AMENDMENT TO LEASE AGREEMENT
DATED April 14, 1997
_______________
This Amendment becomes a part of the Equipment Lease Agreement dated
as of October 12, 1994, and the accompanied Rider No. 2, amended as
of November 14, 1996, wherein Perma-Fix Environmental Services Inc.,
Perma-Fix of Memphis Inc., Perma-Fix of Ft. Lauderdale Inc., Perma-
Fix of Dayton Inc., and Perma-Fix Treatment Services Inc. as Lessees
and Ally Capital Corporation is Lessor, whereas the attached Exhibit
A Sections 1.2, 1.3 and 1.4 are further amended. All other conditions
of the Equipment Lease Agreement including the August 16, 1996, and
November 14, 1996, amendments remain in force and effect.
WITNESSETH THAT:
WHEREAS, certain Events of Default have occurred and are
continuing under the Equipment Lease Agreement as described on
Exhibit A-1 attached hereto (the "Existing Events of Default"); and
WHEREAS, Lessees have requested that Lessor waive the Existing
Events of Default, amend the financial covenants set forth in
Section 1 of the Equipment Lease Agreement in certain respects, and
amend certain other provisions of the Equipment Lease Agreement as
set forth hereinbelow; and
WHEREAS, pursuant to Lessees request and subject to all of the
terms and conditions set forth herein (including, without
limitation, payment by Lessees to Lessor of the fee described in
Section 5 hereof), Lessor is willing to waive the existing Events
of Default, and to amend the Equipment Lease Agreement in the manner
hereinafter set forth; and
WHEREAS, Lessees and Lessor desire to enter into this Amendment
in order to memorialize their mutual understandings in regard to the
foregoing matters.
PERMA-FIX SERVICES INC. AND PERMA-
FIX OF MEMPHIS INC. AND PERMA-FIX OF
FT. LAUDERDALE INC. AND PERMA-FIX OF
DAYTON INC. AND PERMA-FIX TREATMENT
SERVICES INC. -- CO-LESSEES.
ALLY CAPITAL CORPORATION PERMA-FIX ENVIRONMENTAL
AS LESSOR SERVICES, INC.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
_______________________ _________________________________
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President Title: CEO
PERMA-FIX OF MEMPHIS INC.
By: /s/ Xxxxx Xxxxxxxxxx
_________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: CEO
PERMA-FIX OF FT. LAUDERDALE INC.
By: /s/ Xxxxx Xxxxxxxxxx
_________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: CEO
PERMA-FIX OF DAYTON INC.
By: /s/ Xxxxx Xxxxxxxxxx
_________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: CEO
PERMA-FIX TREATMENT SERVICES INC.
By: /s/ Xxxxx Xxxxxxxxxx
_________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: CEO
EXHIBIT "A"
__________
TO AMENDMENT TO LEASE AGREEMENT
_______________________________
Dated April 14, 1997
FINANCIAL COVENANTS Section 1.
_____________________________
Perma-Fix Environmental Services Inc. and its subsidiaries on a
consolidated basis covenant and agree that until payment in full of
all Obligations owed by Perma-Fix Environmental Services Inc. to
Ally Capital are paid, Perma-Fix shall comply with all covenants in
Section 1, as previously defined. Sections 1.2, 1.3, and 1.4 are
hereby deleted in their entirety and the following revised sections
substituted in lieu thereof. The terms used in this Exhibit "A" to
amendment to lease agreement shall have the meanings as defined in
the loan and security agreement dated as of January 27, 1995 among
Perma-Fix Environmental Services Inc. and subsidiaries and Xxxxxx
Financial Inc. as amended to the date of this amendment.
