AGREEMENT AND PLAN OF MERGER
among
PERMA-FIX ENVIRONMENTAL SERVICES, INC.,
PERMA-MET, INC.,
CHEM-MET SERVICES, INC.,
THE XXXXXX X. XXXXXXXX LIVING TRUST,
THE XXX X. XXXXXXXX LIVING TRUST,
XXXXXX X. XXXXXXXX, an individual
and
XXX X. XXXXXXXX, an individual
MARCH 15, 1999
TABLE OF CONTENTS
_________________
Page
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ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .2
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . .2
1.2 "Chem-Con " . . . . . . . . . . . . . . . . . . . . . .2
1.3 "Chem-Con Agreement " . . . . . . . . . . . . . . . . .2
1.4 "Chem-Con Merger" . . . . . . . . . . . . . . . . . . .2
1.5 "Chem-Fix Settlement Agreement" . . . . . . . . . . . .2
1.6 "Chem-Met Common Stock. . . . . . . . . . . . . . . . .3
1.7 "Chem-Met Intellectual Property Right". . . . . . . . .3
1.8 "Closing" . . . . . . . . . . . . . . . . . . . . . . .3
1.9 "Closing Date". . . . . . . . . . . . . . . . . . . . .3
1.10 "Code". . . . . . . . . . . . . . . . . . . . . . . . .3
1.11 "Effective Time". . . . . . . . . . . . . . . . . . . .3
1.12 "Environmental Laws". . . . . . . . . . . . . . . . . .3
1.13 "Employment Agreement". . . . . . . . . . . . . . . . .3
1.14 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . .3
1.15 "Florida Perma-Chem". . . . . . . . . . . . . . . . . .3
1.16 "Facility". . . . . . . . . . . . . . . . . . . . . . .3
1.17 "Four County Landfill". . . . . . . . . . . . . . . . .4
1.18 "GAAP". . . . . . . . . . . . . . . . . . . . . . . . .4
1.19 "Georgia Perma-Chem". . . . . . . . . . . . . . . . . .4
1.20 "Governmental Authority". . . . . . . . . . . . . . . .4
1.21 "Laws". . . . . . . . . . . . . . . . . . . . . . . . .4
1.22 "Liens" . . . . . . . . . . . . . . . . . . . . . . . .4
1.23 "Merger". . . . . . . . . . . . . . . . . . . . . . . .4
1.24 "Mineral Rights". . . . . . . . . . . . . . . . . . . .4
1.25 "Permitted Encumbrances". . . . . . . . . . . . . . . .4
1.26 "Perma-Chem". . . . . . . . . . . . . . . . . . . . . .4
1.27 "Perma-Fix Common Stock". . . . . . . . . . . . . . . .4
1.28 "Quanta". . . . . . . . . . . . . . . . . . . . . . . .4
1.29 "Real Property" . . . . . . . . . . . . . . . . . . . .4
1.30 "Returns" . . . . . . . . . . . . . . . . . . . . . . .5
1.31 "Securities Act". . . . . . . . . . . . . . . . . . . .5
1.32 "Shares". . . . . . . . . . . . . . . . . . . . . . . .5
1.33 "SEC" . . . . . . . . . . . . . . . . . . . . . . . . .5
1.34 "Subsidiaries". . . . . . . . . . . . . . . . . . . . .5
1.35 "Surviving Corporations". . . . . . . . . . . . . . . .5
1.36 "Taxes" . . . . . . . . . . . . . . . . . . . . . . . .5
i
1.37 "10 Acre Tract" . . . . . . . . . . . . . . . . . . . .5
ARTICLE 2 THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 The Merger. . . . . . . . . . . . . . . . . . . . . .5
The Merger of Chem-Met with and into Perma-Met. . . . .5
2.2 Effective Time of the Merger. . . . . . . . . . . . . .5
2.3 Closing . . . . . . . . . . . . . . . . . . . . . . . .6
2.4 Effects of the Merger . . . . . . . . . . . . . . . . .6
ARTICLE 3 CONVERSION OF SECURITIES. . . . . . . . . . . . . . . . . .6
3.1 Conversion of Capital Stock . . . . . . . . . . . . . .6
3.1.1 Capital Stock of Perma-Fix . . . . . . . . . . .6
3.1.2 Capital Stock of Perma-Met . . . . . . . . . . .6
3.1.3 Chem-Met Capital Stock . . . . . . . . . . . . .6
3.1.4 Chem-Met Treasury Stock. . . . . . . . . . . . .7
3.2 Dissenters Rights . . . . . . . . . . . . . . . . . . .7
3.3 Exchange of Certificates. . . . . . . . . . . . . . . .7
3.3.1 Exchange . . . . . . . . . . . . . . . . . . . .7
3.3.2 Exchange Procedures. . . . . . . . . . . . . . .7
3.3.3 No Further Ownership Rights in Chem-Met Common
Stock. . . . . . . . . . . . . . . . . . . . . .8
3.3.4 No Fractional Shares . . . . . . . . . . . . . .8
3.3.5 No Liability . . . . . . . . . . . . . . . . . .8
3.3.6 Lost Certificates. . . . . . . . . . . . . . . .8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE ALS TRUST,
THE TPS TRUST, ALS, TPS AND CHEM-MET. . . . . . . . . . . .8
4.1 Organization of the Xxxxxxxx Trusts . . . . . . . . . .9
4.2 Organization of Chem-Met. . . . . . . . . . . . . . . .9
4.3 Capital Stock of Chem-Met . . . . . . . . . . . . . . .9
4.4 Ownership Interests in Securities . . . . . . . . . . .9
4.5 Financials. . . . . . . . . . . . . . . . . . . . . . 10
4.5.1 Financial Statements . . . . . . . . . . . . . 10
4.5.2 Liabilities. . . . . . . . . . . . . . . . . . 10
4.5.3 Net Worth. . . . . . . . . . . . . . . . . . . 10
4.5.4 Transactions Since September 30, 1998. . . . . 10
4.6 Tax and Other Returns, Reports and Pooling of
Interest. . . . . . . . . . . . . . . . . . . . . . . 11
4.6.1 Tax Returns. . . . . . . . . . . . . . . . . . 11
ii
4.6.2 Payment of Taxes . . . . . . . . . . . . . . . 11
4.6.3 Waiver of Statute of Limitations . . . . . . . 11
4.6.4 Tax Deficiencies . . . . . . . . . . . . . . . 11
4.6.5 Pooling of Interests . . . . . . . . . . . . . 11
4.7 Property. . . . . . . . . . . . . . . . . . . . . . . 12
4.7.1 Assets . . . . . . . . . . . . . . . . . . . . 12
4.7.2 Real Property. . . . . . . . . . . . . . . . . 12
4.7.3 Leases . . . . . . . . . . . . . . . . . . . . 12
4.7.4 Notice . . . . . . . . . . . . . . . . . . . . 12
4.7.5 Personal Property. . . . . . . . . . . . . . . 13
4.7.6 Notice from Insurance Carrier. . . . . . . . . 13
4.8 Intellectual Property . . . . . . . . . . . . . . . . 13
4.8.1 Ownership. . . . . . . . . . . . . . . . . . . 13
4.8.2 No Breach of License . . . . . . . . . . . . . 14
4.8.3 Year 2000 Issues . . . . . . . . . . . . . . . 14
4.9 Agreements, Contracts and Commitments . . . . . . . . 15
4.9.1 Contracts. . . . . . . . . . . . . . . . . . . 15
4.9.2 Written List . . . . . . . . . . . . . . . . . 16
4.10 No Breach of Statute or Contract;
Governmental Authorizations. . . . . . . . . . . . . . . . . . 17
4.10.1 No Violation . . . . . . . . . . . . . . . . . 17
4.10.2 Permits and Licenses . . . . . . . . . . . . . 18
4.10.3 Reports. . . . . . . . . . . . . . . . . . . . 18
4.10.4 Violation of Law . . . . . . . . . . . . . . . 18
4.10.5 Permits under Environmental Laws . . . . . . . 18
4.10.6 Other Permits. . . . . . . . . . . . . . . . . 19
4.11 No Litigation or Adverse Effects. . . . . . . . . . . 19
4.12 Authorization, Execution and Delivery of Agreement. . 20
4.13 Ability to Conduct the Business . . . . . . . . . . . 20
4.14 Disclosure. . . . . . . . . . . . . . . . . . . . . . 20
4.15 Broker's or Finder's Fee. . . . . . . . . . . . . . . 20
4.16 Insurance . . . . . . . . . . . . . . . . . . . . . . 21
4.17 Completeness of Documents -- Chem-Met . . . . . . . . 21
4.18 Completeness of Documents -- Xxxxxxxx Trusts. . . . . 21
4.19 Disposition of Assets . . . . . . . . . . . . . . . . 21
4.20 Obligations to Employees. . . . . . . . . . . . . . . 21
4.21 Condition of Plant, Machinery and Equipment . . . . . 23
4.22 Books of Account. . . . . . . . . . . . . . . . . . . 23
4.23 Stock Redemptions . . . . . . . . . . . . . . . . . . 23
4.24 Minute Books. . . . . . . . . . . . . . . . . . . . . 23
4.25 Indebtedness of Shareholders, etc . . . . . . . . . . 23
4.26 Business Prospects. . . . . . . . . . . . . . . . . . 24
4.27 Bank Accounts; Powers of Attorney . . . . . . . . . . 24
4.28 Sensitive Payments. . . . . . . . . . . . . . . . . . 24
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ARTICLE 5 ADDITIONAL REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE SULLIVANS AND THE XXXXXXXX TRUSTS. . 24
5.1 Affiliate Status. . . . . . . . . . . . . . . . . . . 24
5.2 Rule 145. . . . . . . . . . . . . . . . . . . . . . . 25
