AGREEMENT AND PLAN OF MERGER
among
PERMA-FIX ENVIRONMENTAL SERVICES, INC.,
FLORIDA PERMA-CHEM, INC.,
GEORGIA PERMA-CHEM, INC.,
CHEMICAL CONSERVATION CORPORATION,
CHEMICAL CONSERVATION OF GEORGIA, 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
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Page
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ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .3
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . .3
1.2 "Chem-Con Common Stock" . . . . . . . . . . . . . . . .3
1.3 "Chem-Con Intellectual Property Right" . . . . . . . .3
1.4 "Chem-Met " . . . . . . . . . . . . . . . . . . . . . .3
1.5 "Chem-Met Agreement " . . . . . . . . . . . . . . . . .3
1.6 "Chem-Met Merger" . . . . . . . . . . . . . . . . . . .3
1.7 "Closing" . . . . . . . . . . . . . . . . . . . . . . .3
1.8 "Closing Date". . . . . . . . . . . . . . . . . . . . .3
1.9 "Code". . . . . . . . . . . . . . . . . . . . . . . . .3
1.10 "Effective Time". . . . . . . . . . . . . . . . . . . .3
1.11 "Environmental Laws". . . . . . . . . . . . . . . . . .3
1.12 "Employment Agreement". . . . . . . . . . . . . . . . .4
1.13 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . .4
1.14 "GAAP". . . . . . . . . . . . . . . . . . . . . . . . .4
1.15 "Governmental Authority". . . . . . . . . . . . . . . .4
1.16 "Laws". . . . . . . . . . . . . . . . . . . . . . . . .4
1.17 "Liens" . . . . . . . . . . . . . . . . . . . . . . . .4
1.18 "Mergers" . . . . . . . . . . . . . . . . . . . . . . .4
1.19 "Mineral Rights". . . . . . . . . . . . . . . . . . . .4
1.20 "Permitted Encumbrances". . . . . . . . . . . . . . . .4
1.21 "Perma-Fix Common Stock". . . . . . . . . . . . . . . .4
1.22 "Perma-Met" . . . . . . . . . . . . . . . . . . . . . .5
1.23 "Quanta". . . . . . . . . . . . . . . . . . . . . . . .5
1.24 "Real Property" . . . . . . . . . . . . . . . . . . . .5
1.25 "Returns" . . . . . . . . . . . . . . . . . . . . . . .5
1.26 "Securities Act". . . . . . . . . . . . . . . . . . . .5
1.27 "SEC" . . . . . . . . . . . . . . . . . . . . . . . . .5
1.28 "Shares". . . . . . . . . . . . . . . . . . . . . . . .5
1.29 "Subsidiaries". . . . . . . . . . . . . . . . . . . . .5
1.30 "Surviving Corporations". . . . . . . . . . . . . . . .5
1.31 "Taxes" . . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 2 THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 The Mergers. . . . . . . . . . . . . . . . . . . . . .5
2.1.1 Merger of Chemical Florida with and into
Florida Perma-Chem.. . . . . . . . . . . . . . .5
2.1.2 Merger of Chemical Georgia with and into
Georgia Perma-Chem.. . . . . . . . . . . . . . .6
2.2 Effective Time of the Mergers . . . . . . . . . . . . .6
2.3 Closing . . . . . . . . . . . . . . . . . . . . . . . .6
2.4 Effects of the Mergers. . . . . . . . . . . . . . . . .6
2.4.1 Chemical Florida . . . . . . . . . . . . . . . .6
2.4.2 Chemical Georgia . . . . . . . . . . . . . . . .7
2.5 ALS Trust/TPS Trust Nominee on Perma-Fix's Board of
Directors . . . . . . . . . . . . . . . . . . . . . . .7
2.5.1 ALS Trust/TPS Trust Nominee to Perma-Fix Board
of Directors . . . . . . . . . . . . . . . . . .7
2.5.2 Information Regarding Xxxxxxxx Nominees. . . . .8
ARTICLE 3 CONVERSION OF SECURITIES. . . . . . . . . . . . . . . . . .8
3.1 Conversion of Capital Stock . . . . . . . . . . . . . .8
3.1.1 Capital Stock of Perma-Fix . . . . . . . . . . .9
3.1.2 Capital Stock of Florida Perma Chem. . . . . . .9
3.1.3 Capital Stock of Georgia Perma-Chem. . . . . . .9
3.1.4 Chem-Con Capital Stock . . . . . . . . . . . . .9
3.1.5 Chem-Con Treasury Stock. . . . . . . . . . . . .9
3.2 Dissenters Rights . . . . . . . . . . . . . . . . . . .9
3.3 Exchange of Certificates. . . . . . . . . . . . . . . 10
3.3.1 Exchange. . . . . . . . . . . . . . . . . . . .10
3.3.2 Exchange Procedures . . . . . . . . . . . . . .10
3.3.3 No Further Ownership Rights in Chem-Con Common
Stock . . . . . . . . . . . . . . . . . . . . .10
3.3.4 No Fractional Shares. . . . . . . . . . . . . .10
3.3.5 No Liability. . . . . . . . . . . . . . . . . .11
3.3.6 Lost Certificates . . . . . . . . . . . . . . .11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE ALS TRUST,
THE TPS TRUST, ALS, TPS AND CHEM-CON. . . . . . . . . . . 11
4.1 Organization of the Xxxxxxxx Trusts . . . . . . . . . 11
4.2 Organization of Chem-Con. . . . . . . . . . . . . . . 11
4.3 Capital Stock of Chem-Con . . . . . . . . . . . . . . 12
4.4 Ownership Interests in Securities . . . . . . . . . . 12
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4.5 Financials. . . . . . . . . . . . . . . . . . . . . . 12
4.5.1 Financial Statements . . . . . . . . . . . . . 13
4.5.2 Liabilities. . . . . . . . . . . . . . . . . . 13
4.5.3 Net Worth. . . . . . . . . . . . . . . . . . . 13
4.5.4 Transactions Since September 30, 1998. . . . . 13
4.6 Tax and Other Returns, Reports and Pooling of
Interest. . . . . . . . . . . . . . . . . . . . . . . 14
4.6.1 Tax Returns. . . . . . . . . . . . . . . . . . 14
4.6.2 Payment of Taxes. . . . . . . . . . . . . . . .14
4.6.3 Waiver of Statute of Limitations. . . . . . . .14
4.6.4 Tax Deficiencies. . . . . . . . . . . . . . . .15
4.6.5 Pooling of Interests. . . . . . . . . . . . . .15
4.7 Property. . . . . . . . . . . . . . . . . . . . . . . 15
4.7.1 Assets. . . . . . . . . . . . . . . . . . . . .15
4.7.2 Real Property . . . . . . . . . . . . . . . . .15
4.7.3 Leases. . . . . . . . . . . . . . . . . . . . .15
4.7.4 Notice. . . . . . . . . . . . . . . . . . . . .16
4.7.5 Personal Property . . . . . . . . . . . . . . .16
4.7.6 Notice from Insurance Carrier . . . . . . . . .16
4.8 Intellectual Property . . . . . . . . . . . . . . . . 16
4.8.1 Ownership . . . . . . . . . . . . . . . . . . .16
4.8.2 No Breach of License. . . . . . . . . . . . . .17
4.8.3 Year 2000 Issues. . . . . . . . . . . . . . . .17
4.9 Agreements, Contracts and Commitments . . . . . . . . 18
4.9.1 Contracts . . . . . . . . . . . . . . . . . . .18
4.9.2 Written List. . . . . . . . . . . . . . . . . .20
4.10 No Breach of Statute or Contract; Governmental
Authorizations . . . . . . . . . . . . . . . . . . . .21
4.10.1 No Violation. . . . . . . . . . . . . . . . . .21
4.10.2 Permits and Licenses. . . . . . . . . . . . . .22
4.10.3 Reports . . . . . . . . . . . . . . . . . . . .22
4.10.4 Violation of Law and Contamination of
Real Property . . . . . . . . . . . . . . . . .22
4.10.5 Permits under Environmental Laws. . . . . . . .22
4.10.6 Other Permits . . . . . . . . . . . . . . . . .23
4.11 No Litigation or Adverse Effects. . . . . . . . . . . 23
4.12 Authorization, Execution and Delivery of Agreement. . 24
4.13 Ability to Conduct the Business . . . . . . . . . . . 24
4.14 Disclosure. . . . . . . . . . . . . . . . . . . . . . 24
4.15 Broker's or Finder's Fee. . . . . . . . . . . . . . . 25
4.16 Insurance . . . . . . . . . . . . . . . . . . . . . . 25
4.17 Completeness of Documents -- Chem-Con and CCC . . . . 25
4.18 Completeness of Documents -- Xxxxxxxx Trusts. . . . . 25
4.19 Disposition of Assets . . . . . . . . . . . . . . . . 25
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4.20 Obligations to Employees. . . . . . . . . . . . . . . 26
4.21 Condition of Plant, Machinery and Equipment . . . . . 27
4.22 Books of Account. . . . . . . . . . . . . . . . . . . 28
4.23 Stock Redemptions . . . . . . . . . . . . . . . . . . 28
4.24 Minute Books. . . . . . . . . . . . . . . . . . . . . 28
4.25 Indebtedness of Shareholders, etc . . . . . . . . . . 28
4.26 Business Prospects. . . . . . . . . . . . . . . . . . 28
4.27 Bank Accounts; Powers of Attorney . . . . . . . . . . 28
4.28 Sensitive Payments. . . . . . . . . . . . . . . . . . 28
ARTICLE 5 ADDITIONAL REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE SULLIVANS AND THE XXXXXXXX TRUSTS. . . . 29
5.1 Affiliate Status. . . . . . . . . . . . . . . . . . . 29
5.2 Rule 145. . . . . . . . . . . . . . . . . . . . . . . 29
5.3 Legend. . . . . . . . . . . . . . . . . . . . . . . . 29
5.4 Restrictions on Certain Actions . . . . . . . . . . . 30
5.4.1 Prohibition Against Acquisition . . . . . . . .30
5.4.2 Prohibition Against Solicitation. . . . . . . .30
5.4.3 Prohibition Against Control . . . . . . . . . .31
5.5 Attendance. . . . . . . . . . . . . . . . . . . . . . 31
5.6 Specific Enforcement. . . . . . . . . . . . . . . . . 31
ARTICLE 6 NO SOLICITATION OF TRANSACTIONS . . . . . . . . . . . . . 31
6.1 No Solicitation of Transactions . . . . . . . . . . . 31
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PERMA-FIX . . . . . . . 32
7.1 Organization, etc . . . . . . . . . . . . . . . . . . 32
7.2 Authorization, Execution and Delivery of Agreement. . 33
7.3 Capital Stock of Perma-Fix. . . . . . . . . . . . . . 33
7.4 SEC Filings . . . . . . . . . . . . . . . . . . . . . 33
7.4.1. . . . . . . . . . . . . . . . . . . . . . . . .33
7.4.2 Material Adverse Change . . . . . . . . . . . .34
7.5 Status of Perma-Fix Common Stock . . . . . . . . . . .34
7.6 No Breach of Statute or Contract, Governmental
Authorizations . . . . . . . . . . . . . . . . . . . .34
7.7 No Litigation or Adverse Events. . . . . . . . . . . .35
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7.8 Broker's or Finder's Fees . . . . . . . . . . . . . . 35
ARTICLE 8 COVENANTS OF CONDUCT AND TRANSACTIONS
PRIOR TO AND AFTER THE CLOSING. . . . . . . . . . . . . . 35
8.1 Investigations; Operation of Business of Chem-Con . . 35