1.2 Minimum EBITDA.
______________
Parent shall achieve an EBITDA of at least the amount set
forth below for each applicable period set forth below (or with
respect to each period for which a negative amount is set forth
below, shall not permit EBITDA to be more negative than such
amount):
Applicable Period Amount
_________________ ______
Three Months Ended 3/31/97 $(340,000)
Six Months Ended 6/30/97 $320,000
Nine Months Ended 9/30/97 $1,360,000
Twelve Months Ended 12/31/97 $2,275,000
and for each twelve month
period ending on the last
day of each fiscal quarter
thereafter
1.3 Capital Expenditures Limits
___________________________
The aggregate amount of all Capital Expenditures of Parent
and its Subsidiaries (excluding trade-ins and excluding Capital
Expenditures financed pursuant to Capital Leases permitted will not
exceed the amount set forth below for each applicable period set forth
below (on a cumulative basis for all periods ending on or prior to
December 31, 1997):
Applicable Period Amount
_________________ ______
Three Months Ended 3/31/97 $ 266,000
Six Months Ended 6/30/97 $ 416,000
Nine Months Ended 9/30/97 $ 516,000
Twelve Months Ended 12/31/97 $ 591,000
Each fiscal Quarter Ending $ 100,000
After 12/31/97
In addition, if pursuant to Section 2 hereof Lessees
obtain aggregate cash infusions in excess of Seven Hundred Thousand
Dollars ($700,000) on or prior to August 15, 1997, then the Capital
Expenditures limitation for the remainder of Lessees' 1997 Fiscal
Year shall be increased by the amount by which such cash infusions
exceed Seven Hundred Thousand Dollars ($700,000); provided, however,
that Lessees will be permitted to make Capital Expenditures in
such increased amount only if (a) for the thirty (30) days prior the
making of each such Capital Expenditure and after giving effect
thereto, the Maximum Revolving Loan Amount shall exceed the
outstanding amount of the Revolving Loan by at least Two Hundred
Thousand Dollars ($200,000) and (b) at the time any such Capital
Expenditures are to be made no Default or Event of Default has
occurred and is continuing or would result therefrom.
1.4 Fixed Charge Coverage.
_____________________
Parent shall not permit Fixed Charge Coverage for each
applicable period set forth below to be less than the ratio set
forth below for such period (or if the ratio set forth below for any
applicable period is negative, shall not permit Fixed Charge
Coverage for such applicable period to be a larger negative ratio
than that set forth below):
Applicable Period Ratio
_________________ _____
Three Months Ended 3/31/97 (1.20:1.0)
Four Months Ended 4/30/97 (.75:1.0)
Five Months Ended 5/31/97 (.45:1.0)
Six Months Ended 6/30/97 (.15:1.0)
Seven Months Ended 7/31/97 .05:1.0
Eight Months Ended 8/31/97 .25:1.0
Nine Months Ended 9/30/97 .45:1.0
Ten Months Ended 10/31/97 .60:1.0
Eleven Months Ended 11/30/97 .65:1.0
Twelve Months Ended 12/31/97 .70:1.0
Twelve Months ending on the
last day of each fiscal
month ending thereafter 1.0:1.0
In computing Fixed Charge Coverage for purposes hereof,
(a) Capital Expenditures pursuant to Capital Leases permitted and
Indebtedness paid by Perma-Fix, Inc. in connection with the sale of
its Re-Tech division shall be excluded and (b) insurance proceeds
or any benefit therefrom (if otherwise included) shall be excluded
from net income.
CASH INFUSION Section 2.
_______________________
Lessees shall obtain an infusion of at least Seven Hundred Thousand
Dollars ($700,000) in unrestricted cash on a basis as set forth
below, with an initial infusion of at least One
Hundred Fifty Thousand Dollars ($150,000) to be obtained on or prior
to June 15, 1997 and the balance to be obtained on or prior to
August 15, 1997. Such cash may consist of insurance proceeds with
regard to the accident at Lessees' Memphis, Tennessee facility and
the vandalism at Lessees' Fort Lauderdale, Florida facility,
proceeds of capital contributions, proceeds of stock or other
securities offerings, other proceeds obtained in a manner approved
by Xxxxxx Financial, Inc. in writing or some combination of the foregoing.
On June 15, 1997 and August 15, 1997, Parent shall report to Lessor in
writing as to Lessees' compliance (or failure to comply) with the
foregoing covenant.
