CONSULTING AGREEMENT
________________________
THIS CONSULTING AGREEMENT (this "Agreement") is made this 8th
day of April, 1998, but shall be considered effective as of
January 1, 1998, by and between PERMA-FIX ENVIRONMENTAL SERVICES,
INC., a Delaware corporation (the "Company"), and XXXXXX X.
XXXXXXXXXX XX, an individual ("Warrington").
W I T N E S S E T H:
WHEREAS, Warrington has experience in financial matters;
WHEREAS, the Company wishes to engage Warrington as an
independent, outside consultant to the Company, and Warrington
desires to accept such engagement, pursuant to the terms and
conditions of this Agreement;
WHEREAS, in consideration for such engagement, the parties
desire to provide for the issuance of shares of the Company's
Common Stock, par value $.001 per share ("Common Stock"), on terms
and subject to the conditions hereinafter set forth; and,
WHEREAS, the parties do not intend that this Agreement qualify
under Section 401 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. Engagement of Warrington. The Company does hereby engage
Warrington, and Warrington does hereby accept such engagement,
as an outside, independent consultant to provide the following
consulting services for the Company:
1.1 Financial consulting to the Board of Directors, Chief
Executive Officer and Chief Financial Officer of the
Company; and
1.2 Such other financial consulting services to be performed
on behalf of the Company or subsidiaries of the Company
as reasonably requested by the Chairman of the Board or
Chief Executive Officer of the Company.
Provided, however, that Warrington shall render bona fide
consulting services to the Company under this Agreement.
2. Term. Warrington will provide the above consulting services
for the Company under this Agreement on a month-to-month basis
for an indefinite period of time from the date of this
Agreement (the "Term"). This Agreement is terminable by
either party hereto by giving the other party hereto thirty
days written notice of termination of this Agreement. At the
end of such thirty day notice period, this Agreement shall
terminate, except for Section 4 hereof, which shall remain in
effect as indicated therein.
3. Compensation. In consideration of Warrington providing the
consulting services under this Agreement, the Company agrees
to pay to Warrington $1,000 for each month of service
hereunder ("Consulting Fee"). Such Consulting Fee will accrue
on a monthly basis, but, shall be payable on an annual basis
as described hereafter. At the Company's discretion, any
consulting fees earned by Warrington for work in past years
which are accrued and remain unpaid, may be considered to be
an additional part of the Consulting Fee to be paid
accordingly. At Warrington's option, the Consulting Fee is
payable by either: (i) paying Warrington sixty-five percent
(65%) of the Consulting Fee in Common Stock, with the balance
paid in cash or its equivalent; or (ii) paying Warrington one
hundred percent (100%) of the Consulting Fee in Common Stock;
or (iii) paying Warrington one hundred percent (100%) of the
Consulting Fee in cash or its equivalent. The number of
shares of Common Stock received by Warrington hereunder will
be determined by valuing the Common Stock at seventy-five
percent (75%) of its Fair Market Value as determined herein,
which Fair Market Value (as defined in this Section 3) is
determined on the date on which Warrington makes his election
as to the method of payment. Within ninety days of the end of
each calendar year during which this Agreement is in effect,
the Consulting Fee which accrued during the calendar year just
ended and which remains unpaid shall be paid to Warrington as
described herein.
3.1 Sixty-Five Percent Common Stock Election. If Warrington
elects to receive sixty-five percent (65%) of the
Consulting Fee in Common Stock: (i) Warrington will
receive the number of shares of Common Stock obtained by
dividing sixty-five percent (65%) of the accrued and
unpaid Consulting Fee by seventy-five percent (75%) of
the Fair Market Value of the Common Stock and (ii)
Warrington will receive thirty-five percent (35%) of the
accrued and unpaid Consulting Fee in cash or its
equivalent.
3.2 One Hundred Percent Common Stock Election. If Warrington
elects to receive one hundred percent (100%) of the
Consulting Fee in Common Stock, he will receive the
number of shares of Common Stock obtained by dividing the
accrued and unpaid Consulting Fee by seventy-five percent
(75%) of the Fair Market Value of the Common Stock.
3.3 One Hundred Percent Cash Election. If Warrington elects
to receive one hundred percent (100%) of the Consulting
Fee in cash or its equivalent, he will receive such.
3.4 Election Procedure. The Consulting Fee will be paid on
a annual basis within ninety days of the end of each
calendar year as described in Section 3 unless otherwise
specified by the Board of Directors of the Company.
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Xxxxxxxxxx shall make an annual election as to the form
of his Consulting Fee for each year prior to the last day
of the applicable year unless otherwise approved by the
Company.