8.1.1 Access to Premises and Books. . . . . . . . . .35
8.1.2 Business Organization of Chem-Con . . . . . . .36
8.1.3 Ordinary Course of Business . . . . . . . . . .36
8.1.4 Sale of Assets. . . . . . . . . . . . . . . . .38
8.2 No Selling of Shares or Granting of Options . . . . . 39
8.3 Consents. . . . . . . . . . . . . . . . . . . . . . . 39
8.4 Governmental Reports. . . . . . . . . . . . . . . . . 39
8.5 Conduct of Business . . . . . . . . . . . . . . . . . 39
8.6 Governmental Approvals. . . . . . . . . . . . . . . . 39
8.7 Encumber. . . . . . . . . . . . . . . . . . . . . . . 40
8.8 Title Policies for Real Property Owned by
Chemical Florida. . . . . . . . . . . . . . . . . . . 40
8.9 Title Policies for Real Properties owned by
Chemical Georgia. . . . . . . . . . . . . . . . . . . 40
8.10 Real Property Located in Orlando, Florida . . . . . . 40
8.11 Survey. . . . . . . . . . . . . . . . . . . . . . . . 41
8.12 Public Announcements. . . . . . . . . . . . . . . . . 41
8.13 Notification. . . . . . . . . . . . . . . . . . . . . 41
8.14 Filings . . . . . . . . . . . . . . . . . . . . . . . 42
8.15 Supplemental Disclosure . . . . . . . . . . . . . . . 42
8.16 SEC Filings . . . . . . . . . . . . . . . . . . . . . 42
8.17 Listing of Perma-Fix Common Stock . . . . . . . . . . 42
8.18 Perma-Fix Registration Statement, etc.. . . . . . . . 42
8.19 Information for Proxy Statements. . . . . . . . . . . 43
8.20 Registration Statement; Proxy Statement/
Prospectus. . . . . . . . . . . . . . . . . . . . . . 43
8.21 Disclosure in Proxy Statement.. . . . . . . . . . . . 44
8.22 Audited Financial Statements. . . . . . . . . . . . . 44
8.23 Public Disclosure . . . . . . . . . . . . . . . . . . 45
8.24 Pooling Accounting. . . . . . . . . . . . . . . . . . 45
8.25 Letter of Public Accountants. . . . . . . . . . . . . 45
8.26 Assumption of Liabilities . . . . . . . . . . . . . . 46
8.27 Liability to Broker . . . . . . . . . . . . . . . . . 46
8.28 Access to Premises and Books. . . . . . . . . . . . . 47
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ARTICLE 9 CONDITIONS OF TRANSACTIONS CONTEMPLATED BY
AGREEMENT; ABANDONMENT OF AGREEMENT . . . . . . . . . . . 47
9.1 Closing Conditions of Perma-Fix, Florida Perma-Chem and
Georgia Perma-Chem. . . . . . . . . . . . . . . . . . 47
9.1.1 Resolutions of Board of Directors and
Shareholders of Chem-Con . . . . . . . . . . . 47
9.1.2 Delivery of Trust Documents. . . . . . . . . . 48
9.1.3 Approval by Lender. . . . . . . . . . . . . . .48
9.1.4 Representations and Warranties of
the Sullivans and the Xxxxxxxx Trusts
to be True and Correct and Compliance With
Covenants. . . . . . . . . . . . . . . . . . . 48
9.1.5 Representations and Warranties of Chem-Con
to be True and Compliance With Covenants . . . 48
9.1.6 Third Party Consents. . . . . . . . . . . . . .49
9.1.7 No Material Adverse Change. . . . . . . . . . .49
9.1.8 Statutory Requirements; Litigation. . . . . . .49
9.1.9 Opinion of Counsel of Chem-Con, the
Sullivans and the Xxxxxxxx Trusts . . . . . . .50
9.1.10 Effective Registration Statement. . . . . . . .50
9.1.11 Due Diligence . . . . . . . . . . . . . . . . .50
9.1.12 Environmental Audit . . . . . . . . . . . . . .50
9.1.13 Stock Certificates. . . . . . . . . . . . . . .50
9.1.14 Permits . . . . . . . . . . . . . . . . . . . .51
9.1.15 No Liens on Assets. . . . . . . . . . . . . . .51
9.1.16 Listing of Perma-Fix Common Stock . . . . . . .51
9.1.17 Minute Books and Stock Ledgers. . . . . . . . .51
9.1.18 Financial Statements. . . . . . . . . . . . . .51
9.1.19 Orlando Real Estate . . . . . . . . . . . . . .51
9.1.20 Title Policies and Surveys. . . . . . . . . . .52
9.1.21 Good Standing Certificates. . . . . . . . . . .52
9.1.22 Resignation of Directors. . . . . . . . . . . .52
9.1.23 Chem-Met Agreement. . . . . . . . . . . . . . .52
9.1.24 Valdosta Remediation. . . . . . . . . . . . . .52
9.1.25 Pooling Letters.. . . . . . . . . . . . . . . .52
9.1.26 Shareholder Approval. . . . . . . . . . . . . .52
9.1.27 Shareholder Approval. . . . . . . . . . . . . .52
9.1.28 Accountants Letters . . . . . . . . . . . . . .53
9.1.29 Employment Agreement. . . . . . . . . . . . . .53
9.1.30 Officer and Director Waiver . . . . . . . . . .53
9.1.31 Fairness Opinion. . . . . . . . . . . . . . . .53
9.1.32 Closing Price of Perma-Fix Common Stock . . . .53
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9.2 Conditions to Obligations of Chem-Con and The
ALS Trust . . . . . . . . . . . . . . . . . . . . . . 53
9.2.1 Resolutions of Perma-Fix Board of
Directors and Shareholders . . . . . . . . . . . 53
9.2.2 Resolutions of Florida Perma-Chem and
Georgia Perma-Chem Board of Directors
and Shareholders. . . . . . . . . . . . . . . 54
9.2.3 Representations and Warranties of Perma-
Fix to be True . . . . . . . . . . . . . . . . . 54
9.2.4 Employment Agreement . . . . . . . . . . . . . . 54
9.2.5 Effective Registration Statement . . . . . . . . 54
9.2.6 No Material Adverse Change . . . . . . . . . . . 54
9.2.7 Litigation . . . . . . . . . . . . . . . . . . . 55
9.2.8 Opinion of Counsel of Perma-Fix. . . . . . . . . 55
9.2.9 Closing Price of Perma-Fix Closing Stock . . . . 55
9.3 Termination of Agreement and Abandonment of
Mergers . . . . . . . . . . . . . . . . . . . . . . . . 55
9.3.1 Conditions of the Sullivans, the
Xxxxxxxx Trusts or Chem-Con Not Met. . . . . . . 55
9.3.2 Conditions of Perma-Fix Not Met. . . . . . . . . 55
9.3.3 Termination by Perma-Fix or the Sullivans
of the Chem-Met Agreement. . . . . . . . . . . . 56
9.3.4 Mutual Consent . . . . . . . . . . . . . . . . . 56
9.4 Expenses. . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 10 TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS. . . . 56
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . 56
10.2 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 11 INDEMNIFICATION AND SURVIVAL OF REPRESENTATIONS
AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 57
11.1 Indemnification by the Sullivans and the Xxxxxxxx
Trusts . . . . . . . . . . . . . . . . . . . . . . . . .57
11.2 Notice of Claim. . . . . . . . . . . . . . . . . . . . .57
11.3 Survival of Representations and Remedies . . . . . . . .57
11.4 Indemnification Period . . . . . . . . . . . . . . . . .58
11.5 Settlement of Indemnification Claims . . . . . . . . . .58
ARTICLE 12 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . .58
12.1 Entire Agreement and Amendment . . . . . . . . . . . . .58
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12.2 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . .58
12.3 Governing Law . . . . . . . . . . . . . . . . . . . . 58
12.4 Benefit of Parties; Assignment. . . . . . . . . . . . 59
12.5 Pronouns. . . . . . . . . . . . . . . . . . . . . . . 59
12.6 Headings. . . . . . . . . . . . . . . . . . . . . . . 59
12.7 Notices . . . . . . . . . . . . . . . . . . . . . . . 59
12.8 Time. . . . . . . . . . . . . . . . . . . . . . . . . 60
12.9 Severability. . . . . . . . . . . . . . . . . . . . . 60
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . 60
Schedule "A" - List of all jurisdictions in which Chem-Con is
authorized to do business
Schedule "B" - List of all of Chem-Con's ownership interests
in other business enterprises
Schedule "C" - Liabilities
Schedule "D" - List of all transactions of Chem-Con since
September 30, 1998
Schedule "E" - Tax Returns; Payment of Taxes; Waiver of
Statute of Limitations; Tax Deficiencies
Schedule "F" - List of all Permitted Encumbrances and Liens
on Chem-Con assets; Real Property owned by
Chem-Con; title insurance policies; leases;
Chem-Con personal property; notices of
violations
Schedule "G" - List of all contracts
Schedule "H" - List of contracts, leases, and agreements
re Chem-Con business (copies)
Schedule "I" - Permits and licenses and reports since
December 31, 1990
Schedule "J" - Litigation
Schedule "K" - List of all trade names, trademarks, service
marks, patents, copyrights and applications
Schedule "L" - Insurance
Schedule "M" - Disposition of Assets
Schedule "N" - Determination letters on benefit plans
Schedule "O" - Condition of plant, machinery and equipment
Schedule "P" - Indebtedness of Shareholders
Schedule "Q" - Bank accounts/borrowing resolutions of Chem-
Con; Powers of Attorney
Schedule "R" - Description of Quanta Tract
Schedule "S" - Year 2000 Information
Exhibit "A" - Employment Agreement with Xxxxxx X. Xxxxxxxx
Exhibit "B" - Permitted Encumbrances
Exhibit "C" - Florida Articles of Merger
Exhibit "D" - Georgia Certificate of Merger
Exhibit "E" - Opinion of Counsel of Chem-Con
Exhibit "F" - Opinion of Counsel of Perma-Fix
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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"); FLORIDA
PERMA-CHEM, INC. a Florida corporation and a wholly-owned
subsidiary of Perma-Fix ("Florida Perma-Chem"); GEORGIA PERMA-CHEM,
INC., a Georgia corporation and a wholly-owned subsidiary of Perma-
Fix ("Georgia Perma-Chem"); CHEMICAL CONSERVATION CORPORATION; a
Florida corporation ("Chemical Florida"); CHEMICAL CONSERVATION OF
GEORGIA, INC., a Georgia corporation ("Chemical Georgia"); 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,";
TPS and ALS are collectively referred to as the "Sullivans";
Chemical Florida and Chemical Georgia are referred to herein as
"Chem-Con," and Florida Perma-Chem and Georgia Perma-Chem are
referred to herein as "Perma-Chem."