5.3 Legend. . . . . . . . . . . . . . . . . . . . . . . . 25
5.4 Restrictions on Certain Actions . . . . . . . . . . . 25
5.4.1 Prohibition Against Acquisition . . . . . . . .25
5.4.2 Prohibition Against Solicitation. . . . . . . .26
5.4.3 Prohibition Against Control . . . . . . . . . .26
5.5 Attendance. . . . . . . . . . . . . . . . . . . . . . 26
5.6 Specific Enforcement. . . . . . . . . . . . . . . . . 26
ARTICLE 6 NO SOLICITATION OF TRANSACTIONS . . . . . . . . . . . . . 27
6.1 No Solicitation of Transactions . . . . . . . . . . . 27
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PERMA-FIX . . . . . . . 27
7.1 Organization, etc . . . . . . . . . . . . . . . . . . 27
7.2 Authorization, Execution and Delivery of Agreement. . 28
7.3 Capital Stock of Perma-Fix. . . . . . . . . . . . . . 28
7.4 SEC Filings . . . . . . . . . . . . . . . . . . . . . 28
7.4.1 . . . . . . . . . . . . . . . . . . . . . . . . 28
7.4.2 . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4.3 Material Adverse Change. . . . . . . . . . . . 29
7.5 Status of Perma-Fix Common Stock. . . . . . . . . . . 29
7.6 No Breach of Statute or Contract, Governmental
Authorizations. . . . . . . . . . . . . . . . . . . . 29
7.7 No Litigation or Adverse Events . . . . . . . . . . . 30
7.8 Broker's or Finder's Fees . . . . . . . . . . . . . . 30
ARTICLE 8 COVENANTS OF CONDUCT AND TRANSACTIONS
PRIOR TO AND AFTER THE CLOSING. . . . . . . . . . . . . . 30
8.1 Investigations; Operation of Business of Chem-Met . . 30
8.1.1 Access to Premises and Books . . . . . . . . . 30
8.1.2 Business Organization of Chem-Met. . . . . . . 31
8.1.3 Ordinary Course of Business . . . . . . . . . .31
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8.1.4 Sale of Assets. . . . . . . . . . . . . . . . .33
8.2 No Selling of Shares or Granting of Options . . . . . 33
8.3 Disclosure in Proxy Statement . . . . . . . . . . . . 34
8.4 Consents. . . . . . . . . . . . . . . . . . . . . . . 34
8.5 Governmental Reports. . . . . . . . . . . . . . . . . 34
8.6 Conduct of Business . . . . . . . . . . . . . . . . . 34
8.7 Governmental Approvals. . . . . . . . . . . . . . . . 35
8.8 Encumber. . . . . . . . . . . . . . . . . . . . . . . 35
8.9 Title Policies for Real Property Owned by Chem-Met. . 35
8.10 Survey. . . . . . . . . . . . . . . . . . . . . . . . 35
8.11 Public Announcements. . . . . . . . . . . . . . . . . 35
8.12 Notification. . . . . . . . . . . . . . . . . . . . . 36
8.13 Filings . . . . . . . . . . . . . . . . . . . . . . . 36
8.14 Supplemental Disclosure . . . . . . . . . . . . . . . 36
8.15 SEC Filings . . . . . . . . . . . . . . . . . . . . . 36
8.16 Listing of Perma-Fix Common Stock . . . . . . . . . . 36
8.17 Perma-Fix Registration Statement, etc.. . . . . . . . 36
8.18 Information for Proxy Statements. . . . . . . . . . . 37
8.19 Registration Statement; Proxy Statement/Prospectus. . 37
8.20 Audited Financial Statements. . . . . . . . . . . . . 38
8.21 Public Disclosure . . . . . . . . . . . . . . . . . . 38
8.22 Pooling Accounting. . . . . . . . . . . . . . . . . . 38
8.23 Letter of Public Accountants. . . . . . . . . . . . . 38
8.24 Liability to Broker . . . . . . . . . . . . . . . . . 40
8.25 Assumption of Tax Liability and Quanta Liability. . . 40
8.26 Access to Premises and Books. . . . . . . . . . . . . 40
8.27 Quanta Merger and Exchange. . . . . . . . . . . . . . 41
8.28 T.A.S. Leasing, Inc . . . . . . . . . . . . . . . . . 41
ARTICLE 9 CONDITIONS OF TRANSACTIONS CONTEMPLATED BY AGREEMENT;
ABANDONMENT OF AGREEMENT. . . . . . . . . . . . . . . . . 42
9.1 Closing Conditions of Perma-Fix and Perma-Chem. . . . 42
9.1.1 Resolutions of Board of Directors and
Shareholders of Chem-Met . . . . . . . . . . . 42
9.1.2 Delivery of Trust Documents. . . . . . . . . .42
9.1.3 Approval by Lender. . . . . . . . . . . . . . . . . 42
9.1.4 Representations and Warranties of
the Sullivans and the Xxxxxxxx Trusts
to be True and Correct and Compliance With
Covenants . . . . . . . . . . . . . . . . . . . 42
v
9.1.5 Representations and Warranties of Chem-Met
to be True and Compliance With Covenants . . . . 43
9.1.6 Third Party Consents. . . . . . . . . . . . . . .43
9.1.7 No Material Adverse Change. . . . . . . . . . . .43
9.1.8 Statutory Requirements; Litigation. . . . . . . .43
9.1.9 Opinion of Counsel of Chem-Met, the
Sullivans and the Xxxxxxxx Trusts. . . . . . . . 44
9.1.10 Effective Registration Statement. . . . . . . . .44
9.1.11 Due Diligence . . . . . . . . . . . . . . . . . .44
9.1.12 Environmental Audit . . . . . . . . . . . . . . .44
9.1.13 Stock Certificates. . . . . . . . . . . . . . . .45
9.1.14 Permits . . . . . . . . . . . . . . . . . . . . .45
9.1.15 No Liens on Assets. . . . . . . . . . . . . . . .45
9.1.16 Listing of Perma-Fix Common Stock . . . . . . . .45
9.1.17 Minute Books and Stock Ledgers. . . . . . . . . .45
9.1.18 Financial Statements. . . . . . . . . . . . . . .45
9.1.19 Title Policies and Surveys. . . . . . . . . . . .45
9.1.20 Good Standing Certificates. . . . . . . . . . . .46
9.1.21 Resignation of Directors. . . . . . . . . . . . .46
9.1.22 Chem-Con Agreement. . . . . . . . . . . . . . . .46
9.1.23 Facility Remediation. . . . . . . . . . . . . . .46
9.1.24 Settlement of Four County Landfill PRP
Claims . . . . . . . . . . . . . . . . . . . . . 46
9.1.25 Settlement of Chem-Fix Claims.. . . . . . . . . .46
9.1.26 Pooling Letters.. . . . . . . . . . . . . . . . .46
9.1.27 Shareholder Approval. . . . . . . . . . . . . . .47
9.1.28 Shareholder Approval. . . . . . . . . . . . . . .47
9.1.29 Accountants Letters . . . . . . . . . . . . . . .47
9.1.30 Employment Agreement. . . . . . . . . . . . . . .47
9.1.31 Officer and Director Waiver . . . . . . . . . . .47
9.1.32 Quanta Transactions . . . . . . . . . . . . . . .47
9.1.33 Fairness Opinion. . . . . . . . . . . . . . . . .47
9.1.34 Closing Price of Perma-Fix Common Stock . . . . .47
9.1.35 TAS Lease . . . . . . . . . . . . . . . . . . . .48
9.2 Conditions to Obligations of Chem-Met and The
TPS Trust. . . . . . . . . . . . . . . . . . . . . . . .48
9.2.1 Resolutions of Perma-Fix Board of
Directors and Shareholders. . . . . . . . . . . .48
9.2.2 Resolutions of Perma-Met Board of
Directors and Shareholders. . . . . . . . . . . . 48
9.2.3 Representations and Warranties of Perma-Fix
to be True. . . . . . . . . . . . . . . . . . . . 48
9.2.4 Employment Agreement. . . . . . . . . . . . . . . 48
9.2.5 Effective Registration Statement. . . . . . . . . 48
9.2.6 No Material Adverse Change. . . . . . . . . . . . 49
9.2.7 Litigation. . . . . . . . . . . . . . . . . . . . 49
vi
9.2.8 Opinion of Counsel of Perma-Fix . . . . . . . . . 49
9.2.9 Escrow Agreement. . . . . . . . . . . . . . . . . 49
9.2.10 Closing Price of Perma-Fix Closing Stock. . . . . 49
9.3 Termination of Agreement and Abandonment of Merger. . . .49
9.3.1 Conditions . . . . . . . . . . . . . . . . . . . .50
9.3.2 Conditions of Perma-Fix Not Met. . . . . . . . . .50
9.3.3 Termination by Perma-Fix or the
Sullivans under Section 9.3 of the
Chem-Con Agreement . . . . . . . . . . . . . . . .50
9.3.4 Mutual Consent . . . . . . . . . . . . . . . . . .50
9.4 Expenses. . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE 10 TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS 50
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . .50
10.2 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE 11 INDEMNIFICATION AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . .51
11.1 Indemnification by the Sullivans and the
Xxxxxxxx Trusts . . . . . . . . . . . . . . . . . . . . .51