3.5 Fair Market Value. The Fair Market Value shall be the
closing bid price of the Common Stock on the NASDAQ Small
Cap on the date on which Warrington makes his election as
to the method of payment of the accrued Consulting Fee
or, in the event no such quotations are available for the
day in question, Fair Market Value shall be the closing
bid price of the Common Stock on the NASDAQ Small Cap on
the most recent trading day prior to such day. The
valuation date may be modified by the Board of Directors
of the Company.
4. Confidential Information. During the Term and for a period of
twelve (12) months following the termination of the Term, (i)
Warrington shall hold, in a fiduciary capacity for the benefit
of the Company and all subsidiaries of the Company, all secret
or confidential information, knowledge or data relating to the
Company and all subsidiaries of the Company or any of their
affiliated companies and their respective businesses, which
shall have been obtained by Warrington at any time and which
shall not be public knowledge (other than by acts of
Warrington or his representatives in violation of this
Agreement), including, without limitation, customer lists, bid
proposals, contracts, matters subject to litigation and
information regarding periods and environmental applications,
and (ii) Warrington shall not, without the prior written
consent of the Company, communicate or divulge any such
information, knowledge or data to anyone other than the
Company and those designated by it.
5. Other Restrictions and Legends.
5.1 Acquisition for Own Account; No Registration. Warrington
represents and warrants that the shares of Common Stock
acquired hereunder are being acquired for his own account
and for the purpose of investment and not with a view to
the sale or distribution thereof, except for sales
pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Act") and any
applicable state securities laws, or a transaction exempt
from registration thereunder, and shall not make any
sale, transfer or other disposition of the Common Stock
in violation of any applicable state securities laws,
including in each instance any applicable rules and
regulations promulgated thereunder, or in violation of
the Act or the rules and regulations promulgated
thereunder by the Securities and Exchange Commission (the
"SEC"). Warrington understands that these shares of
Common Stock have not been registered under the Act or
any state securities laws (the Company being under no
obligation to effect such registration) and that such
shares must be held indefinitely unless a subsequent
disposition thereof is registered under the Act and
applicable state securities law or is exempt from
registration thereunder. Warrington further understands
that the exemption from registration afforded by Rule 144
under the Act depends upon the satisfaction of various
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conditions and that, if applicable, Rule 144 affords the
basis for sale of such shares only in limited amounts.
5.2 Disposition of Shares. Warrington represents, covenants,
and agrees that he will not sell or otherwise dispose of
the shares of Common Stock acquired under this Agreement
in the absence of (a) an effective registration statement
under the Act and any applicable state securities laws,
or (b) an opinion acceptable in form and substance to the
Company from Warrington's counsel satisfactory to the
Company, or an opinion of counsel to the Company, to the
effect that no registration is required for such
disposition.
5.3 Restrictive Legend. The certificates representing shares
covered by this Agreement shall upon issuance thereof
have stamped or imprinted thereon or affixed thereto a
legend to the following effect:
THE REGISTERED HOLDER HEREOF HAS ACQUIRED
THE SHARES REPRESENTED BY THIS
CERTIFICATE FOR INVESTMENT AND NOT FOR
RESALE IN CONNECTION WITH A DISTRIBUTION
THEREOF. ACCORDINGLY, SUCH SHARES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO A CURRENTLY EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR
OTHERWISE IN A TRANSACTION EXEMPT FROM
THE PROVISIONS OF SECTION 5 OF SAID ACT.
5.4 Compliance with Law and Approval of Regulatory Bodies.
No shares will be issued except in compliance with all
applicable Federal and state laws and regulations and in
compliance with rules of stock exchanges on which the
Company's Common Stock may be listed.
5.5 Receipt of Company SEC Filings and Press Releases.
Warrington has received and had an opportunity to review
true and complete copies of the following documents which
have been filed by the Company with the Securities and
Exchange Commission ("SEC") (such documents are
hereinafter collectively referred to as the "SEC
Filings"): (i) Annual Report on Form 10-K for the year
ended December 31, 1996 (the "Form 10-K"); (ii) the
Company's quarterly report on Form 10-Q for the quarter
ended March 31, 1997; (iii) the Company's quarterly
report on Form 10-Q for the quarter ended June 30, 1997;
(iv) the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1997; (v) the Company's
current report on Form 8-K dated February 7, 1997; (vi)
the Company's current report on Form 8-K/A dated June 11,
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1997; (vii) the Company's current report on Form 8-K
dated July 7, 1997; (viii) the Company's current report
on Form 8-K dated January 7, 1998 and, (ix) any and all
other documents which have been filed by the Company pur-
suant to Sections 13(a), 14(a), 14(c), and 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")
since January 1, 1997. In addition, Warrington has
received and has had an opportunity to review (i) all
information required pursuant to Rule 502(b)(2) of
Regulation D under the Act and (ii) all press releases of
the Company which have been issued since January 1, 1997.