W I T N E S S E T H:
WHEREAS, the ALS Trust is the sole and exclusive owner
of all of the issued and outstanding capital stock of Chemical
Florida and Chemical Georgia (collectively the "Chem-Con Common
Stock");
WHEREAS, ALS is the sole trustee and primary
beneficiary of the ALS Trust;
WHEREAS, TPS is the sole trustee and primary
beneficiary of the TPS Trust;
WHEREAS, the Sullivans are husband and wife;
WHEREAS, Florida Perma-Chem and Georgia Perma-Chem are,
directly or indirectly, wholly owned subsidiaries of Perma-Fix;
WHEREAS, the Board of Directors of Perma-Fix, Florida
Perma-Chem and Chemical Florida deem it advisable and in the best
interest of each corporation and its respective stockholders that
Chemical Florida merge with and into Florida Perma-Chem, with
Florida Perma-Chem being the survivor, in order to advance the
long-term business interest of each corporation;
WHEREAS, the Board of Directors of Perma-Fix, Georgia
Perma-Chem and Chemical Xxxxxxx xxxx it advisable and in the best
interests of each corporation and its respective stockholders that
Chemical Georgia merge with and into Georgia Perma-Chem, with
Georgia Perma-Chem being the survivor, in order to advance the
long-term business interest of each corporation;
WHEREAS, Chem-Con Corporation, a Florida corporation
("CCC") is a wholly owned subsidiary of Chemical Florida;
WHEREAS, the parties hereto desire that Chemical
Florida shall be merged with and into Florida Perma-Chem, with
Florida Perma-Chem being the survivor, (said transaction being
hereinafter referred to as the " Florida Merger") pursuant to a
plan of merger (the "Florida Plan of Merger") in which the
stockholder of Chemical Florida 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, the parties hereto desire that Chemical
Georgia shall be merged with and into Georgia Perma-Chem, with
Georgia Perma-Chem being the survivor, (said transaction being
hereinafter referred to as the "Georgia Merger") pursuant to a plan
of merger (the "Georgia Plan of Merger") in which the stockholder
of Chemical Georgia 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;
WHEREAS, the Florida Merger and the Georgia Merger are
collectively referred to herein as the "Mergers";
WHEREAS, for Federal income tax purposes, it is
intended that the Mergers 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 Mergers shall be accounted for as a pooling of interests;
WHEREAS, the Board of Directors of Perma-Fix, Florida
Perma-Chem and Chemical Florida have approved and adopted the
Florida Merger, this Agreement and the Florida Plan of Merger; and
WHEREAS, the Board of Directors of Perma-Fix, Georgia
Perma-Chem and Chemical Georgia have approved and adopted the
Georgia Merger, this Agreement and the Georgia Plan of Merger.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants, agreements, representations and warranties
herein contained, the parties hereto agree as follows:
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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 Common Stock" has the meaning as specified in
Section 4.3 hereof.
1.3 "Chem-Con Intellectual Property Right" has the meaning as
defined in Section 4.8.1 of this Agreement.
1.4 "Chem-Met " shall mean Chem-Met Services, Inc. a Michigan
corporation.
1.5 "Chem-Met Agreement " shall mean that certain Agreement and
Plan of Merger among Perma-Fix, Perma-Met (as defined below),
Chem-Met, the Xxxxxxxx Trusts and the Sullivans, dated as of
the date of this Agreement, whereby Chem-Met is to merge with
and into Perma-Met, a wholly owned subsidiary of Perma-Fix,
with Perma-Met being the survivor.
1.6 "Chem-Met Merger" shall mean the merger of Chem-Met with and
into Perma-Met (as defined below), with Perma-Met being the
survivor, pursuant to the Chem-Met Agreement.
1.7 "Closing" has the meaning as specified in Section 2.3 hereof.
1.8 "Closing Date" has the meaning as specified in Section 2.3
hereof.
1.9 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Effective Time" shall have the meaning set forth in Section
2.2 hereof.
1.11 "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
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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.
1.12 "Employment Agreement" shall have the meaning set forth in
Section 9.2.4 hereof, a copy of which is attached hereto as
Exhibit "A".
1.13 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated
thereunder.
1.14 "GAAP" means United States generally accepted accounting prin-
ciples.
1.15 "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.
1.16 "Laws" mean any and all federal, state and local laws, rules,
regulations, codes, orders, ordinances, judgments, injunctions
and decrees.
1.17 "Liens" mean all security interests, liens, mortgages, claims,
charges, pledges, restrictions, equitable interests,
easements, property rights or encumbrances of any nature.
1.18 "Mergers" has the meaning as defined in the eleventh WHEREAS
clause of this Agreement.
1.19 "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.
1.20 "Permitted Encumbrances" means (i) liens listed on Exhibit "B"
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.
1.21 "Perma-Fix Common Stock" means the Common Stock, par value
$.001 per share, of Perma-Fix.
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1.22 "Perma-Met" shall mean Perma-Met, Inc., a Michigan corporation
and a wholly owned subsidiary of Perma-Fix.
1.23 "Quanta" means Quanta Corporation, a Michigan corporation in
which all of its issued and outstanding capital stock is owned
by the ALS Trust.
1.24 "Real Property" means all real property, land, buildings,
improvements and structures owned, leased or used by Chem-Con.
1.25 "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.
1.26 "Securities Act" means the Securities Act of 1933, as amended.
1.27 "SEC" means the U.S. Securities and Exchange Commission.
1.28 "Shares" means all of the issued and outstanding shares of
capital stock of Chemical Florida and Chemical Georgia of
whatsoever character and description.
1.29 "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.
1.30 "Surviving Corporations" has the meaning as defined in Section
2.4.2 of this Agreement.
1.31 "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.
ARTICLE 2
THE MERGER
2.1 The Mergers.
2.1.1 Merger of Chemical Florida with and into Florida Perma-
Chem. Subject to the terms of this Agreement, Chemical
Florida shall merge with and into Florida Perma-Chem,
with Florida Perma-Chem being the surviving
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corporation, in accordance with the applicable
provisions of the Florida Business Corporation Act
("FBCA") and the terms of this Agreement. Chemical
Florida and Florida Perma-Chem agree to the Florida
Merger.
2.1.2 Merger of Chemical Georgia with and into Georgia Perma-
Chem. Subject to the terms of this Agreement, Chemical
Georgia shall merge with and into Georgia Perma-Chem,
with Georgia Perma-Chem being the surviving
corporation, in accordance with the applicable
provisions of the Georgia Business Corporation Code
("GBCC") and the terms of this Agreement. Chemical
Georgia and Georgia Perma-Chem agree to the Georgia
Merger.
2.2 Effective Time of the Mergers. Subject to the provisions of
this Agreement, at the Closing (as defined below) (i) the
Articles of Merger regarding the Florida Merger, a copy of
which is attached hereto as Exhibit "C" (the "Florida Articles
of Merger"), shall be duly executed and acknowledged by
Chemical Florida and Florida Perma-Chem and delivered to and
filed with the Secretary of State of Florida, as provided in the
FBCA, on the Closing Date, and (ii) the Certificate of Merger
regarding the Georgia Merger, a copy of which is attached
hereto as Exhibit "D" ("Georgia Certficiate of Merger"), shall
be duly executed and acknowledged by Chemical Georgia and
Georgia Perma-Chem, and delivered to and filed with the
Secretary of State of Georgia, as provided in the GBCC, on the
Closing Date. The Mergers shall become effective upon the
filing of the Florida Articles of Merger and the Georgia
Articles of Merger (collectively, the "Articles of Merger") as
herein described, or at such time thereafter as shall be
provided in the Articles of Merger (the "Effective Time").
2.3 Closing. The closing of the Mergers (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-Con, which shall be no later than five business days
after approval of the Mergers and the Chem-Met Merger by the
shareholders of Perma-Fix entitled to vote thereon (the
"Closing Date"), at the offices of Chemical Conservation
Corporation, 00000 Xxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxx, 00000,
unless another date, place or time is agreed to in writing by
Perma-Fix and Chem-Con.
2.4 Effects of the Mergers. At the Effective Time:
2.4.1 Chemical Florida. Chemical Florida shall be merged with
and into Florida Perma-Chem (Chemical Florida and
Florida Perma-Chem are sometimes referred to below as
the "Florida Constituent Corporations" and Florida
Perma-Chem is sometimes referred to herein as the
"Florida Surviving Corporation"), with Florida Perma-
Chem being the survivor and Chemical Florida ceasing to
exist, (ii) the Articles of Incorporation of Florida
Perma-Chem immediately prior to the Effective Time
shall be the Articles of Incorporation of the Florida
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Surviving Corporation, except that at the Effective
Time Florida Perma-Chem shall change its corporate name
to [Chemical Conservation of Florida, Inc.,] (iii) the
Bylaws of Florida Perma-Chem as in effect immediately
prior to the Effective Time shall be the Bylaws of the
Florida Surviving Corporation, and (iv) the purpose of
the Florida Surviving Corporation shall be as set forth
in Article II of the Articles of Incorporation of
Florida Perma-Chem immediately prior to the Effective
Time.
2.4.2 Chemical Georgia. Chemical Georgia shall be merged
with and into Georgia Perma-Chem (Chemical Georgia and
Georgia Perma-Chem are sometimes referred to below as
the "Georgia Constituent Corporations" and Georgia
Perma-Chem is sometimes referred to herein as the
"Georgia Surviving Corporation"), with Georgia Perma-
Chem being the survivor and Chemical Georgia ceasing to
exist, (ii) the Articles of Incorporation of Georgia
Perma-Chem immediately prior to the Effective Time
shall be the Articles of Incorporation of the Georgia
Surviving Corporation, except that at the Effective
Time Georgia Perma-Chem shall change its name to
Chemical Conservation of Georgia, Inc.,(iii) the Bylaws
of Georgia Perma-Chem as in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving
Corporation, and (iv) the purpose of the Georgia
Surviving Corporation shall be as set forth in Article
II of the Articles of Incorporation of Georgia Perma-
Chem immediately prior to the Effective Time.
"Surviving Corporation" shall refer to the Florida
Surviving Corporation and the Georgia Surviving
Corporation.
2.5 ALS Trust/TPS Trust Nominee on Perma-Fix's Board of Directors.
2.5.1 ALS Trust/TPS Trust Nominee to Perma-Fix Board of
Directors. Subject to, and except as otherwise
provided by, the terms of this Section 2.5.1, after the
Closing Date, and provided that at all times through
the date of Perma-Fix's annual meeting of shareholders
at which the Xxxxxxxx Trusts are entitled to have their
one (1) nominee ("Xxxxxxxx Nominee") elected to Perma-
Fix's Board of Directors under this Section 2.5.1, the
Xxxxxxxx Trusts owns of record, in the aggregate, not
less than 1,500,000 shares of the Perma-Fix Common
Stock that the Xxxxxxxx Trusts acquired under this
Agreement and the Chem-Met Agreement, the Xxxxxxxx
Trusts may select one (1) nominee for nomination to
Perma-Fix's Board of Directors and Perma-Fix agrees to
recommend to the shareholders of Perma-Fix at Perma-
Fix's annual meeting of shareholders the one nominee
selected by the Xxxxxxxx Trusts if such Xxxxxxxx
Nominee is satisfactory to the Board of Directors of
Perma-Fix, along with all other nominees nominated by
the Board of Directors of Perma-Fix, for election to
the Board of Directors of Perma-Fix. Notwithstanding
the above, if at any time and for any reason after the
Closing Date the Xxxxxxxx Trusts' ownership of record
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of Perma-Fix Common Stock acquired under this Agreement
and the Chem-Met Agreement is, in the aggregate, less
than1,500,000 shares of Perma-Fix Common Stock, then
the Xxxxxxxx Trusts shall not be entitled to have a
Xxxxxxxx Nominee elected or recommended by Perma-Fix
for election to the Board of Directors of Perma-Fix.