11.2 Notice of Claim . . . . . . . . . . . . . . . . . . . . .51
11.3 Survival of Representations and Remedies. . . . . . . . .52
11.4 Indemnification Period. . . . . . . . . . . . . . . . . .52
11.5 Settlement of Indemnification Claims. . . . . . . . . . .52
ARTICLE 12 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . .52
12.1 Entire Agreement and Amendment. . . . . . . . . . . . . .52
12.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .53
12.3 Governing Law . . . . . . . . . . . . . . . . . . . . . .53
12.4 Benefit of Parties; Assignment. . . . . . . . . . . . . .53
12.5 Pronouns. . . . . . . . . . . . . . . . . . . . . . . . .53
12.6 Headings. . . . . . . . . . . . . . . . . . . . . . . . .53
12.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . .53
12.8 Time. . . . . . . . . . . . . . . . . . . . . . . . . . .54
12.9 Severability. . . . . . . . . . . . . . . . . . . . . . .54
12.10 Counterparts. . . . . . . . . . . . . . . . . . . . . .54
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
vii
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" - Employment Agreement with Xxxxxx X. Xxxxxxxx
Exhibit "B" - Facility
Exhibit "C" - Permitted Encumbrances
Exhibit "D" - Description of 10 Acre Tract
Exhibit "E" - Certificate of Merger
Exhibit "F" - Opinion of Counsel of Chem-Met
Exhibit "G" - Opinion of Counsel of Perma-Fix
viii
AGREEMENT AND PLAN OF MERGER
____________________________
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), dated
as of the 15th day of March, 1999, among PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Perma-Fix"); PERMA-MET,
INC. a Michigan corporation and a wholly-owned subsidiary of Perma-
Fix ("Perma-Met"); CHEM-MET SERVICES, INC., a Michigan corporation
("Chem-Met"); The XXXXXX X. XXXXXXXX LIVING TRUST, dated September 6,
1978 ("TPS Trust"); The XXX X. XXXXXXXX LIVING TRUST, dated
September 6, 1978 ("ALS Trust"); XXXXXX X. XXXXXXXX, an individual
("TPS"); and XXX X. XXXXXXXX, an individual ("ALS"). Collectively,
the TPS Trust and the ALS Trust are referred to herein as the
"Xxxxxxxx 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, Perma-Met is directly or indirectly, a wholly
owned subsidiary of Perma-Fix;
WHEREAS, the Board of Directors of Perma-Fix, Perma-Met
and Chem-Met deem it advisable and in the best interest of each
corporation and its respective stockholders that Chem-Met merge
with and into Perma-Met, with Perma-Met being the survivor, in
order to advance the long-term business interest of each
corporation;
WHEREAS, the parties hereto desire that Chem-Met shall
be merged with and into Perma-Met, with Perma-Met being the
survivor (said transaction being hereinafter referred to as the
"Merger") pursuant to a plan of merger (the "Plan of Merger") in
which the stockholder of Chem-Met will become a stockholder of
Perma-Fix, and the parties desire to provide for certain
undertakings, conditions, representations, warranties and covenants
in connection with such transactions contemplated hereby;
WHEREAS, for Federal income tax purposes, it is
intended that the Merger shall qualify as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the "Code");
WHEREAS, for accounting purposes, it is intended that
the Merger shall be accounted for as a pooling of interests;
WHEREAS, the Board of Directors of Perma-Fix, Perma-Met
and Chem-Met have approved and adopted the Merger and this
Agreement; and
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 "Affiliate" has the meaning set forth in Rule 405 promulgated
under the Securities Act, whether or not such is an Affiliate
now or becomes an Affiliate after the date hereof.
1.2 "Chem-Con " shall collectively mean Chemical Conservation
Corporation, a Florida corporation ("Chemical Florida") and
Chemical Conservation of Georgia, Inc., a Georgia corporation
("Chemical Georgia").
1.3 "Chem-Con Agreement " shall mean that certain Agreement and
Plan of Merger among Perma-Fix, Perma-Con (as defined below),
Chem-Con, the Xxxxxxxx Trusts and the Sullivans, dated as of
the date of this Agreement, whereby Chemical Florida is to
merge with and into Florida Perma-Chem, a wholly owned
subsidiary of Perma-Fix, with Florida Perma-Chem being the
survivor Chemical Georgia is to merge with and into Georgia
Perma-Chem, a wholly owned subsidiary of Perma-Fix, with
Georgia Perma-Chem being the survivor.
1.4 "Chem-Con Merger" shall collectively mean the merger of
Chemical Florida with and into Florida Perma-Chem, with
Florida Perma-Chem being the survivor, and the merger of
Chemical Georgia with and into Georgia Perma-Chem, with
Georgia Perma-Chem being the survivor, all pursuant to the
Chem-Con Agreement.
1.5 "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.
2
1.6 "Chem-Met Common Stock" means the Chem-Met common stock, par
value $10.00 per share.
1.7 "Chem-Met Intellectual Property Right" has the meaning as
defined in Section 4.8.1 of this Agreement.
1.8 "Closing" has the meaning as specified in Section 2.3 hereof.
1.9 "Closing Date" has the meaning as specified in Section 2.3
hereof.
1.10 "Code" means the Internal Revenue Code of 1986, as amended.
1.11 "Effective Time" shall have the meaning set forth in Section
2.2 hereof.
1.12 "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.
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.
1.13 "Employment Agreement" shall have the meaning set forth in
Section 9.2.4 hereof, a copy of which is attached hereto as
Exhibit "A".
1.14 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated
thereunder.
1.15 "Florida Perma-Chem" shall mean Florida Perma-Chem, Inc., a
Florida corporation and a wholly owned subsidiary of Perma-
Fix.
1.16 "Facility" means the Real Property (as defined below) operated
and owned by Chem-Met, located at 00000 Xxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxx, and described in Exhibit "B" attached hereto.
3
1.17 "Four County Landfill" shall mean that certain landfill
facility located in DeLong, Indiana, known as the "Four County
Landfill Site".
1.18 "GAAP" means United States generally accepted accounting prin-
ciples.
1.19 "Georgia Perma-Chem" shall mean Georgia Perma-Chem, Inc., a
Georgia corporation and a wholly owned subsidiary of Perma-
Fix.
1.20 "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.
1.21 "Laws" mean any and all federal, state and local laws, rules,
regulations, codes, orders, ordinances, judgments, injunctions
and decrees.
1.22 "Liens" mean all security interests, liens, mortgages, claims,
charges, pledges, restrictions, equitable interests,
easements, property rights or encumbrances of any nature.
1.23 "Merger" has the meaning as defined in the seventh WHEREAS
clause of this Agreement.
1.24 "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.
1.25 "Permitted Encumbrances" means (i) liens listed on Exhibit "C"
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.
1.26 "Perma-Chem" shall collectively mean Florida Perma-Chem, a
Florida corporation and a wholly owned subsidiary of Perma-Fix
and Georgia Perma-Chem, a Georgia corporation and a wholly
owned subsidiary of Perma-Fix.
1.27 "Perma-Fix Common Stock" means the Common Stock, par value
$.001 per share, of Perma-Fix.
1.28 "Quanta" means Quanta Corporation, a Michigan corporation in
which all of its issued and outstanding capital stock is owned
by the ALS Trust.
1.29 "Real Property" means all real property, land, buildings,
improvements and structures owned, leased or used by Chem-Met.
4
1.30 "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.
1.31 "Securities Act" means the Securities Act of 1933, as amended.
