
currently operates waste treatment facilities in Gainesville, Florida;
Ft. Lauderdale, Florida; Dayton, Ohio; and Tulsa, Oklahoma.
Chem-Con's revenues are principally generated from the collection,
treatment, and recycling of industrial and hazardous waste, including
waste oils, water and miscellaneous solid waste. Chemical Conservation
Corporation operates a permitted treatment and storage facility and
transfer station that also serves as the base for a private trucking
fleet; Chemical Conservation of Georgia, Inc. treats hazardous waste
and recycles solvents; and Chem-Met Services, Inc. treats and stabilizes
inorganic wastes and maintains a government services division that is
focused principally on the Defense Revitalization and Marketing Services
(DRMS) market. Perma-Fix will utilize this established government
services division as a platform to further enhance its current and future
governmental initiatives. Perma-Fix will immediately capitalize on new
growth opportunities by incorporating the use of its proprietary Perma-
Fix I and patent-pending Perma-Fix II processes at these facilities.
-MORE-
<PAGE>
<PAGE>
Page 2
June 3, 1999
Commenting on the acquisition, Dr. Louis Centofanti, Chairman and
Chief Executive Officer commented, "The acquisition significantly expands
the size of our market, increases our geographic presence and represents
a strategic milestone in the growth of our Company. In addition, the
acquisition of Chem-Con is accretive to our earnings and will positively
impact our earnings per share. We will immediately capitalize on the use
of our proprietary technologies at these new locations, towards
establishing a dominant position in the waste treatment industry. Chem-
Con is excellently managed, and experiencing growth, particularly within
its government services division, which focuses on the Department of
Defense (DOD). Their established presence as a provider of waste
treatment services to the government significantly expands our own
capabilities in this area, and will compliment our efforts to provide
hazardous waste treatment services to the U.S. Departments of Defense and
Energy."
Tom Sullivan, principal owner and President of Chem-Con, who will
join the Perma-Fix Board, commented that, "I am excited to be joining
forces with Perma-Fix. The combination of Perma-Fix and Chem-Con, as a
larger entity, will create a new powerful, and highly competitive force
in the environmental industry."
Perma-Fix Environmental Services, Inc. provides unique hazardous,
mixed and industrial waste management services, along with environmental
engineering and consulting services. The Perma-Fix Process is a
proprietary mobile treatment technology that converts hazardous waste
into a non-hazardous material. The process is simple, safe, create little
or no volume increase and is the most cost-effective option on the market
today for the cleanup of mixed radioactive waste. Perma-Fix is widely
recognized for meeting customer needs with technologically advanced
alternatives to traditional landfill and incineration methods.
Please visit us on the World Wide Web at "www.perma-fix.com."
This press release contains "forward-looking statements" which are
based largely on the Company's expectations and are subject to various
business risks and uncertainties, certain of which are beyond the
Company's control. Forward-looking statements include, but are not
limited to, the information concerning the possible or assumed future
results of operations of the combined Companies, increased revenue,
enhanced profitability and growth opportunities and the impact on
earnings per share, economies of scale, new customers, access to new
products and additional markets as a result of the acquisition. These
forward-looking statements are intended to qualify for the safe harbors
from liability established by the Private Securities Litigation Reform
Act of 1995. While the Company believes the expectations reflected in
this news release are reasonable, it can give no assurance such
expectations will prove to be correct. There are a variety of factors
which could cause future outcomes to differ materially from those
described in this release, including without limitation, future economic
conditions, industry conditions, competitive pressures, or the ability of
<PAGE>
the Company to achieve the anticipated economies of scale, profitability
and growth. The Company makes no commitment to disclose any revisions to
forward-looking statements, or any facts, events or circumstances after
the date hereof that bear upon forward-looking statements.
****