Nothing contained in this Section 2.5.1 shall obligate
or cause the Board of Directors of Perma-Fix to violate
any of their fiduciary duties. Notwithstanding the
foregoing, from and after the breach or default by any
of the Sullivans and/or the Xxxxxxxx Trusts of any of
their obligations, agreements or covenants contained in
this Agreement or the Chem-Met Agreement or the
Employment Agreement, the Xxxxxxxx Trusts shall have no
further rights under this Section 2.5.1 and no further
right to designate a Xxxxxxxx Nominee and Perma-Fix
shall have no obligation to recommend or otherwise take
affirmative action regarding any nominee of the
Xxxxxxxx Trusts for a position on the Perma-Fix Board
of Directors.
2.5.2 Information Regarding Xxxxxxxx Nominees. During the
period that the Xxxxxxxx Trusts are entitled to have
one nominee elected to the Board of Directors of Perma-
Fix, the Xxxxxxxx Trusts shall provide to the President
of Perma-Fix the name of such nominee or nominees and
a written description of such nominee or nominees
within 120 days prior to the date of the annual meeting
of shareholders at which the Xxxxxxxx Nominee is to be
elected to Perma-Fix's Board of Directors. The written
description of such nominee or nominees must contain
all such information regarding such nominee or nominees
as is required to be disclosed in a Perma-Fix Proxy
Statement relating to the election of directors under
Schedule 14A as promulgated under Section 14(a) of the
Exchange Act (including, but not limited to, informa-
tion required by Item 401 of Regulation S-K). Within
thirty (30) days after receipt by the President of
Perma-Fix of such written information regarding the
Xxxxxxxx Trusts proposed nominee, Perma-Fix shall
advise the Xxxxxxxx Trusts if such nominee is not
acceptable to the Board of Directors of Perma-Fix. If
any such nominee selected by the Xxxxxxxx Trusts is not
acceptable, the Xxxxxxxx Trusts shall, within ten (10)
days from being advised by Perma-Fix that its nominee
is not acceptable to the Board of Directors of Perma-
Fix, supply the name and the required written descrip-
tion concerning the Xxxxxxxx Trusts' new nominee, if
any, with such new nominee to be satisfactory to the
Board of Directors of Perma-Fix.
ARTICLE 3
CONVERSION OF SECURITIES
3.1 Conversion of Capital Stock. As of the Effective Time:
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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 Mergers;
3.1.2 Capital Stock of Florida Perma Chem. Each share of
capital stock of Florida Perma-Chem issued and
outstanding immediately prior to the Effective Time
shall remain issued and be unchanged by the Florida
Merger.
3.1.3 Capital Stock of Georgia Perma-Chem. Each share of
capital stock of Georgia Perma-Chem issued and
outstanding immediately prior to the Effective Time
shall remain issued and be unchanged by the Georgia
Merger.
3.1.4 Chem-Con Capital Stock. Each share of capital stock of
Chemical Florida and each share of capital stock of
Chemical Georgia issued and outstanding immediately
prior to the Effective Time shall, by virtue of the
Mergers, 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-Con Common Stock issued and outstanding
immediately prior to the Effective Time shall by virtue
of the Mergers, 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 $6,500,000 by the 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.
3.1.5 Chem-Con Treasury Stock. All shares of Chem-Con Common
Stock that are owned by Chem-Con 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-Con 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
FBCA or the GBCC.
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3.3 Exchange of Certificates. The procedures for exchanging
outstanding shares of Chem-Con Common Stock for Perma-Fix
Common Stock pursuant to the Mergers are as follows:
3.3.1 Exchange. As of the Effective Time, Perma-Fix shall
deliver to the ALS Trust certificates representing the
shares of Perma-Fix Common Stock ( the "Exchange
Certificates") issuable pursuant to Section 3.1.4 in
exchange for outstanding shares of Chem-Con Common
Stock.
3.3.2 Exchange Procedures. At the Effective Time, the ALS
Trust, being the sole beneficial and record owner of
all of the issued and outstanding shares of capital
stock of Chem-Con, shall surrender to Perma-Fix all
certificates representing all of the issued and
outstanding shares of capital stock of Chem-Con (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 ALS
Trust, being the sole and exclusive holder of any and
all such Certificates shall be entitled to receive in
exchange for all of the shares of Chem-Con 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
3.1.4 hereof, and the Certificates so surrendered shall
immediately be canceled. Until surrendered as
contemplated by this Section 3.3.2, the Certificates
representing shares of Chem-Con 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 this Section 3.1.4.
3.3.3 No Further Ownership Rights in Chem-Con 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-Con 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-Con
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.
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3.3.5 No Liability. Neither Perma-Fix nor Chem-Con shall be
liable to any holder of shares of Chem-Con 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 either of the Surviving Corporations, 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-CON
The ALS Trust, the TPS Trust, ALS, TPS, Chemical
Florida and Chemical Georgia, jointly and severally, represent and
warrant to Perma-Fix, Florida Perma-Chem and Georgia Perma-Chem
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
Trust, and ALS is the sole trustee under the ALS Trust. TPS
is the primary beneficiary of the TPS Trust, and TPS is the
sole trustee under the TPS Trust. ALS, as sole trustee under
the ALS Trust, and TPS as sole trustee under the TPS Trust,
have full power, authority and capacity to enter into this
Agreement and to perform any and all obligations and covenants
of the ALS Trust and the TPS Trust under this Agreement.
4.2 Organization of Chem-Con. Each of Chemical Florida, Chemical
Georgia and CCC is a corporation duly organized, validly
existing and in good standing under the laws of the respective
jurisdiction of its incorporation, and each has the corporate
power to own its properties and to carry on its business as is
now being conducted. Each of Chemical Florida, Chemical
Georgia and CCC is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the nature
of the business conducted by it or the character of the
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property owned, leased or used by it makes such qualification
necessary. A list of all such jurisdictions, separately shown
and indicated, is set forth on Schedule "A" attached hereto.
4.3 Capital Stock of Chem-Con. The authorized capital stock of
Chemical Florida consists solely of seven thousand five
hundred (7,500) shares of common stock, par value $1.00
("Chemical Florida Common Stock"), of which two hundred (200)
shares are issued and outstanding and all of such issued and
outstanding shares of Chemical Florida Common Stock are owned
of record and beneficially by the ALS Trust. The authorized
capital stock of Chemical Georgia consists solely of one
hundred thousand (100,000) shares of common stock, par value
$1.00 ("Chemical Georgia Common Stock"), of which seventy-five
thousand (75,000) shares are issued and outstanding and all of
such issued and outstanding shares of Chemical Georgia Common
Stock are owned of record and beneficially by the ALS Trust.
The authorized capital stock of CCC consists solely of seven
thousand five hundred (7,500) shares of common stock, par
value $1.00 ("CCC Common Stock"), of which one hundred (100)
shares are issued and outstanding and all of such issued and
outstanding shares of CCC Common Stock are owned of record and
beneficially by Chemical Florida. Collectively, the Chemical
Florida Common Stock, and the Chemical Georgia Common Stock
are referred to herein as the "Chem-Con Common Stock." No
shares of Chem-Con Common Stock or shares of CCC Common Stock
are held in treasury or reserved for issuance at a later date.
All of the issued and outstanding shares of Chem-Con Common
Stock and of CCC Common Stock are (i) validly authorized and
issued, (ii) fully paid and nonassessable and (iii) free and
clear of any and all Liens. Subsequent to September 30, 1998,
Chem-Con has not declared or paid any dividend, or declared or
made any distribution on, or authorized the creation or
issuance of, or issued, or authorized or effected any split-up
or any other recapitalization of, any of its capital stock, or
directly or indirectly redeemed, purchased or otherwise
acquired any of their respective outstanding capital stock or
agreed to take any such action. There are no outstanding
contractual obligations of Chem-Con or CCC to repurchase,
redeem or otherwise acquire any of their respective out-
standing shares of capital stock. There are no outstanding
agreements, options, warrants or rights to subscribe for or
purchase from or otherwise receive from Chem-Con, CCC, or the
ALS Trust or any other party any of Chem-Con's or CCC's
capital stock or other securities of any kind or description
of Chem-Con or CCC.
4.4 Ownership Interests in Securities. Set forth on Schedule "B"
attached hereto is a list of all equity or ownership interests
in, and all bonds and debentures of, other business enter-
prises which Chem-Con 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.
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4.5 Financials.
4.5.1 Financial Statements. Chemical Florida and Chemical
Georgia have previously furnished Perma-Fix a true and
correct copy of the audited financial statements for
Chemical Florida, Chemical Georgia, Chem-Met and their
Subsidiaries, on a combined basis, for the fiscal year
ended September 30, 1998, ("Audited Financial
Statements"), consisting of, among other things, (i) a
balance sheet as of September 30, 1998, and (ii)
statement of income and related earnings for the fiscal
year ended September 30, 1998. The Audited Financial
Statements are true, correct and complete in all
material respects and correctly present the financial
conditions and results of operations of Chemical
Florida, Chemical Georgia, Chem-Met and their
Subsidiaries on a combined basis as of the date
thereof. For the purposes of this Agreement, the
Audited Financial Statements shall be deemed to include
any notes to such financial statements. The Audited
Financial Statements have been prepared in conformity
with GAAP, consistently applied throughout the periods
indicated and on a basis consistent with prior periods.
4.5.2 Liabilities. Except as set forth in Schedule "C"
attached hereto, Chemical Florida, Chemical Georgia and
their Subsidiaries do not have any liabilities or obli-
gations either accrued, absolute, contingent, known or
unknown, matured or unmatured, or otherwise, which have
not been:
4.5.2.1 reflected in the Audited Financial Statements;
or
4.5.2.2 incurred consistent with past practices of
Chem-Con in the ordinary and normal course of
Chem-Con's business since September 30, 1998.
4.5.3 Net Worth. Except as set forth in Schedule "C"
attached hereto, there are no claims against or liabil-
ities or obligations of, or any legal basis for any
claims against or liabilities or obligations of, Chem-
Con or its Subsidiaries which might result in a
material reduction in the net worth of Chem-Con and its
Subsidiaries from that shown in the Audited Financial
Statements or any material charge against net earnings
of Chem-Con and its Subsidiaries.