1.32 "Shares" means all of the issued and outstanding shares of
capital stock of Chem-Met of whatsoever character and
description.
1.33 "SEC" means the U.S. Securities and Exchange Commission.
1.34 "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.
1.35 "Surviving Corporations" has the meaning as defined in Section
2.4.2 of this Agreement.
1.36 "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.
1.37 "10 Acre Tract" means that Real Property described in Exhibit
"D" attached hereto.
ARTICLE 2
THE MERGER
2.1 The Merger. The Merger of Chem-Met with and into Perma-Met.
Subject to the terms of this Agreement, Chem-Met shall merge
with and into Perma-Met, with Perma-Met being the surviving
corporation, in accordance with the applicable provisions of
the Michigan Business Corporation Act ("MBCA") and the terms
of this Agreement. Chem-Met and Perma-Met agree to the
Merger.
2.2 Effective Time of the Merger. Subject to the provisions of
this Agreement, at the Closing (as defined below) (i) the
Certificate of Merger regarding the Merger, a copy of which is
attached hereto as Exhibit "E" (the "Certificate of Merger"),
shall be duly executed and acknowledged by Chem-Met and Perma-
Met and delivered to and filed with the Secretary of State of
Michigan, as provided in the MBCA, on the Closing Date. The
Merger shall become effective upon the filing of the Articles
of Merger as herein described, or at such time thereafter as
shall be provided in the Articles of Merger (the "Effective
Time").
5
2.3 Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m., Eastern Standard Time, pursuant to the
terms of this Agreement on a date to be specified by Perma-Fix
and Chem-Met, which shall be no later than five business days
after approval of the Merger and the Chem-Con Merger by the
shareholders of Perma-Fix entitled to vote thereon (the
"Closing Date"), at the offices of Chemical Conversation
Corporation, 00000 Xxxxxx Xxxx., Xxxxxxx, Xxxxxxx 00000,
unless another date, place or time is agreed to in writing by
Perma-Fix and Chem-Met.
2.4 Effects of the Merger. At the Effective Time, Chem-Met shall
be merged with and into Perma-Met (Chem-Met and Perma-Met are
sometimes referred to below as the "Constituent Corporations"
and Perma-Met is sometimes referred to herein as the
"Surviving Corporation"), with Perma-Met being the survivor
and Chem-Met ceasing to exist, (ii) the Articles of
Incorporation of Perma-Met immediately prior to the Effective
Time shall be the Articles of Incorporation of the Surviving
Corporation, except that at the Effective Time Perma-Met shall
change its corporate name to Chem-Met Services, Inc. (iii) the
Bylaws of Perma-Met as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving
Corporation, and (iv) the purpose of the Surviving Corporation
shall be as set forth in Article II of the Articles of
Incorporation of Perma-Met immediately prior to the Effective
Time.
ARTICLE 3
CONVERSION OF SECURITIES
3.1 Conversion of Capital Stock. As of the Effective Time:
3.1.1 Capital Stock of Perma-Fix. Each share of capital
stock of Perma-Fix issued and outstanding immediately
prior to the Effective Time shall remain issued and
outstanding and be unchanged by the Merger;
3.1.2 Capital Stock of Perma-Met. Each share of capital
stock of Perma-Met issued and outstanding immediately
prior to the Effective Time shall remain issued and
outstanding and be unchanged by the Merger;
3.1.3 Chem-Met Capital Stock. Each share of Chem-Met capital
stock issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger, and
without any action on the part of the holder thereof,
be automatically canceled, be null and void and,
subject to the terms of this Article 3, all shares of
Chem-Met Common Stock issued and outstanding
immediately prior to the Effective Time shall, by
virtue of the Merger, and without any action on the
part of the holder thereof, be exchanged for that
number of fully paid and nonassessable shares of Perma-
Fix Common Stock determined by dividing $900,000 by the
6
average of the closing sale prices per share of the
Perma-Fix Common Stock as reported on the National
Association of Securities Dealers Automated Quotation
System ("NASDAQ") for five consecutive trading days
ending with the trading day immediately prior to the
Effective Time. During the five consecutive trading
days ending with the trading day immediately prior to
the Effective Time, the Company shall not, and shall
cause its officers and directors to not, buy or sell
any Perma-Fix Common Stock over the NASDAQ or the
Boston Stock Exchange.
3.1.4 Chem-Met Treasury Stock. All shares of Chem-Met Common
Stock that are owned by Chem-Met as treasury stock, if
any, shall be canceled and retired and shall cease to
exist and no Perma-Fix Common Stock or other
consideration shall be delivered in exchange therefor.
3.2 Dissenters Rights. The holders of all issued and outstanding
shares of Chem-Met Common Stock are parties to this Agreement
and they each agree, represent and warrant that none of them
shall exercise or attempt to exercise any dissenters rights,
right of appraisal or similar rights provided for under the
MBCA.
3.3 Exchange of Certificates. The procedures for exchanging
outstanding shares of Chem-Met Common Stock for Perma-Fix
Common Stock pursuant to the Merger are as follows:
3.3.1 Exchange. As of the Effective Time, Perma-Fix shall
deliver to the TPS Trust certificates representing the
shares of Perma-Fix Common Stock ( the "Exchange
Certificates") issuable pursuant to Section 3.1.2 in
exchange for outstanding shares of Chem-Met Common
Stock.
3.3.2 Exchange Procedures. At the Effective Time, the TPS
Trust, being the sole beneficial and record owner of
all of the issued and outstanding shares of capital
stock of Chem-Met, shall surrender to Perma-Fix all
certificates representing all of the issued and
outstanding shares of capital stock of Chem-Met (the
"Certificates"), duly and validly endorsed, in blank,
with signatures guaranteed by a national bank or
investment banking firm, for cancellation, 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 of Chem-Met Common Stock
a certificate representing that number of whole shares
of Perma-Fix Common Stock which such holder has the
right to receive pursuant to the provisions of Section
3.1.3 hereof, and the Certificates shall immediately be
canceled at the Effective Time. Until surrendered as
contemplated by this Section 3.3.2, the Certificates
representing shares of Chem-Met Common Stock shall be
deemed at any time after the Effective Time to
represent only the right to receive upon such surrender
the certificate representing shares of Perma-Fix Common
Stock as contemplated by Section 3.1.3 hereof.
7
3.3.3 No Further Ownership Rights in Chem-Met Common Stock.
All shares of Perma-Fix Common Stock issued upon the
surrender for exchange of Certificates in accordance
with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to
such shares of Chem-Met Common Stock. From and after
the Effective Time there shall be no further
registration of transfers on the stock transfer books
of the Surviving Corporations of the shares of Chem-Met
Common Stock which were outstanding immediately prior
to the Effective Time.
3.3.4 No Fractional Shares. No certificate or scrip
representing fractional shares of Perma-Fix Common
Stock shall be issued upon the surrender for exchange
of Certificates, and such fractional share interests
will not entitle the owner thereof to vote or to any
other rights of a stockholder of Perma-Fix.
3.3.5 No Liability. Neither Perma-Fix nor Chem-Met shall be
liable to any holder of shares of Chem-Met Common Stock
or Perma-Fix Common Stock, as the case may be, for such
shares (or dividends or distributions with respect
thereto) delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
3.3.6 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by
such person of a bond in such reasonable amount as such
Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to
such Certificate, Perma-Fix will issue in exchange for
such lost, stolen or destroyed Certificate the shares
of Perma-Fix Common Stock and unpaid dividends and
distributions on shares of Perma-Fix Common Stock
deliverable in respect thereof pursuant to this
Agreement.
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 and
Perma-Met that, as of the date of this Agreement and as of the
Closing, the following:
4.1 Organization of the Xxxxxxxx Trusts. The Xxxxxxxx Trusts are
valid trusts. ALS is the primary beneficiary under the ALS
8
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.
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.
9
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 above-referenced Audited
Financial Statements are true, correct and complete in
all material respects and correctly present the xxxxx-
cial 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
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
10
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, real property and foreign tax
returns required to be filed by the TPS Trust and Chem-
Met have been timely filed with the appropriate govern-
mental 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".
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
4.6.5 Pooling of Interests. To the best of their knowledge,
after consulting with its independent auditors, none of
Chem-Met, the Sullivans, the Xxxxxxxx Trusts nor any of
their Affiliates has taken or agreed to take any action
which would (i) prevent Perma-Fix from accounting for
the business combination to be effected by the Merger
11
as a pooling of interests or (ii) prevent the Merger
from constituting a transaction qualifying as a
reorganization under 368(a) of the Code.
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 Xxxxxxxx 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 Xxxxxxxx Trusts, the
Sullivans nor Chem-Met has any knowledge of any past,
12
present, or future events, conditions, circumstances,
activities, incidents, actions, or plans that may in
any way interfere with or limit the continued use of
said Real Property for all present or presently
proposed use of said Real Property.