PROJECTIONS Section 3.
_____________________
As soon as available and in any event no later than July 31 of each
Fiscal Year, Parent will deliver consolidated and consolidating
Projections of Parent and its Subsidiaries for the forthcoming
Fiscal Year, month-by-month.
WAIVER OF EXISTING EVENTS OF DEFAULT Section 4.
______________________________________________
Lessor hereby waives the Existing Events of Default; provided,
however, that (i) such waivers and the amendments set forth in
Section 1 hereof shall become void and of no further force or effect
if (a) Parent's audited financial statements for its 1996 Fiscal
Year evidence that Lessees' Fixed Charge Coverage for such Fiscal
Year was less than .26:1.0 or that Lessees made Capital Expenditures
in excess of $2,166,000 (calculated by including the principal
portion of payments made during such period under or with respect
to Capital Leases) for such Fiscal Year, (b) such financial
statements differ in any material adverse respect from the draft
thereof provided to Lessor, or (c) Lessees fail to deliver such
audited financial statements to Lessor on or prior to April 16,
1997, accompanied by the unqualified opinion of Parent's accountants
and (ii) such waivers shall not be, or be deemed to be, waivers of
any other Defaults or Events of Default which may presently or
hereafter exist, or (d) any payment defaults now exist or remain
uncured for any period in excess of ten (10) days.
CONDITIONS PRECEDENT Section 5.
______________________________
The amendments and waivers set forth herein shall not become
effective unless and until each of the following conditions shall
have been satisfied, as determined by Lessor in its sole discretion:
(a) The Lease Parties party thereto and Xxxxxx Financial, Inc.
shall have entered into an amendment to the Xxxxxx Loan Agreement,
in form and substance as previously provided to Lessor, pursuant to which
all violations of the financial covenants set forth therein shall be
waived and all such covenants applicable to future periods which
correspond to the financial covenants amended hereby shall be
amended so that such covenants are no more restrictive than the
covenants set forth herein, as determined by Lessor in its sole
discretion.
(b) Each of the Lease Parties shall have executed and
delivered in favor of Lessor such additional Lease Documents and
amendments to existing Loan Documents as Lesser shall deem to be
necessary or appropriate in connection herewith.
(c) After giving effect to the waivers set forth in
Section D hereof, no Default or Event of Default shall have
occurred and be continuing.
(d) In consideration of the accommodations by Lessor to
the Lease Parties contemplated hereby the Lease Parties shall have
paid to Lessor a fee of $5,000, which fee shall be fully-earned on
the date hereof and non-refundable, and shall be in addition to, and
not in lieu of, all fees, interest and expenses payable by the Loan
Parties under the Equipment Lease Agreement.
(e) Since December 31, 1996, there shall have occurred
no material adverse change in the business, operations, financial
conditions, profits or prospect of any Lease Party or in the
Collateral, except for the explosion at Lessees' Memphis, Tennessee
facility.
(f) Lessees shall have delivered to Lessor a draft of
Parent's consolidated audited financial statements for its 1996
Fiscal Year and the same shall be satisfactory to Lessor in all
respects.
EXHIBIT A
EXISTING EVENTS OF DEFAULT
1. Event of Default under Section 2 of Rider No. 2 of the Equipment
Lease Agreement as a result of Parent's failure to deliver an
accountant's report as to its and its Subsidiaries' financial
statements for the fiscal year ending December 31, 1996 on or
prior to March 31, 1997.
2. Events of Default under Section 1 of Rider No. 2 of the Equipment
Lease Agreement as a result of Parent's failure to comply with
the financial covenants set forth in Sections 1.3 (Capital
Expenditures) and 1.4 (Fixed Charge Coverage) of the Equipment
Leae Agreement for its Fiscal Year ending December 31, 1996 and
its failure to comply with the financial covenant set forth in
Section 1 of the Equipment Lease Agreement for the months of
January, 1997 and February, 1997.
ISTE:\N-P\PESI\10K\1996\EXHIBIT4.14