4.5.4 Transactions Since September 30, 1998. Except as set
forth on Schedule "D", between September 30, 1998, and
the date of this Agreement, Chem-Con and its
Subsidiaries have not engaged in any material
transaction not in the ordinary and normal course of
business and, except as set forth on such Schedule "D",
there has not been, occurred or arisen since September 30,
1998:
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4.5.4.1 any material adverse change in the financial
condition or in the operations of the business
of Chem-Con or its Subsidiaries from that
shown on the Audited Financial Statements; or
4.5.4.2 any damage or destruction in the nature of a
casualty loss, or interference with its
business from such loss or from any labor
dispute or court or governmental action, order
or decree, whether covered by insurance or
not, materially and adversely affecting the
properties or business of Chem-Con or its
Subsidiaries; or
4.5.4.3 any increase, except increases given in
accordance with prior practice, in the com-
pensation payable or to become payable by
Chem-Con or its Subsidiaries to any of Chem-
Con's or its Subsidiaries' employees or any
increase in the benefits, regardless of
amount, in any bonus, insurance, pension or
other plan, program, payment or arrangement
with respect to employee benefits made to, for
or with any officers or employees; or
4.5.4.4 any extraordinary loss (as defined in Opinions
No. 9 and No. 30 of the Accounting Principles
Board of American Institute of Certified
Public Accountants) suffered by Chem-Con or
its Subsidiaries which is material to Chem-Con
or its Subsidiaries, or any waiver by Chem-Con
or its Subsidiaries of any rights which are
material to Chem-Con or its Subsidiaries.
4.6 Tax and Other Returns, Reports and Pooling of Interest.
4.6.1 Tax Returns. All federal, state, local, foreign,
personal property, and real property tax returns
required to be filed by the ALS Trust and Chem-Con and
its Subsidiaries have been timely filed with the
appropriate governmental agencies in all jurisdictions
in which such returns and reports are required to be
filed.
4.6.2 Payment of Taxes. All federal, state, local and
foreign taxes (including interest and penalties), due
from the ALS Trust, Chem-Con and its Subsidiaries (i)
have been fully paid, or (ii) are being contested in
good faith by appropriate proceedings and are disclosed
on Schedule "E" attached hereto.
4.6.3 Waiver of Statute of Limitations. No waivers of
statutes of limitation in respect of any Returns or tax
reports have been given or requested, except as shown
on such Schedule "E".
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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-Con or its Subsidiaries.
4.6.5 Pooling of Interests. To the best of their knowledge,
after consulting with its independent auditors, neither
Chem-Con, the Sullivans, the Xxxxxxxx Trusts nor any of
its 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 Mergers
as a pooling of interests or (ii) prevent the Mergers
from, collectively, 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-Con and its Subsidiaries own and have good
and marketable title in and to all of the assets used
by them in the operation or conduct of their business,
or required by Chem-Con and its Subsidiaries for the
normal and ordinary conduct of their business, free and
clear of any and all Liens, except for Permitted Encum-
brances.
4.7.2 Real Property. Schedule "F" attached hereto lists all
Real Properties owned by Chem-Con and its Subsidiaries.
Chem-Con and its Subsidiaries have good and marketable
title in fee simple to all of the respective Real
Property owned by them, free and clear of any and all
Liens, except for Permitted Encumbrances, and have
access thereto such as is reasonable to permit the
present or presently proposed use of any such
properties. Schedule "F" indicates which of the 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-Con and its Subsidiaries contains no encroach-
ments on abutting property, public or private, and no
material encroachments by others on either of their
properties. Chem-Con and its Subsidiaries, whichever
is applicable, owns all of the Mineral Rights under the
Real Property owned by them.
4.7.3 Leases. Schedule "F" sets forth a true and complete
list of each lease of real or personal property exe-
cuted by or binding upon Chem-Con or its Subsidiaries,
as lessee, sublessee, tenant or assignee setting forth
in each case a brief description of the property
covered by the lease, the rental and the terms
thereunder. Each lease is in full force and effect,
without any default or breach thereof by any party
thereto. No consent of any landlord, lessor or any
other party is required under any such lease to keep
such lease in full force and effect without being term-
inable or in default after the execution and delivery
of this Agreement and consummation of the transactions
contemplated by this Agreement. True and complete
copies of all leases required to be listed on Schedule
"F", including all amendments, addenda, waivers and all
other binding documents, have heretofore been delivered
to Perma-Fix.
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4.7.4 Notice. Except as set forth on Schedule "F", none of
Chem-Con or any of its Subsidiaries, any of the
Xxxxxxxx Trust nor any of the Sullivans has received
actual or constructive notice of any violation of any
zoning, use, occupancy, building, or environmental
statute, ordinance, regulation, order, or other law or
requirement affecting or relating to any activities
performed at any time on any Real Property. None of
the Xxxxxxxx Trusts, the Sullivans, Chem-Con nor any of
the Subsidiaries of Chem-Con has any knowledge of any
past, present, or future events, conditions,
circumstances, activities, incidents, actions, or plans
that may in any way interfere with or limit the
continued use of said Real Property for all present or
presently proposed use of said Real Property.
4.7.5 Personal Property. Chem-Con and its Subsidiaries own
the full right and interest and have good and market-
able title in and to all material personal and intang-
ible property used by Chem-Con and its Subsidiaries in
the conduct of Chem-Con's and its Subsidiaries'
business and none of such personal and intangible
property is subject (i) to any contracts of sale, or
(ii) to any Liens, except for Permitted Encumbrances.
4.7.6 Notice from Insurance Carrier. None of the Sullivans,
the Xxxxxxxx Trusts, Chem-Con nor its Subsidiaries has
received any notice of, or writing referring to, any
requirements or recommendations by any insurance
company which has issued a policy covering any part of
the Real Property requiring or recommending any repairs
or work or other action being taken on any part of the
Real Property, except as otherwise disclosed in
Schedule "F". All utilities required for the operation
of the Real Property in the manner currently operated
by Chem-Con or its Subsidiaries are installed and
operating, and all installation and connection charges
have been paid in full or provided for.
4.8 Intellectual Property.
4.8.1 Ownership. Schedule "K" attached hereto is a true and
complete list of all patents, trademarks, trade names,
service marks, copyrights, web domain addresses, mask
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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-Con or its Subsidiaries is licensed
or otherwise possesses legally enforceable rights to
use and are necessary to conduct the business of Chem-
Con or its Subsidiaries as currently conducted, or
planned to be conducted , the absence of which would be
reasonably likely to have a material adverse effect
upon Chem-Con or its Subsidiaries (the "Chem-Con
Intellectual Property Rights"). None of the Chem-Con
Intellectual Property Rights is subject to any
outstanding order, judgment, decree, stipulation, or
agreement restricting the use of such Chem-Con
Intellectual Property Rights, and to the best of their
knowledge none infringes on, or is being infringed by,
other intellectual property rights of any other person
or entity. Chem-Con and its Subsidiaries have
promulgated and used commercially reasonable efforts to
enforce and maintain any reasonably necessary trade
secret or confidentiality measures regarding the Chem-
Con Intellectual Property Rights. Neither Chem-Con nor
its Subsidiaries has given and are not bound by an
agreement or indemnification regarding Chem-Con
Intellectual Property Rights in connection with any
property or service produced, used or sold by Chem-Con
or its Subsidiaries.
4.8.2 No Breach of License. None of the ALS Trust, Chem-Con
nor its Subsidiaries is, or will as a result of the
execution and delivery of this Agreement or the
performance of their respective obligations under this
Agreement or otherwise be, in breach of any license,
sublicense or other agreement relating to the Chem-Con
Intellectual Property Rights, or any material licenses,
sublicenses and other agreements as to which Chem-Con
or its Subsidiaries is a party and pursuant to which
Chem-Con or its Subsidiaries is authorized to use any
third party patents, trademarks or copyrights ("Chem-
Con Third Party Intellectual Property Rights"),
including software which is used in the manufacture of,
incorporated in, or forms a part of any product sold or
services rendered by or expected to be sold or services
rendered by Chem-Con or its Subsidiaries, the breach of
which would be reasonably likely to have a material
adverse effect upon Chem-Con or its Subsidiaries,
except as disclosed in Schedule "K" hereof.
4.8.3 Year 2000 Issues. Schedule S hereof identifies each
"Year 2000" audit, report or investigation that has
been performed by or on behalf of Chem-Con and its
Subsidiaries with respect to their business and
operations, and Chem-Con has provided to Perma-Fix true
and correct copies of all such audits, reports or
investigations. Except as set forth in such audits,
reports and investigations, neither the Sullivans, the
Xxxxxxxx Trusts nor Chem-Con or its Subsidiaries are
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aware of any failure to be Year 2000 Compliant of (i)
any software products sold or licensed by Chem-Con or
its Subsidiaries to third parties or (ii) any computer
software products used by or licensed to Chem-Con or
its Subsidiaries from third parties for internal use by
Chem-Con or its Subsidiaries. For purposes of this
Agreement, "Year 2000 Compliant" means, with respect to
each software product referred to in the prior
sentence, that such system (i) will accurately receive,
record, store, provide, recognize and process all date
and time data from, during, into and between the
twentieth and twenty-first centuries; (ii) will
accurately perform all date-dependent calculations and
operations (including, without limitation, mathematical
operations, sorting, comparing and reporting) from,
during, into and between the twentieth and twenty-first
centuries; and (iii) will not malfunction, cease to
function or provide invalid or incorrect results as a
result of (x) the change of century, (y) date data,
including date data which represents or references
different centuries or more than one century or (z) the
occurrence of any particular date; in each case without
human intervention, other than original data entry;
provided, in each case, that all applications, hardware
and other systems used in conjunction with such system
which are not owned or licensed by Chem-Con or its
Subsidiaries correctly exchange date data with or
provide data to such system. Neither Chem-Con nor its
Subsidiaries has provided any guarantee or warranty
for any product sold or licensed, or services provided,
by Chem-Con or its Subsidiaries to the effect that such
product or service (i) complies with or accounts for
the fact of the arrival of the year 2000 or (ii) will
not be adversely affected with respect to
functionality, operability, performance or volume
capacity (including without limitation the processing
and reporting of data) by virtue of the arrival of the
year 2000. Chem-Con and its Subsidiaries have
performed audits regarding their primary suppliers,
customers, creditors and financial service
organizations with which they have substantial
interaction ("Outside Persons") and have determined
that all of these Outside Persons are substantially
Year 2000 Compliant to the extent that there will be no
material adverse effects to Chem-Con or its
Subsidiaries resulting from a failure of such Outside
Persons to be Year 2000 Compliant. In addition,
Schedule "S" shall set forth in detail the status of
Chem-Con and its Subsidiaries' efforts to address the
Year 2000 issues involving Chem-Con and its
Subsidiaries and outside persons.