4.7.5 Personal Property. Chem-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 Xxxxxxxx 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
outstanding 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 Intellectual Property Rights in
connection with any property or service produced, used
or sold by Chem-Met.
13
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 their 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 Xxxxxxxx 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
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,
14
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 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;
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;
15
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
Xxxxxxxx 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;
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,
16
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 Xxxxxxxx
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
Xxxxxxxx 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
Xxxxxxxx Trusts nor the performance or compliance by
the Chem-Met, the Sullivans or the Xxxxxxxx Trusts with
any of the terms and provisions of this Agreement will
violate any Laws of any governmental agency or auth-
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 Xxxxxxxx
Trusts may be subject to, or bound by, or of any
agreement or instrument to which Chem-Met, the
Sullivans or the Xxxxxxxx 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
17
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 Xxxxxxxx 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
Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx 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.
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
18
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 Xxxxxxxx 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 Xxxxxxxx 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
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
19
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 Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx Trusts, and this Agreement
constitutes the valid and binding agreement and obligation of
Chem-Met, the Sullivans and the Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx 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 or Perma-Chem 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 the Chem-Met, the Sullivans and/or the
Xxxxxxxx Trust or under the authority of Chem-Met, the
Sullivans and/or the Xxxxxxxx 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 Xxxxxxxx Trusts in connection with this
Agreement and the transactions contemplated herein. The
Sullivans and the Xxxxxxxx Trusts shall pay to WHCA Partners
any and all fees 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
20
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 con-
tractual, 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 Agree-
ment) 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 -- Xxxxxxxx Trusts. The copies of
the organizational documents of the Xxxxxxxx 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 pro-
perties 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.
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
21
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 investiga-
tions 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 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 experi-
enced 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
22
had any tax imposed upon it by the IRS for any alleged xxxxx-
tion under Section 4975 of the Code, or has engaged in any trans-
action 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 Xxxxxxxx Trusts for use in preparing those reports was
complete and accurate and none of Chem-Met, the Sullivans nor
the Xxxxxxxx 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.
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
23
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
their 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 XXXXXXXX TRUSTS
The Sullivans and the Xxxxxxxx Trusts, jointly and
severally, provide to Perma-Fix the following additional repre-
sentations, warranties and covenants:
5.1 Affiliate Status. Upon the execution of this Agreement, Chem-
Met, the Sullivans and the Xxxxxxxx Trusts will provide Perma-
Fix with a list of those persons who are, in Chem-Met's
reasonable judgment, "Affiliates" of Chem-Met within the
meaning of Rule 145 as promulgated under the Securities Act
("Rule 145") (each such person who is an "affiliate of Chem-
Met within the meaning of Rule 145 is referred to as a "Chem-
Met Affiliate"). Chem-Met, the Sullivans and the Xxxxxxxx
Trusts shall provide Perma-Fix with such information and
documents as Perma-Fix shall reasonably request for purposes
of reviewing such list and shall notify Perma-Fix in writing
regarding any change in the identity of the Chem-Met
Affiliates prior to the Closing Date.
5.2 Rule 145. The Sullivans and the Xxxxxxxx Trusts will not
offer, sell, pledge, hypothecate, transfer or otherwise
dispose of, or reduce their interest in or risk relating to,
any of the shares of Perma-Fix Common Stock issued to the
24
Xxxxxxxx Trusts under this Agreement as a result of the Merger
unless at such time either: (i) such transaction is permitted
pursuant to the provisions of Rule 145 under the Securities
Act; (ii) the undersigned shall have furnished to Perma-Fix an
opinion of counsel, reasonably satisfactory to Perma-Fix, to
the effect that such transaction is otherwise exempt from the
registration requirements of the Securities Act; or (iii) a
registration statement under the Securities Act covering the
proposed offer, sale, pledge, hypothecation, transfer or other
disposition shall be effective under the Securities Act.
5.3 Legend. The Sullivans and the Xxxxxxxx Trusts understand and
agree that stop transfer instructions will be given to Perma-
Fix's transfer agent and that there will be placed on the
certificate or certificates representing the Perma-Fix Common
Stock issuable under this Agreement, any substitutions
therefor and any certificates for additional shares which
might be distributed with respect to such Perma-Fix Common
Stock, a legend stating in substance:
"The shares represented by this certificate were
issued in a transaction to which Rule 145 of the
Securities Act of 1933 applies and may only be
transferred in accordance with the provisions of
such rule. In addition, the shares represented by
this certificate may only be transferred in
accordance with the terms of an Agreement and
Plan of Merger dated March 15, 1999, among Perma-
Fix Environmental Services, Inc. ("Perma-Fix"),
Perma-Met, Inc., Chem-Met Services, Inc., The
Xxxxxx X. Xxxxxxxx Living Trust, dated
September 6, 1978, The Xxx X. Xxxxxxxx Living
Trust, dated September 6, 1978, Xxxxxx X.
Xxxxxxxx and Xxx X. Xxxxxxxx, a copy of which
agreement may be inspected by the holder of this
certificate at the principal offices of Perma-
Fix, or furnished by Perma-Fix to the holder of
this certificate upon written request, without
charge."
5.4 Restrictions on Certain Actions. For a period of two (2)
years from the date of Closing, neither any of the Xxxxxxxx
Trusts nor any of the Sullivans shall, without the prior
consent of the Board of Directors of Perma-Fix (specifically
expressed in a resolution adopted by a majority of the Board
of Directors of Perma-Fix who are not employees,
representatives or agents of the Xxxxxxxx Trusts and/or the
Sullivans or any of their Affiliates):
5.4.1 Prohibition Against Acquisition. Except for the shares
of Perma-Fix Common Stock which the Xxxxxxxx Trusts
acquire under this Agreement and 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 Xxxxxxxx Trusts or any of the Sullivans to acquire,
directly or indirectly, or in conjunction with or
through any other person, firm, corporation, entity,
partnership, company or association, by purchase or
otherwise, beneficial ownership of any shares of Perma-
Fix Common Stock or any other voting securities of
Perma-Fix or any rights or option to acquire voting
securities of Perma-Fix or any securities convertible
into any voting securities of Perma-Fix (collectively,
25
"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 Section 5.4.1 to the contrary, Xxxxxxx X.
Xxxxxxxx and Xxxxxxx Xxxxxxxx, sons of TPS and ALS, may
acquire shares of Perma-Fix Common Stock.
5.4.2 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 Xxxxxxxx Trusts to solicit, or encourage any
solicitation of, (i) proxies with respect to Perma-Fix
Voting Securities under any circumstances, tender or
exchange offers with respect to Perma-Fix Voting
Securities under any circumstances, or (ii) any
election contest relating to the election of directors
of Perma-Fix; or
5.4.3 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
Xxxxxxxx Trusts have the right to select one (1)
nominee to the Board of Directors of Perma-Fix under
certain limited conditions.
5.5 Attendance. During the period that any of the Sullivans or
Xxxxxxxx Trusts is the beneficial owner of any shares of
Perma-Fix Common Stock acquired under this Agreement and the
Chem-Con Agreement, the Xxxxxxxx Trusts shall cause all such
shares of Perma-Fix Common Stock which they beneficially own
to be duly represented, in person or by proxy, at each meeting
of stockholders of Perma-Fix.
5.6 Specific Enforcement. The parties hereto recognize and agree
that, in the event any of the Sullivans or any of the Xxxxxxxx
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 Xxxxxxxx Trusts to perform their obliga-
tions 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 specif-
ically 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.
26
ARTICLE 6
NO SOLICITATION OF TRANSACTIONS
6.1 No Solicitation of Transactions. Chem-Met, the Sullivans and
the Xxxxxxxx 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 Xxxxxxxx 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 this Agreement and the Chem-Con Agreement) in
connection with any such proposed purchase or transaction; or,
(iii) negotiate, sell, offer to sell or solicit any offers to
purchase any outstanding shares of Chem-Con's and Chem-Met's
capital stock or any other securities of Chem-Con and Chem-Met
(other than pursuant to the terms of this Agreement and the
Chem-Con Agreement).
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PERMA-FIX
Perma-Fix and Perma-Met, jointly and severally,
represent and warrant 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-Met is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Michigan. 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 and, after the Registration
Statement has been declared effective by the SEC and obtaining
approvals from its shareholders, 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 Section 3.1.3 hereof and consum-
mate the transactions contemplated hereby and the Chem-Con
27
Agreement, and to perform the transactions contemplated by
this Agreement. Perma-Met has the corporate power and
authority to execute and deliver this Agreement and, subject
to the Registration Statement being declared effective by the
SEC and Perma-Fix obtaining approval from its shareholders and
its lender, to consummate the transactions contemplated
hereby.