5.6 Availability of SEC Filings Exhibits. Warrington hereby
acknowledges that the Company has provided to
Warrington, at a reasonable time prior to execution of
this Agreement, the following: (i) a list of the material
exhibits to the Company SEC Filings identifying the
contents of each material exhibit; (ii) such material
exhibits upon the written request of Warrington, and
(iii) the opportunity to ask questions and to receive
answers concerning the terms and conditions of this
Agreement and to obtain any additional information which
the Company possesses or can acquire without unreasonable
effort or expense that is necessary to verify the
accuracy of the information furnished pursuant to Section
5.5 and this Section 5.6 hereof.
5.7 Updating of Information. The Company warrants that it
shall provide Warrington with copies of all filings made
by the Company with the SEC pursuant to Sections 13(a),
14(a), 14(c), and 15(d) of the Exchange Act and with all
press releases of the Company from the date hereto to the
date of termination of this Agreement.
5.8 Investment Expertise and Accredited Investor. Warrington
represents and warrants that:
5.8.1 Warrington has such knowledge and experience
in financial and business matters that he is
capable of evaluating the merits and risks of
the acquisition of the Common Stock under this
Agreement
5.8.2 Warrington is an "accredited investor" as such
term is defined in Rule 501 of Regulation D as
promulgated under the Act, due to fact that
(a) Warrington is unmarried and has had an
individual income in excess of $200,000 in
each of the two most recent years and has a
reasonable expectation of reaching the same
income level in the current year and/or (b)
Warrington has an individual net worth in
excess of $1,000,000.
5.8.3 If Warrington's income level falls below
$200,000 a year or his individual net worth
falls below $1,000,000, he will immediately
inform the Company of such fact in writing.
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5.9 Blue Sky Laws. The Common Stock offered hereunder has not
been registered under any applicable state securities
laws and may not be sold or transferred except in
compliance with any applicable state securities laws.
6. Miscellaneous.
6.1 Assignment and Binding Effect. The respective rights and
obligations of the parties under this Agreement shall be
binding upon the parties hereto and their heirs,
executors, administrators, successors and permitted
assigns; provided, however, that the Company may not
assign its rights hereunder without the prior written
consent of Warrington.
6.2 Governing Law. This Agreement shall be governed as to
its validity, interpretation and effect by the laws of
the State of Delaware.
6.3 Entire Agreement; Amendments. This Agreement constitutes
the entire agreement and understanding of the Company and
Warrington with respect to the terms of Warrington's
consultancy relationship with the Company and supersedes
all prior discussions, understandings and agreements with
respect to such consultancy relationship. This Agreement
may not be amended unless by the mutual written consent
of all of the parties hereto.
6.4 Captions. All captions and headings used herein are for
convenient reference only and do not form part of this
Agreement.
6.5 Waiver. The waiver of a breach of any term or provision
of this Agreement shall not operate as, or be construed
to be, a waiver of any other or subsequent breach of this
Agreement.
6.6 Notices. Any notice or communication required or
permitted under this Agreement shall be made in writing
and shall be delivered by hand, or mailed by registered
or certified mail, return receipt requested, or first
class postage prepaid, addressed as follows:
if to Warrington, to: Xxxxxx X. Xxxxxxxxxx XX
x/x Xxxxx Xxxx Xxxxx
0000 XxXxxxxx, Xxxx 000
Xxxxxxx, Xxxxx 00000
if to the Company to: Perma-Fix Environmental
Services, Inc.
0000 Xxxxxxxxx 00xx Xxxxx
Xxxxx X
Xxxxxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxxxxx,
Chairman
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6.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute one and the
same Agreement.
6.8 Legal and Tax Effects. This Agreement is not qualified
under Section 401 of the Internal Revenue Code of 1986,
as amended. Warrington understands that the Company is
not provided any legal or tax advice regarding this
Agreement and that Warrington is to consult with his
legal and tax consultants regarding this Agreement.
6.9 Independent Contractor. Warrington is an independent
contractor and is not, in any manner, an employee or
agent of the Company or any subsidiary of the Company.
Warrington may not bind the Company or any subsidiary of
the Company in any manner whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this
Consulting Agreement on the date first above written.
/s/ Xxxxxx X. Xxxxxxxxxx XX
________________________________
Xxxxxx X. Xxxxxxxxxx XX
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By: /s/ Xxxxx Xxxxxxxxxx
_________________________
Xx. Xxxxx X. Xxxxxxxxxx
Chairman of the Board and
Chief Executive Officer
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