4.9 Agreements, Contracts and Commitments.
4.9.1 Contracts. Except as set forth on Schedule "G",
neither Chem-Con nor its Subsidiaries is a party to or
bound by:
4.9.1.1 any collective bargaining agreements or any
agreements that contain any severance pay
liabilities or obligations;
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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-Con or its Subsidiaries to
any person or entity, including, but not
limited to, any Affiliate, other than
guarantees or indemnifications issued in the
ordinary course of Chem-Con's business
relating solely to the indemnification of
certain of its customers due to Chem-Con's
disposal of waste generated by such customers
at permitted disposal facilities not
affiliated with Chem-Con;
4.9.1.5 any agreement, contract or commitment which
would reasonably be expected to have a
material adverse impact on the business of
Chem-Con or its Subsidiaries;
4.9.1.6 any agreement, indenture or other instrument
which contains restrictions with respect to
payment of dividends or any other distribution
in respect of Chem-Con or its Subsidiaries or
any other outstanding securities of Chem-Con
or its Subsidiaries;
4.9.1.7 any agreement, contract or commitment con-
taining any covenant limiting the freedom of
Chem-Con or its Subsidiaries to engage in any
line of business or compete with any person;
4.9.1.8 any agreement, contract or commitment relating
to capital expenditures in excess of ten
thousand dollars ($10,000.00) and involving
future payments;
4.9.1.9 any agreement, contract or commitment relating
to the acquisition of assets or capital stock
of any business enterprise;
4.9.1.10 any contract with the Department of Defense or
any other department or agency of the United States
Government, or to any subcontract under any such
contract, which is subject to renegotiation under
the Renegotiation Act of 1951, as amended; or
4.9.1.11 any agreement, contract or commitment not
made in the ordinary course of business which
involves Ten Thousand Dollars ($10,000) or more or
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has a remaining term of one (1) year or more from
December 31, 1998, or is not cancelable on thirty
(30) days or less notice without penalty. Neither
Chem-Con nor its Subsidiaries has breached, and
there is not any claim, or, to the best of Chem-
Con's or the ALS Trust's knowledge, any claim that
Chem-Con or its Subsidiaries have breached any of
the terms or conditions of any agreement, contract
or commitment set forth in this Agreement or in any
of the Schedules attached hereto or of any other
agreement, contract or commitment, if any such
breach or breaches in the aggregate could result in
the imposition of damages or the loss of benefits
in an amount or of a kind material to Chem-Con or
its Subsidiaries.
4.9.2 Written List. Attached hereto as Schedule "H" is a
written list of all contracts, leases, agreements and
instruments which are in any single case of material
importance to the conduct of the business of Chem-Con
or its Subsidiaries, together with true and correct
copies of each document requested by Perma-Fix and a
written description of each oral arrangement so listed.
Without limiting the generality of the foregoing, the
aforesaid list includes all the contracts, agreements
and instruments of the following types to which Chem-
Con or its Subsidiaries is a party, or by which it is
bound (without regard to whether such contracts, agree-
ments and instruments are material):
4.9.2.1 leases of, and contracts for, the purchase or
sale of Real Property;
4.9.2.2 labor union contracts together with a list of
all labor unions representing or, to their
best knowledge, attempting to represent
employees of Chem-Con or its Subsidiaries;
4.9.2.3 pension, retirement, profit-sharing, bonus,
stock purchase, stock option, hospitalization
or insurance plans (and certificates or other
documents issued thereunder) or vacation pay,
severance pay and other similar benefit
arrangements for officers, directors,
employees or agents;
4.9.2.4 employment contracts or agreements, contracts
with other persons engaged in sales or service
activities, and advertising contracts, and
brokering contracts, which are not terminable
by Chem-Con or its Subsidiaries without lia-
bility 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
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of Chem-Con or its Subsidiaries, the Sullivans
or the Xxxxxxxx Trusts relating to present or
future compensation of, or other benefits
available to, such persons;
4.9.2.6 contracts, and other arrangements of any kind,
whether oral or written, with any director,
officer, employee, trustee, stockholder or
Affiliate of Chem-Con or its Subsidiaries, the
Sullivans or the Xxxxxxxx Trusts or to which
any director, officer, employee or Affiliate
of Chem-Con or any of its Subsidiaries is a
party;
4.9.2.7 contracts, purchase orders and other 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-Con, the Sullivans or the
Xxxxxxxx Trusts nor the performance or compliance by
the Chem-Con or its Subsidiaries, the Sullivans or the
Xxxxxxxx Trusts with any of the terms and provisions of
this Agreement will violate any Laws of any govern-
mental agency or authority, domestic or foreign, or
will at the Closing conflict with or result in a breach
of any of the terms, conditions or provisions of any
judgment, order, injunction, decree or ruling of any
court or governmental agency or authority, domestic or
foreign, to which any of Chem-Con or its Subsidiaries,
the Sullivans or the Xxxxxxxx Trusts may be subject to,
or bound by, or of any agreement or instrument to which
Chem-Con or its Subsidiaries, the Sullivans or the
Xxxxxxxx Trusts is a party or by which any of them is
bound, or constitute a default thereunder, or result in
the creation of any Liens upon the Chem-Con Common
Stock or any of the property or assets of Chem-Con or
its Subsidiaries, or cause any acceleration of maturity
of any obligation or loan, or give to others any
interest or rights, including rights of termination or
cancellation, in or with respect to any of the proper-
ties, assets, agreements, contracts, or business of
Chem-Con or its Subsidiaries, the Sullivans or the
Xxxxxxxx Trusts or cause any acceleration or
termination or cancellation, in or with respect to any
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of the properties, assets, agreements, contracts or
business of Chem-Con or its Subsidiaries, 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-Con or
its Subsidiaries and all applications for any of the
foregoing filed by Chem-Con or its Subsidiaries, the
Sullivans or the Xxxxxxxx Trusts relating to the
business of Chem-Con or its Subsidiaries with any
Governmental Authority. All permits, licenses and
franchises used by Chem-Con or its Subsidiaries to
conduct Chem-Con's or its Subsidiaries' business are in
the name of Chem-Con or its Subsidiaries and none are
in the name of any other party.
4.10.3 Reports. Schedule "I" is a true and complete list of
all reports made by, or with respect to Chem-Con or its
Subsidiaries, the Sullivans or the 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, Florida
Department of Environmental Protection, Georgia
Department of Natural Resources, all other state or
federal government agencies or departments, and tax
returns to, tax rulings from, and tax audit reports
from the IRS, relating in any manner to the business of
Chem-Con or its Subsidiaries.
4.10.4 Violation of Law and Contamination of Real Property.
Except as disclosed in Schedule "I", none of Chem-Con
or its Subsidiaries, the Sullivans nor the 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-Con or its
Subsidiaries or the business of Chem-Con or its
Subsidiaries or the financial condition or operations
of Chem-Con or its Subsidiaries, and none of the Real
Property owned or leased by Chem-Con and/or its
Subsidiaries is contaminated or requires remediation of
any kind as a result of being contaminated.
4.10.5 Permits under Environmental Laws. Chem-Con and its
Subsidiaries have obtained, presently holds and has
adhered to all permits, licenses, and other authori-
zations required under federal, state, and local laws
(including, but not limited to, any and all
Environmental Laws), (i) which are necessary for, or
material to, the conduct of Chem-Con's business or its
Subsidiaries' business as such businesses are currently
being operated, including, but not limited to, any and
all permits and licenses required under the
Environmental Laws for Chem-Con and its Subsidiaries to
conduct Chem-Con's business or its Subsidiaries'
-22-
business as currently conducted, and (ii) such other
permits, licenses and other authorizations relating to
pollution or protection of the environment, including,
without limitation, laws relating to emissions, dis-
charges, releases or threatened releases of pollutants,
contaminants (chemicals or industrial or toxic wastes
into the environment including, without limitation,
ambient air, surface waste, groundwater, soil or land),
or otherwise relating to the manufacture, processing,
recycling, reclamation, distribution, use, treatment,
storage, disposal, transport, or handling of 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-Con and its Subsidiaries are in com-
pliance with all terms and conditions of all such
required permits, licenses and other authorizations,
and with all other limitations, restrictions,
conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in
such Environmental Laws, except as disclosed in
Schedule I attached hereto. None of Chem-Con or its
Subsidiaries, the Sullivans nor the 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 compliance as described above, or that may give
rise to any common law or legal liability or otherwise
form the basis of any claim, action, demand, suit,
proceeding, hearing, study, or investigation related to
the manufacture, processing, recycling, reclamation,
distribution, use, treatment, storage, disposal,
transport or threatened release of, any pollutant,
contaminant, chemical or industrial or solid or toxic
waste or radioactive materials.
4.10.6 Other Permits. Except as set forth in Schedule "I",
neither the execution and delivery of this Agreement
nor the consummation thereof will violate any of the
terms of any of the permits, licenses, approvals and
authorities held by Chem-Con or its Subsidiaries or
cause the termination or cancellation of any of the
permits, licenses, approvals and authorities held by
Chem-Con or its Subsidiaries. None of Chem-Con or its
Subsidiaries, the Sullivans nor the Xxxxxxxx Trusts has
received official notice that Chem-Con or its
Subsidiaries is in violation of any law, regulation,
ordinance or rule applicable to them or their oper-
ations.
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-Con or its Subsidiaries pending or, to
the best of their knowledge threatened, which could adversely
affect the financial condition, results of operations or
business, assets or properties of Chem-Con or its
Subsidiaries, or the conduct of business of Chem-Con or its
Subsidiaries. Further, there is no suit, action or legal,
administrative, arbitration, governmental investigation or
-23-
other proceeding against Chem-Con or its Subsidiaries, or to
the best of their knowledge threatened, involving any claims
based upon negligence, product warranties, product liability
or any other type of claim (including, but not limited to,
those arising under any Environmental Laws) exceeding poten-
tial liability (including costs of defense and attorneys'
fees), whether or not covered by insurance, in an amount in
excess of Ten Thousand Dollars ($10,000.00) with respect to
the individual suit, action, proceeding or investigation, or
potential liability (including costs of defense and attorneys'
fees) of Twenty-Five Thousand Dollars ($25,000.00) in the
aggregate of all such suits, actions, proceedings or
investigations, except (a) workers' compensation, automobile
accident and other routine claims wholly covered by existing
insurance (including costs of defense and attorneys' fees) and
(b) as set forth in Schedule "J" hereto.
4.12 Authorization, Execution and Delivery of Agreement. Each of
Chem-Con, the Sullivans and the 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-Con, the Sullivans and the Xxxxxxxx Trusts have been duly
and validly authorized and approved by all requisite corporate
action on the part of Chem-Con and all requisite action of the
trustees under the Xxxxxxxx Trusts, and this Agreement
constitutes the valid and binding agreement and obligation of
Chem-Con, 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-Con, its
Subsidiaries, 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-Con or its
Subsidiaries of assets owned, leased or used by Chem-Con or
its Subsidiaries, or the conduct of Chem-Con or its
Subsidiaries's business, as presently conducted by Chem-Con or
its Subsidiaries, in accordance with present practices, after
the Closing. None of Chem-Con or its Subsidiaries, the
Sullivans nor the Xxxxxxxx Trusts is a party to, bound by, or
a beneficiary of, any agreement which could prevent the use of
assets material to Chem-Con or its Subsidiaries or the conduct
of business as currently conducted by Chem-Con or its
Subsidiaries in each case after the Closing.
4.14 Disclosure. No representation or warranty by Chem-Con, the
Sullivans and the Xxxxxxxx Trust 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, Florida Perma-Chem and/or
Georgia 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 state-
ments contained therein not misleading.
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4.15 Broker's or Finder's Fee. No agent, broker, person or firm
acting on behalf of the Chem-Con, the Sullivans and/or the
Xxxxxxxx Trust or under the authority of Chem-Con, 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 by this Agreement.
The Sullivans and the Xxxxxxxx Trusts shall pay to WHCA
Partners any and all fees and other renumeration due to WHCA
Partners in connection with this Agreement and the
transactions contemplated by this Agreement. Chem-Con shall
pay any expenses due to WHCA Partners for work performed by
WHCA Partners on behalf of Chem-Con prior to November 5, 1998;
provided however, Chem-Con shall not pay any commissions or
fees due to WHCA Partners in connection with this Agreement or
the transactions contemplated by this Agreement.