7.2 Authorization, Execution and Delivery of Agreement. The exe-
cution, delivery and performance of this Agreement by Perma-
Fix and Perma-Met have been duly and validly authorized and
approved by the Board of Directors of Perma-Fix. This Agree-
ment constitutes the valid and binding agreement of Perma-Fix,
enforceable in accordance with its terms, subject to bank-
ruptcy, insolvency and other laws of similar import, and
Perma-Fix and Perma-Met have 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-Met and
Perma-Fix's and Perma-Met'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, 9,850 of
which are outstanding as of the date hereof; and
(ii)50,000,000 shares of Perma-Fix Common Stock, of which
12,419,080 shares are issued and outstanding as of the date
hereof and 13,577,163 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 and the TPS
Trust true and complete copies of the following docu-
ments which have been filed by Perma-Fix with the SEC
pursuant to Sections 13(a), 14(a), (b) or (c) or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")
(such documents are hereinafter collectively called the
"Perma-Fix SEC Filings"):
7.4.1.1 its Annual Report on Form 10-K for the year
ended December 31, 1997 (the "Form 10-K"), as
amended by Amendment No. 1 on Form 10-K/A
filed with the SEC on January 14, 1999;
7.4.1.2 quarterly reports on Form 10-Q for the
quarters ended March 31, 1998 and June 30,
1998; and
7.4.1.3 quarterly report on Form 10-Q for the quarter
ended September 30, 1998 ("Third Quarter 10-
Q"), as amended by Amendment No. 1 on Form 10-
Q/A filed January 14, 1999.
28
7.4.1.4 Proxy Statement, dated April 20, 1998, in
connection with its 1998 Annual Meeting of
Stockholders; and
7.4.1.5 Form 8-K, Date of Report (date of earliest
event reported): June 30, 1998.
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 September 30, 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 xxxxxxx-
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 Registration Statement being declared effective
by the SEC, obtaining approval by the shareholders of Perma-
Fix, the National Association of Securities Dealers ("NASD"),
the BSE and Perma-Fix's lender, neither the execution and
delivery of this Agreement by Perma-Fix and Perma-Met nor
compliance with the terms and provisions of this Agreement by
Perma-Fix and Perma-Met 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
29
any judgment, order, injunction, decree or ruling of any court
or governmental agency or authority to which Perma-Fix or
Perma-Met are 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 Perma-Met and their 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 Xxxxxxxx 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
Perma-Met, and their 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 and
Perma-Met with such financial and operating data and
other information with respect to the business and pro-
perties of Chem-Met, as Perma-Fix and Perma-Met shall
from time to time request; provided, however, that any
such investigation shall not affect any of the
representations, warranties or covenants of Chem-Met,
30
the Sullivans and/or the Xxxxxxxx Trusts hereunder;
and, provided further, that any such investigation
shall be conducted in such manner as not to interfere
unreasonably with the operation of the business of
Chem-Met. In the event of termination of this Agree-
ment, 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 and Perma-Met have obtained in
connection with their review, and Perma-Fix agrees that
any written information relating to Chem-Met and Chem-
Met's financial condition, business, operations and
prospects are strictly confidential and shall not be
voluntarily disclosed to any third party or used by
Perma-Fix for its benefit or the benefit of any other
person, except for such information or documents (i)
available generally to the public, (ii) in the posses-
sion 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-
Mets 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
31
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 Xxxxxxxx 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
32
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.
33
8.3 Disclosure in Proxy Statement. Perma-Fix agrees that none of the
information which has been or will be supplied in writing by
Perma-Fix for inclusion in the Proxy Statement relating to the
Merger will, at the time such Proxy Statement is mailed or at
the time of the meeting to which such Proxy Statement relates,
be false or misleading with respect to any material fact, or
will omit to state any material fact relating to Perma-Fix
necessary to order to make the statements therein not false or
misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of any
proxy for the meeting in connection with such Proxy Statement.
8.4 Consents. Chem-Met, the Sullivans, the Xxxxxxxx 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 Xxxxxxxx Trusts or Perma-Fix, as
the case may be, to consummate the transactions contemplated
by this Agreement.
8.5 Governmental Reports. Between the date of this Agreement and
the Closing, the Sullivans, the Xxxxxxxx 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.
8.6 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.
8.7 Governmental Approvals. Prior to Closing, each of Chem-Met,
the Sullivans and the Xxxxxxxx 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
34
all required Governmental Approvals as promptly as practicable
to consummate the transactions contemplated by this Agreement.
8.8 Encumber. None of Chem-Met, the TPS Trust nor the Xxxxxxxx
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.
8.9 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
insurance, dated as of a date within five (5) days of the
Closing Date, issued to Chem-Met and Perma-Met 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 (a) standard printed exceptions (other
than exceptions for mechanics', artisans' or materialmen's
liens and for matters that would be revealed by a survey) and
(b) 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.
8.10 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 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. The cost and expense
for such survey shall be shared equally by the Sullivans and
Perma-Fix.
8.11 Public Announcements. Perma-Fix, the Sullivans and the
Xxxxxxxx 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.
8.12 Notification. Chem-Met, the Sullivans and the Xxxxxxxx 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
35
time or both would constitute a breach of any representation
or warranty of Chem-Met, the Sullivans or the Xxxxxxxx Trusts
made herein or pursuant hereto and (ii) the taking of any
action by Chem-Met, the Sullivans or the Xxxxxxxx Trusts that
would breach or violate, or constitute a default under, any
agreement or covenant of Chem-Met, the Sullivans or the
Xxxxxxxx Trusts made herein or pursuant hereto. Upon the
giving of such notice, Perma-Fix may terminate this Agreement
in accordance with the terms hereof.
8.13 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.
8.14 Supplemental Disclosure. Chem-Met, the Sullivans and the
Xxxxxxxx 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
Xxxxxxxx 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 or Perma-Met.
8.15 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.
8.16 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.
8.17 Perma-Fix Registration Statement, etc. Prior to the Effective
Date of the Merger, Perma-Fix shall have prepared and filed
with the SEC a registration statement on Form S-4 (the
"Registration Statement") under the Securities Act for the
purpose of registering the shares of Perma-Fix Common Stock to
be issued pursuant to the terms of this Agreement and the
Chem-Con Agreement. Perma-Fix will use all reasonable efforts
to cause the Registration Statement to become effective as
soon as practicable and to thereafter maintain the
effectiveness of the Registration Statement up to the time of
36
the shareholders meetings of Chem-Con, Chem-Met and Perma-Fix
called for the purpose of approving this Agreement, the
Merger, the Chem-Con Agreement and the mergers thereunder are
held and up to and at the time of the delivery of the shares
of Perma-Fix Common Stock to be delivered to Chem-Con and
Chem-Met shareholders under the terms and provisions of this
Agreement and the Chem-Con Agreement as may be required by law
and the regulations of the SEC. Chem-Con, Chem-Met, the
Sullivans, the Xxxxxxxx Trusts and Perma-Fix will each take
such steps as may be necessary on their respective parts to
comply with any state securities or Blue Sky Laws applicable
to the action to be taken by them in connection with the
delivery by Perma-Fix to Chem-Con and Chem-Met stockholders of
the Perma-Fix Common Stock.
8.18 Information for Proxy Statements. 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 the Registration
Statement and the Proxy Statement (as defined below) provided
for by this Agreement and the Agreement of Merger.
8.19 Registration Statement; Proxy Statement/Prospectus. Chem-
Met, the Sullivans and the Xxxxxxxx Trusts, jointly and
severally, covenant and agree that the information to be
supplied by Chem-Met, the Sullivans and/or the Xxxxxxxx Trusts
pursuant to this Agreement and the Chem-Con Agreement for
inclusion in the Registration Statement pursuant to which
shares of Perma-Fix Common Stock issued in the Merger will be
registered under the Securities Act shall not at the time the
Registration Statement is declared effective by the SEC
("Effective Date") contain any untrue statement of a material
fact or omit to state any material fact required to be stated
in the Registration Statement or necessary in order to make
the statements in the Registration Statement, in light of the
circumstances under which they were made, not misleading. The
information supplied by Chem-Met, the Sullivans and/or the
Xxxxxxxx Trusts for inclusion in the proxy
statement/prospectus (the "Proxy Statement") to be sent to the
stockholders of Perma-Fix in connection with the meeting of
Perma-Fix's stockholders (the "Perma-Fix Stockholders'
Meeting") to consider this Agreement, the Merger and the
issuance of shares of Perma-Fix Common Stock pursuant to the
Merger shall not, on the date the Proxy Statement is first
mailed to stockholders of Perma-Fix, at the time of the Perma-
Fix Stockholders' Meeting and at the Effective Time, contain
any statement which, at such time and in light of the
circumstances under which it shall be made, is false or
misleading with respect to any material fact, or omit to state
any material fact necessary in order to make the statements
made in the Proxy Statement not false or misleading; or omit
to state any material fact necessary to correct any statement
in any earlier communication with respect to the solicitation
of proxies for the Perma-Fix Stockholders' Meeting which has
become false or misleading. If at any time prior to the
Effective Time any event relating to Chem-Met or any of its
Affiliates, officers, directors, employees or shareholders
which should be discovered by Chem-Met, the Sullivans and/or
the Xxxxxxxx Trusts which should be set forth in an amendment
to the Registration Statement or a supplement to the Proxy
Statement, Chem-Met, the Sullivans and/or the Xxxxxxxx Trusts
shall promptly inform Perma-Fix.
