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
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
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
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
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
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
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
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
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
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
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
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
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
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.
6
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.
7
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
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".
9
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.
10
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
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
12
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
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
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
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.
16
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.
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
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
18
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
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
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.
21
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
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.
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.
23
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,
24
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
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
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),
26
(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
27
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
28
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
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
29
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
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
30
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.
31
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.
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
32
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.
33
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
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
34
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
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.
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
36
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
37
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
38
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.
39
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.
40
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.
41
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
42
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.
43
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.
44
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
45
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
46
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
47
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
48
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
49
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
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.
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