4.16 Insurance. Chem-Con and its Subsidiaries have in full force
and effect policies of insurance of the types, including
insurance policies under which Chem-Con, its Subsidiaries and
Chem-Con's or its Subsidiaries' officers, directors and Affil-
iates or any of them, in such capacity, is named insured, and
in the amounts and with insurance carriers as set forth in
Schedule "L" attached hereto, and will continue all of such
insurance in full force and effect up to and until the
Closing. The amounts and types of such insurance policies and
the insurance carriers issuing such policies fully meet Chem-
Con's and its Subsidiaries' contractual, legal or regulatory
commitments and are fully adequate to insure against risks to
which Chem-Con or its Subsidiaries is normally exposed in the
operation of its businesses and as required by Governmental
Authority and the Environmental Laws.
4.17 Completeness of Documents -- Chem-Con and CCC. The copies of
the Articles of Incorporation and Bylaws of Chem-Con and CCC,
and of all leases, instruments, agreements or other documents
(including all Schedules and documents delivered pursuant to
this Agreement) which have been or will be delivered to Perma-
Fix pursuant to the terms of this Agreement or in connection
with the transactions contemplated hereby, are, or if not now
delivered, will when delivered, be true, complete and correct.
4.18 Completeness of Documents -- 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, neither
Chem-Con nor its Subsidiaries have made any sale or other
disposition of any of their properties or assets or sur-
rendered 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
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each instance in the ordinary course of business or as set
forth in Schedule "M" attached hereto, and no such sale, dis-
position, surrender, addition, agreement or transaction set
forth in such Schedule "M" has any material adverse effect
upon the results of operations or financial condition of Chem-
Con or its Subsidiaries or Chem-Con's or its Subsidiaries'
ability to conduct Chem-Con's and its Subsidiaries' business
as currently conducted.
4.20 Obligations to Employees. All obligations of Chem-Con and/or
any Affiliates, whether arising by operation of law, contract,
agreement, or otherwise, for payments to trusts or other funds
or to any governmental agency or to any employees, directors,
officers, agents, or any other individual (or any of their
respective heirs, legatees, beneficiaries, or legal
representatives) with respect to profit-sharing, pension or
retirement benefits, or any other employee benefit of any kind
whatsoever relating to Chem-Con, its Subsidiaries or any of
their employees, have been paid. All legally enforceable
obligations of Chem-Con or its Subsidiaries, whether arising
by operation of law, contract, agreement, or otherwise, for
bonuses or other forms of compensation or benefits which are,
or may become, payable to its employees, directors, officers,
agents, or any other individual (or their respective heirs,
legatees, beneficiaries or legal representative) relating to
Chem-Con or its Subsidiaries or any of the employees of Chem-
Con or its Subsidiaries with respect to periods ending on or
before the Closing have been paid, or adequate accruals for
payment thereof are reflected on the Audited Financial
Statements. Neither Chem-Con nor any of its Affiliates has
any accumulated funding deficiencies, as such term is defined
in the Employee Retirement Income Security Act of 1974
("ERISA") and in the Code with respect to any employee benefit
plan as defined in ERISA maintained or established for
employees of Chem-Con or its Subsidiaries. Neither Chem-Con
nor its Subsidiaries has incurred any liability to the Pension
Benefit Guaranty Corporation ("PBGC") other than for the
payment of insurance premiums all of which have been paid when
due, the IRS or the Department of Labor ("DOL") with respect
to any such employee benefit plan that affects, or might
affect Chem-Con, and does not have any withdrawal liability
with respect to any multiemployer pension plan ("Multiemployer
Plan") which is subject to the Multiemployer Pension Plan
Amendments Act of 1980. The consummation of this Agreement
will not result in either a complete or partial withdrawal
from any of the Multiemployer Plans. All of the employee
benefit plans of which Chem-Con or any Affiliate of Chem-Con
is the plan sponsor relating to Chem-Con and its Subsidiaries
or any of their employees have been amended as, when and to
the extent necessary to comply with and qualify under the
applicable provisions of the Code; and all such employee
benefit plans have been administered in accordance with the
applicable provisions of the Code and ERISA. Except as
indicated on Schedule "N", any employee benefit plans relating
to Chem-Con or its Subsidiaries or any of their employees
which are pension benefit plans have received, or have applied
for and expect to receive, determination letters from the IRS
to the effect that such plans are qualified and exempt from
federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, and, no amendments have been made to any such
employee benefit plans other than those covered by such
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determination letters or applications for such determination
letters with respect to such amendments which have been timely
filed with the IRS. No determination letter received with
respect to any employee benefit plan relating to Chem-Con or
its Subsidiaries or any of their employees has been revoked
nor has revocation been threatened. Each of the employee
benefit plans have been administered at all times and in all
respects in accordance with their respective terms. There are
no pending investigations by any Governmental Authority
involving any employee benefit plans relating to Chem-Con or
its Subsidiaries or any of their employees, no deficiency or
termination proceedings involving such employee benefit plans,
and no threatened or pending claims (except for claims for
benefits payable in the normal operation of the employee
benefit plans), suits or proceedings against any such
employee benefit plan or asserting any rights or claims to
benefits under any such employee benefit plan nor are there
any facts which could give rise to any liability in the event
of any such investigation, claim, suit or proceeding. Neither
the employee benefit plans nor any trusts created thereunder
relating to Chem-Con or its Subsidiaries or to any of their
employees, nor any trustee, administrator or other fiduciary
thereof, has engaged in a "prohibited transaction" (as such
term is defined in Section 4975 of the Code or Section 406 of
the ERISA); and has not experienced any reportable event within the
meaning of ERISA or other event or condition which presents a
material risk of termination of any such employee benefit plan
by the PBGC, has had any tax imposed upon it by the IRS for
any alleged violation under Section 4975 of the Code, or has engaged
in any transaction which might subject Chem-Con or its
Subsidiaries or any such employee benefit plan to any
liability for such tax. The terms of any such employee
benefit plans comply with ERISA and the Code in all respects,
and, any and all reporting and disclosure requirements of
ERISA or the Code and the DOL with respect to any such
employee benefit plan have been timely met. The information
supplied to the actuary by Chem-Con or its Subsidiaries, the
Sullivans or the Xxxxxxxx Trusts for use in preparing those
reports was complete and accurate and none of Chem-Con, 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-
Con or any of its Affiliates relating to Chem-Con or its
Subsidiaries or to any of their employees, there will be no
liability of Chem-Con or its Subsidiaries or the plan with
respect to the providing of benefits accrued thereunder
subject to future variations in levels of compensation
assuming continued investment returns at rates actuarially
predicted. Further, if termination (whether complete or
partial) of any plan has occurred, then, all liabilities with
respect thereto have been satisfied in full and no present
liability exists with respect to any such prior termination.
Schedule "N" also includes a list of any and all pension or
benefit obligations of Chem-Con and/or its Affiliates which
have not been fully funded.
4.21 Condition of Plant, Machinery and Equipment. Except as set
forth on Schedule "O", all of the items of the property, plant
and equipment owned, operated or leased by Chem-Con or its
Subsidiaries are, in all material respects, in good condition
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and repair, reasonable wear and tear excepted, and Chem-Con
and its Subsidiaries agree to maintain such items in good
operating condition until the Closing. Casualty losses to
such property, plant and equipment are covered by insurance
with normal industry deductibles being applicable.
4.22 Books of Account. Chem-Con has maintained its books of
account in accordance with GAAP, applied on a consistent basis
with prior periods.
4.23 Stock Redemptions. There are no shares of Chem-Con Common
Stock which are subject to redemption or purchase in lieu of
redemption, which prior to September 30, 1998, were not paid
for in full. From September 30, 1998, through the date of
this Agreement, Chem-Con has not purchased or redeemed or
entered into any agreement to purchase or redeem any Chem-Con
Common Stock.
4.24 Minute Books. Chem-Con and its Subsidiaries have maintained
their corporate minute books and all such books are current.
4.25 Indebtedness of Shareholders, etc. Except as set forth on
Schedule "P", none of the shareholders, Affiliates, officers,
directors or employees of Chem-Con is (i) indebted to Chem-Con
or its Subsidiaries, and neither Chem-Con nor its Subsidiaries
is indebted to their Affiliates, shareholders or any of their
officers, directors or employees, (ii) a party to or has any
interest in a material contract, agreement or lease with Chem-
Con or its Subsidiaries or in which Chem-Con or its
Subsidiaries is a party to or bound by, or (iii) a customer or
supplier of Chem-Con or its Subsidiaries, which during any one
of the preceding three (3) years supplied to or purchased from
Chem-Con or its Subsidiaries a amount of property or services
exceeding Ten Thousand Dollars ($10,000.00) in any one (1)
year.
4.26 Business Prospects. Since September 30, 1998, there has not
occurred any event or other occurrence which might have a
material adverse effect on the business or business prospects
of Chem-Con or its Subsidiaries.
4.27 Bank Accounts; Powers of Attorney. Schedule "Q" attached
hereto sets forth each bank account and borrowing resolution
authorizing officers or agents of Chem-Con or its Subsidiaries
to borrow money and lists the persons authorized to transact
business on behalf of Chem-Con or its Subsidiaries with
respect to each such account or borrowing resolution.
Schedule "Q" also lists all powers of attorney granted by
Chem-Con or its Subsidiaries to any other person.
4.28 Sensitive Payments. Neither Chem-Con nor its Subsidiaries has
made or received, and to their best knowledge, after
reasonable due inquiry, none of their officers, directors,
employees, agents, shareholders or other representative of
Chem-Con or its Subsidiaries or any person acting on behalf of
Chem-Con or its Subsidiaries, has made or received, directly
or indirectly, any bribes, kickbacks, illegal political
contributions with corporate funds, improper payments from
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corporate funds that are falsely recorded on the books and
records of Chem-Con, payments to governmental officials in
their individual capacities or illegal payments from corporate
funds to obtain or retain business.
ARTICLE 5
ADDITIONAL REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE SULLIVANS AND THE 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-
Con, the Sullivans and the Xxxxxxxx Trusts will provide Perma-
Fix with a list of those persons who are, in Chem-Con's
reasonable judgment, "Affiliates" of Chem-Con within the
meaning of Rule 145 as promulgated under the Securities Act
("Rule 145") (each such person who is an "affiliate of Chem-
Con within the meaning of Rule 145 is referred to as a "Chem-
Con Affiliate"). Chem-Con, 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-Con
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 ALS
Trust under this Agreement as a result of the Mergers 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:
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"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"),
Florida Perma-Chem, Inc., Georgia Perma-Chem,
Inc., Chemical Conservation Corporation, Chemical
Conservation of Georgia, 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-Met
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,
"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 duly
authorized committee of the Board of Directors) of
Perma-Fix. Notwithstanding anything in this 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
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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, or (ii)
tender or exchange offers for Perma-Fix Voting
Securities under any circumstances or (iii) any
election contest relating to the election of directors
of Perma-Fix; or
5.4.3 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
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; or
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-Met 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.