37
8.20 Audited Financial Statements. For inclusion in the
Registration Statement and Proxy Statement, Chem-Con, Chem-
Met, the Sullivans and the Xxxxxxxx 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
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 8.22 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 $200,000; (iii) accrued expenses of $600,000; (iv)
reserve for remediation of Chem-Con's Valdosta, Georgia
facility of $1,800,000; and (v) accrued closure costs of
$635,802, in which case the audit shall be paid for in its
entirety by Chem-Con.
8.21 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 Merger 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.
8.22 Pooling Accounting. From and after the date hereof and until
the Effective Time, neither Chem-Met nor Perma-Fix shall
knowingly take any action, or knowingly fail to take any
action, that is reasonably likely to jeopardize the treatment
of the Merger and the Chem-Con Merger as provided in the Chem-
Con Agreement as a pooling of interests for accounting
purposes.
8.23 Letter of Public Accountants. Chem-Met, the Sullivans and
the Xxxxxxxx Trusts shall cause to be delivered to Perma-Fix
letters, the first ("First Accountant Letter") of which shall
be dated not less than two days prior to the date on which the
Registration Statement becomes effective, and the second (the
"Second Accountant Letter") of 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
38
accountants in connection with registration statements similar
to the Registration Statement and shall contain, without
limitation, the following statements: (i) the combined Audited
Financial Statements of Chem-Con and Chem-Met examined by them
and included in the Proxy Statement and Registration Statement
comply as to form in all material respects with the applicable
accounting requirement 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 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 Proxy Statement discloses 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 Effective Date of
the Registration Statement and not more than five (5) days
prior to the Effective Time of the Merger 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 latest available unaudited consolidated interim
financial statements prepared by Chem-Con and Chem-Met to a
specified date within five (5) days of the effective date of
the Registration Statement and not more than five (5) days
prior to the Effective Time of the Merger 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 the Proxy
Statement and Registration Statement discloses have occurred
or may occur, and (d) that they have compared the financial
information which related to Chem-Con and Chem-Met appearing
in the Proxy Statement and Registration Statement with amounts
in the consolidated financial statements or accounting records
of Chem-Con and Chem-Met and have found them to be in
agreement.
8.24 Liability to Broker. The Sullivans have retained WHCA
Partners as an agent or firm acting on behalf of the
Sullivans and/or the Xxxxxxxx Trusts in connection with this
Agreement. Except as otherwise expressly provided in Section
4.15 hereof, the Sullivans and the Xxxxxxxx Trusts shall,
jointly and severally, pay any and all fees or renumeration
39
due and payable to WHCA Partners as a result of this
Agreement and/or consummation of the transactions
contemplated by this Agreement.
8.25 Assumption of Tax Liability and Quanta Liability. Each of
the Sullivans and the Xxxxxxxx Trusts, jointly and severally,
assume and agree to pay, when due, and 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.
8.26 Access to Premises and Books. That the Sullivans, the
Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx Trusts
with such financial and operating data and other information
with respect to the business and properties of Perma-Fix, as
the Sullivans or Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx Trusts have obtained in connection
with its review, and Chem-Met, the Sullivans and the Xxxxxxxx
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 Xxxxxxxx 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 Xxxxxxxx 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
40
Section shall terminate and be null and void twelve (12)
months from the date of this Agreement.
8.27 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 Xxxxx Xxxxxx Limited
Liability Company, a Michigan limited liability company
("Xxxxx Xxxxxx") shall have completed the transaction in
which Xxxxx Xxxxxx 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 Xxxxx Xxxxxx in the
principal sum of $365,000 ("Xxxxxx 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 Xxxxx Xxxxxx 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, Xxxxx Xxxxxx shall have full ownership of and have
full and complete authority to transfer and assign, the
Xxxxxx Note and the Chem-Con Note to Chem-Met, free and clear
of any and all Liens. The transaction contemplated by the
Exchange Transaction shall be on terms and in a manner that
is satisfactory to Perma-Fix. Notwithstanding anything in
this Section 8.27 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.
8.28 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.
41
ARTICLE 9
CONDITIONS OF TRANSACTIONS CONTEMPLATED BY AGREEMENT;
ABANDONMENT OF AGREEMENT
9.1 Closing Conditions of Perma-Fix and Perma-Chem. The obliga-
tions of Perma-Fix and Perma-Chem 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 Xxxxxxxx Trust shall have been delivered
to Perma-Fix evidencing, in form and content
satisfactory to Perma-Fix that each of the Xxxxxxxx
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 Perma-Met a working capital
line of credit from and after consummation of the
Merger on terms satisfactory to Perma-Fix. All of
Chem-Met's debts and obligations to Charter Bank shall
have been paid in full, and Charter Bank shall have
released all liens and security interest in and to the
assets of Chem-Met, all in form and substance
satisfactory to Perma-Fix.
9.1.4 Representations and Warranties of the Sullivans and
the Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx Trusts on or prior to the
Closing Date. The Sullivans and Xxxxxxxx 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 Xxxxxxxx Trusts, to both of
the aforementioned effects. The Certificate is to be
in form and substance satisfactory to Perma-Fix.
42
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.
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
Xxxxxxxx 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
Xxxxxxxx Trusts to Perma-Fix in accordance with this
Agreement or otherwise, which require such consents
and consents from, or notification to, all Gov-
ernmental Authorities which require such consents or
notifications.
9.1.7 No Material Adverse Change. There shall not have
occurred (i) any material adverse change since
September 30, 1998, in the business, properties,
assets, results of operations or financial condition
of Chem-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 Xxxxxxxx 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 Xxxxxxxx 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
43
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
Xxxxxxxx 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
Xxxxxxxx Trusts. Perma-Fix shall have received from
X'Xxxxxx & Xxxxx, counsel to Chem-Met, the Sullivans
and the Xxxxxxxx Trusts, or such other counsel
acceptable to Perma-Fix and its counsel, an opinion or
opinions, dated the Closing Date, substantially in
the form of Exhibit "F" hereto, with the form and
contents thereof reasonably satisfactory to Perma-Fix
and its counsel.
9.1.10 Effective Registration Statement. The Registration
Statement shall have become effective under the
Securities Act and shall not be subject to a stop
order or a proceeding seeking a stop order.
9.1.11 Due Diligence. Perma-Fix shall have completed its
financial due diligence of Chem-Met, with the results
thereof satisfactory to Perma-Fix.
9.1.12 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.
44
9.1.13 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.
9.1.14 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 Effective Time as
currently conducted by Chem-Met shall have been (i)
duly and validly transferred, or approved for transfer
effective upon the Closing, to Perma-Met by all
appropriate Governmental Authorities issuing such
permits, or (ii) duly and validly issued to Perma-Met
by all appropriate Governmental Authorities, all in
form and content satisfactory to Perma-Fix.
9.1.15 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.
9.1.16 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.
9.1.17 Minute Books and Stock Ledgers. The TPS Trust shall
have delivered to Perma-Fix the minute books and stock
ledgers for Chem-Met.
9.1.18 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 Registration Statement and Proxy Statement and
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 Bovtiz & Co., P.C., report in
connection therewith to be unqualified.
9.1.19 Title Policies and Surveys. Prior to the Closing
Date, Perma-Fix shall have received the title
insurance policies and surveys pursuant to Sections
8.8 and 8.9 hereof.
9.1.20 Good Standing Certificates. Good standing and tax
certificates (or analogous documents), dated as close
as practicable to the Closing, from the appropriate
authorities in each jurisdiction of incorporation of
Chem-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.
45
9.1.21 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.
9.1.22 Chem-Con Agreement. The Chem-Con Agreement shall have
closed contemporaneously with the Closing of this
Agreement.
9.1.23 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.
9.1.24 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
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.
9.1.25 Settlement of Chem-Fix Claims. Chem-Met's liability
under the Chem-Fix Settlement Agreement shall not
exceed $360,000.
9.1.26 Pooling Letters. Perma-Fix shall have received a
letter from BDO Xxxxxxx, LLP and a letter from Bovitz
& Co., P.C., addressed to Perma-Fix, regarding its
concurrence with management's conclusions that the
acquisition of Chem-Met pursuant to the terms of this
Agreement and the acquisition of Chem-Con pursuant to
the terms of the Chem-Con Agreement qualify for
pooling-of-interests accounting under Accounting
Principles Board Opinion No. 16, as contemplated to be
effected as of the date of the letter, it being agreed
that Perma-Fix and Chem-Met shall each provide
reasonable cooperation to BDO Xxxxxxx, LLP and Bovitz
and Co., P.C., to enable them to issue such a letter.
46
9.1.27 Shareholder Approval. Perma-Fix shareholders shall
have approved the Merger contemplated by this
Agreement and the mergers under the Chem-Con Agreement
as required under Delaware law and/or under the
requirements of NASDAQ or the BSE.
9.1.28 Shareholder Approval. The shareholders of Chem-Met
shall have approved the Merger transactions
contemplated by this Agreement 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.
9.1.29 Accountants Letters. Perma-Fix shall have received
the First Accountant Letter and the Second Accountant
Letter and such shall be satisfactory to Perma-Fix.
9.1.30 Employment Agreement. Perma-Fix and TPS shall have
entered into the Employment Agreement.
9.1.31 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.
9.1.32 Quanta Transactions. On or prior to Closing (i) the
Quanta Merger and the Exchange Transaction shall have
been completed pursuant to Section 8.27 hereof and in
a manner satisfactory to Perma-Fix.
9.1.33 Fairness Opinion. Prior to the filing of the
Registration Statement with the SEC and within five
(5) days of 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.
9.1.34 Closing Price of Perma-Fix Common Stock. The average
closing sale prices per share of Perma-Fix Common
Stock as reported on the NASDAQ for the five
consecutive trading days ending with the trading day
immediately prior to the Effective Date shall be not
less than $1.25.
9.1.35 TAS Lease. Prior to the Closing, TAS Leasing shall
become a wholly owned subsidiary of Chem-Met pursuant
to the terms of Section 8.28 hereof.
47
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 and the shareholders
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 Resolutions of Perma-Met Board of Directors and
Shareholders. Perma-Fix shall have furnished Chem-
Met with:
9.2.2.1 certified copies of resolutions duly adopted
by Perma-Met approving and authorizing execution,
delivery and performance of the transactions
contemplated by this Agreement; and
9.2.2.2 Incumbency Certificate for the officers of
Perma-Met.
9.2.3 Representations and Warranties of Perma-Fix to be
True. Except to the extent waived hereunder, (i) the
representations and warranties of Perma-Fix and Perma-
Met 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 and
Perma-Met shall have performed all material
obligations and complied with all material covenants
required by this Agreement to be performed or complied
with by it prior to the Closing. Perma-Fix shall also
have delivered to the 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.
9.2.4 Employment Agreement. Perma-Fix shall have entered
into the Employment Agreement ("Employment Agreement")
with Xxxxxx X. Xxxxxxxx.
9.2.5 Effective Registration Statement. The Registration
Statement shall have become effective under the
Securities Act and shall not be subject to a stop
order or a proceeding seeking a stop order.
9.2.6 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
48
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 Xxxxxxxx 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 Xxxxxxxx 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.
9.2.7 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 TPS Trust, Perma-Fix, Chem-Met, or any
of their subsidiaries) an investigation which is
pending on the Closing Date relating to the trans-
actions contemplated by this Agreement and between the
date of this Agreement and the Closing Date, no action
or proceeding shall have been instituted or, to the
knowledge of the Sullivans, the Xxxxxxxx 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 trans-
actions contemplated by this Agreement or to obtain
damages in respect thereof.
9.2.8 Opinion of Counsel of Perma-Fix. The TPS Trust shall
have received from Xxxxxx & Xxxxxxx, 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,
substantially in the form of Exhibit "G" hereto, with
the form and content thereof reasonably satisfactory
to Chem-Met and its counsel.
9.2.9 Escrow Agreement. Perma-Fix and the Escrow Agent
shall have executed the Escrow Agreement.
9.2.10 Closing Price of Perma-Fix Closing Stock. The average
closing sale prices per share of Perma-Fix Common
Stock as reported on the NASDAQ for the five
consecutive trading days ending with the trading day
immediately prior to the Effective Date shall not be
less than $1.25.
9.3 Termination of Agreement and Abandonment of Merger. Except
as otherwise provided in Sections 8.1 and 8.27 hereof, this
Agreement and the transactions contemplated hereby may be
terminated at any time before the Closing, whether before or
49
after approval of this Agreement by the shareholders of
Perma-Fix or Chem-Met, as follows and in no other manner:
9.3.1 Conditions of the Sullivans, the Xxxxxxxx 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 TPS Trust 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
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-
50
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 Xxxxxxxx Trusts.
The Sullivans and the Xxxxxxxx Trusts shall, jointly and
severally, defend, indemnify and hold harmless each of Perma-
Fix, Chem-Met, Perma-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, Chem-Met, Perma-Met, and each of their officers,
directors employees, agents, representatives and Affiliates
incurs or suffers or may incur or suffer at any time as a
result of or in connection with or arising out of (i) any
representation or warranty made by any of Chem-Met, the
Sullivans and/or the Xxxxxxxx Trusts in this Agreement or any
certificate or other document delivered to Perma-Fix or
Perma-Met pursuant to this Agreement that is false or
misleading; (ii) any breach of or failure to perform any
agreements, covenants, promises or obligations of Chem-Met,
the Sullivans and/or Xxxxxxxx Trusts contained in this Agree-
ment; (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
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; or (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 Xxxxxxxx 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 Xxxxxxxx or Chem-Met on
or prior to the Closing Date of CERCLA, RCRA or any analogous
state statute.
11.2 Notice of Claim. Perma-Fix shall give the Sullivans and the
Xxxxxxxx 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 Xxxxxxxx Trusts hereunder.
51
11.3 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.
11.4 Indemnification Period. Any claim for indemnification under
this Section 11 must be made and settled in full within one
year from the Closing Date ("Indemnification Period"). Upon
expiration of the Indemnification Period, this Section 11 is
terminated and any claims for indemnification pursuant to
this Section 11 are terminated.
11.5 Settlement of Indemnification Claims. Settlement of any
claims for indemnification pursuant to this Section 11 shall
be made through the delivery by the Sullivans and/or the
Xxxxxxxx Trusts of that number of shares of Perma-Fix Common
Stock determined by dividing the total amount of
indemnification due and owing from the Sullivans and/or the
Xxxxxxxx Trusts to Perma-Fix by the average of the closing
sale prices per share of Perma-Fix Common Stock as reported
on the NASDAQ for five consecutive trading days ending with
the trading day immediately prior to the Effective Time.
ARTICLE 12
MISCELLANEOUS
12.1 Entire Agreement and Amendment. This Agreement, including
the Exhibits and Schedules hereto, 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, definition, warranty or representation other than
as expressly provided for in this 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 Agree-
ment (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 dis-
charged except by performance in accordance with its terms or
by a writing signed by each party to be charged.
12.2 Taxes. Any Taxes in the nature of a sales or transfer tax
(including any realty transfer tax or realty gains transfer
tax), and any stock transfer tax, payable on the consummation
of any other transaction contemplated hereby shall be paid by
the Sullivans and the Xxxxxxxx Trusts.
52
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.
0000 Xxxxxxxxx 00xx Xxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: President
With a copy to: Xxxxx X. Xxxxxxxxx, Esquire
Xxxxxx & Xxxxxxx
One Leadership Square
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
If to Chem-Met,
the Sullivans and
the Xxxxxxxx Trusts: Xx. Xxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx, President
53
With a copy to: Xxxxx X'Xxxxxx, Esq.
X'Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxx 00000
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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
54
IN WITNESS WHEREOF, the parties hereto execute this
Agreement on the 15th day of March, 1999.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
_________________________________________
Xx. Xxxxx X. Xxxxxxxxxx
President
PERMA-MET, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
_________________________________________
Xx. Xxxxx X. Xxxxxxxxxx
President
CHEM-MET SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
_________________________________________
Xxxxxx X. Xxxxxxxx
President
55
THE XXXXXX X. XXXXXXXX LIVING TRUST,
Dated September 6, 1978
By: /s/ Xxxxxx X. Xxxxxxxx
_______________________________________
Xxxxxx X. Xxxxxxxx, Sole Trustee, under
the Xxxxxx X. Xxxxxxxx Living Trust,
Dated September 6, 1978, and any
Amendments thereto.
THE XXX X. XXXXXXXX LIVING TRUST, Dated
September 6, 1978
By: /s/ Xxx X. Xxxxxxxx
__________________________________________
Xxx X. Xxxxxxxx, Sole Trustee, under the
Xxx X. Xxxxxxxx Living Trust, Dated
September 6, 1978, and any amendments
thereto.
XXXXXX X. XXXXXXXX
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________________
Xxxxxx X. Xxxxxxxx, individually
XXX X. XXXXXXXX
By: /s/ Xxx X. Xxxxxxxx
_________________________________________
Xxx X. Xxxxxxxx, individually