ARTICLE 6
NO SOLICITATION OF TRANSACTIONS
6.1 No Solicitation of Transactions. Chem-Con, 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
-31-
offers to purchase any of the assets of Chem-Con and/or Chem-
Met (other than sales of products in the ordinary course of
their businesses); (ii) negotiate, sell, offer to sell or
solicit offers to purchase or exchange, any capital stock of
Chem-Con, Chem-Met or any Subsidiary of Chem-Con or Chem-Met
to, from or with any other party (other than pursuant to the
terms of this Agreement and the Chem-Met Agreement) or enter
into any merger, consolidation, liquidation or similar 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-Met Agreement) and
none of the Xxxxxxxx, 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 the terms of this Agreement and the Chem-Met
Agreement) in connection with any such proposed purchase or
transaction; or, (iii) negotiate, sell, offer to sell or
solicit any offers to purchase any outstanding shares of Chem-
Con's and Chem-Met's capital stock or any other securities of
Chem-Con and Chem-Met (other than pursuant to the terms of
this Agreement and the Chem-Met Agreement).
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PERMA-FIX
Perma-Fix, Florida Perma-Chem and Georgia Perma-Chem,
jointly and severally, represent and warrant to the ALS Trust as
follows:
7.1 Organization, etc. Perma-Fix is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware. Florida Perma-Chem is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Florida. Georgia Perma-Chem is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia. Perma-Fix
has the corporate power to own its property and to carry on
its business as now being conducted; Perma-Fix has the
corporate power and authority to execute and deliver this
Agreement and, after 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 3.1.4 hereof and consummate the
transactions contemplated hereby and the Chem-Met Agreement,
and to perform the transactions contemplated by this
Agreement. Each of Florida Perma-Chem and Georgia Perma-Chem
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
approvals from its shareholders and its lender, to consummate
the transactions contemplated hereby.
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7.2 Authorization, Execution and Delivery of Agreement. The exe-
cution, delivery and performance of this Agreement by Perma-
Fix, Florida Perma-Chem and Georgia Perma-Chem have been duly
and validly authorized and approved by the Board of Directors
of Perma-Fix. This Agreement constitutes the valid and
binding agreement of Perma-Fix, enforceable in accordance with
its terms, subject to bankruptcy, insolvency and other laws of
similar import, and Perma-Fix, Florida Perma-Chem and Georgia
Perma-Chem 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, Florida Perma-Chem and Georgia Perma-Chem
and Perma-Fix's, Florida Perma-Chem's and Georgia Perma-Chem'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 here-
inafter 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-Con and the ALS
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 as amended by
Amendment No. 1 on Form 10-Q/A filed with the
SEC on January 14, 1999.
7.4.1.4 Proxy Statement, dated April 20, 1998, in
connection with its 1998 Annual Meeting of
Stockholders; and
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7.4.1.5 Form 8-K, Date of Report (date of earliest
event reported): June 30, 1998.
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."
7.4.2 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:
7.4.2.1 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
7.4.2.2 any event, condition or state of facts (other
than the general state of the national economy
and proposed federal legislation or
regulation) of any character which, to the
knowledge of Perma-Fix, materially and
adversely affects the results of operations or
business or financial condition or properties
of Perma-Fix and its subsidiaries, taken as a
whole, except as otherwise disclosed in this
Section 7.4.
7.5 Status of Perma-Fix Common Stock. The shares of Perma-Fix
Common Stock to be delivered pursuant to Section 3.1.4 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, Florida Perma-Chem
and Georgia Perma-Chem nor compliance with the terms and pro-
visions of this Agreement by Perma-Fix, Florida Perma-Chem and
Georgia Perma-Chem will violate (i) any law, statute, rule or
regulation of any governmental authority, domestic or foreign,
or will at the Closing Date conflict with or result in a
breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree or ruling of any court or
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governmental agency or authority to which Perma-Fix, Florida
Perma-Chem and Georgia Perma-Chem 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, Florida Perma-Chem and Georgia
Perma-Chem 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-Con, there is no suit, action, or legal, administrative,
arbitration or other proceeding or governmental investigation
pending, or to the best of the knowledge of Perma-Fix
threatened, which could materially and adversely affect the
financial condition and results of operations of Perma-Fix and
its subsidiaries, taken as a whole.
7.8 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of Perma-Fix, or under its authority, is or
will be entitled to any commission or broker's or finder's fee
from any of the parties hereto in connection with any of the
transactions contemplated herein.
ARTICLE 8
COVENANTS OF CONDUCT AND TRANSACTIONS
PRIOR TO AND AFTER THE CLOSING
8.1 Investigations; Operation of Business of Chem-Con. Chem-Con,
the Sullivans and the 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, Florida
Perma-Chem and Georgia Perma-Chem and their repre-
sentatives shall have full access to all their premises
and books and records relating to Chem-Con, and shall
cause Chem-Con to provide to Perma-Fix and its repre-
sentatives full access to their premises and books and
records, and to cause Chem-Con's officers to furnish
Perma-Fix, Florida Perma-Chem and Georgia Perma-Chem
with such financial and operating data and other
information with respect to the business and properties
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of Chem-Con, as Perma-Fix, Florida Perma-Chem and
Georgia Perma-Chem shall from time to time request;
provided, however, that any such investigation shall
not affect any of the representations, warranties or
covenants of Chem-Con, the Sullivans and/or the
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-Con. In the event of
termination of this Agreement, Perma-Fix will return to
Chem-Con any and all financial statements, agreements,
documents, memoranda or other repositories of informa-
tion relating to Chem-Con that Perma-Fix, Florida
Perma-Chem and/or Georgia Perma-Chem has obtained in
connection with its review, and Perma-Fix agrees that
any written information relating to Chem-Con and Chem-
Con's financial condition, business, operations and
prospects are strictly confidential and shall not be
voluntarily disclosed to any third party or used by
Perma-Fix for its benefit or the benefit of any other
person, except for such information or documents (i)
available generally to the public, (ii) in the 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-Con. To cause Chem-Con
and its Subsidiaries, to the extent required for
continued operation of Chem-Con's and its Subsidiaries'
business without impairment, to use Chem-Con's best
efforts to preserve substantially intact the business
organization of Chem-Con and its Subsidiaries to keep
available the services of the present officers and
employees of Chem-Con and its Subsidiaries, and to
preserve the present relationships of Chem-Con and its
Subsidiaries with persons having significant business
relations therewith such as suppliers, customers,
brokers, agents or otherwise.
8.1.3 Ordinary Course of Business. To cause Chem-Con to con-
duct Chem-Con's and its Subsidiaries' businesses only
in the ordinary course and, by way of amplification and
not limitation, Chem-Con and its Subsidiaries will not
without the prior written consent of Perma-Fix (except
as otherwise specifically provided in this Agreement):
8.1.3.1 issue any capital stock or make any changes to
its authorized, issued or outstanding capital
stock, grant any stock options or rights to
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
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8.1.3.2 declare, set aside, or pay any dividend or
distribution with respect to any of its
capital stock or any other securities
convertible into any class of capital stock;
or
8.1.3.3 directly or indirectly redeem, purchase or
otherwise acquire any of its capital stock or
enter into any agreement to purchase or redeem
any of the Chem-Con Common Stock; or
8.1.3.4 effect a split or reclassification of any of
its capital stock convertible into any class
of capital stock, purchase, redeem, retire or
otherwise acquire any shares of any class of
its capital stock or any security convertible
into any class of its capital stock or agree
to do any of the foregoing; or
8.1.3.5 change its charter or bylaws; or
8.1.3.6 except consistent with past practices, grant
any increase in the compensation payable or to
become payable by it to its officers or
employees or any increase, regardless of
amount, in any bonus, insurance, pension or
other benefit plan, program, payment or
arrangement made to, for, or with any officers
or employees; or
8.1.3.7 engage in any transaction not in the ordinary
course of business; or
8.1.3.8 borrow or agree to borrow any funds or assume,
endorse, guarantee or agree to guarantee or
otherwise as an accommodation become liable or
responsible for obligations of any other
individual, firm or corporation; or
8.1.3.9 waive any rights of substantial value; or
8.1.3.10 enter into an agreement, contract or 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-Con; or
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8.1.3.13 adopt, enter into, or amend materially
any employment contract or any bonus,
stock option, profit-sharing, pension,
retirement, incentive, or similar
employee benefit program; or
8.1.3.14 pay or incur any obligation or liability,
absolute or contingent, other than 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, neither Chem-Con nor any of its Subsidiaries
will undertake or enter into any sale, disposition,
surrender, acquisition, agreement or transaction
relating to any of its assets except in the ordinary
course of business or as contemplated by this
Agreement.
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8.2 No Selling of Shares or Granting of Options. Prior to the
Closing, neither the ALS Trust, Chem-Con nor CCC shall sell,
transfer, assign or otherwise dispose of any of the Shares or
the shares of capital stock of CCC or grant any options,
warrants, or other rights to purchase or otherwise acquire any
Shares or other shares of the capital stock of Chem-Con or
CCC, or issue any securities convertible into any shares of
the capital stock of Chem-Con or CCC.
8.3 Consents. Chem-Con, the Sullivans, the 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-Con, the Sullivans, the Xxxxxxxx Trusts or Perma-Fix, as
the case may be, to consummate the transactions contemplated
by this Agreement.
8.4 Governmental Reports. Between the date of this Agreement and
the Closing, the Sullivans, the Xxxxxxxx Trusts and Chem-Con
shall furnish, make available to Perma-Fix any and all
reports, not heretofore delivered to Perma-Fix under this
Agreement or which are filed subsequent to the date of this
Agreement, to any state, federal or local government, agency
or department, including, but not limited to, the SEC, the
IRS, the EPA, the FTC and the PBGC.
8.5 Conduct of Business. Prior to the Closing, Chem-Con shall
conduct its business in the ordinary and usual course as
heretofore conducted and to use its best efforts (i) to
preserve its business and business organization intact; (ii)
to keep available to Chem-Con the services of the present
officers and employees of Chem-Con; (iii) to preserve the
goodwill of customers and others having business relations
with Chem-Con; (iv) to maintain its properties in customary
repair, working order and condition (reasonable wear and tear
excepted); (v) to comply with all Laws applicable to it and
the conduct of its businesses; (vi) to keep in force at not
less than their present limits all existing policies of
insurance; (vii) to make no material changes in the customary
terms and conditions upon which it does business; (viii) to
duly and timely file all reports, returns, and other documents
required to be filed with federal, state, local and other
Governmental Authorities; and, (ix) unless it is contesting
the same in good faith and has established reasonable reserves
therefor, to pay, when required to be paid, all Taxes
indicated by Returns so filed or otherwise lawfully levied or
assessed upon it or any of its properties and to withhold or
collect and pay to the proper Governmental Authorities or hold
in separate bank accounts for such payment all taxes and other
assessments which it believes in good faith to be required by
Law to be so withheld or collected.
8.6 Governmental Approvals. Prior to Closing, each of Chem-Con,
the Sullivans and the 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
all required Governmental Approvals as promptly as practicable
to consummate the transactions contemplated by this Agreement.
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8.7 Encumber. None of Chem-Con, the ALS Trust nor the 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-Con prior to
the Closing other than pursuant to this Agreement.
8.8 Title Policies for Real Property Owned by Chemical Florida.
On or before five (5) days prior to the Closing Date, Chemical
Florida shall deliver to Perma-Fix a fully paid policy or
policies of title insurance, dated as of a date within five
(5) days of the Closing Date, issued to Chemical Florida and
Florida Perma-Chem by a title company of nationally recognized
standing, reasonably satisfactory to Perma-Fix, on a standard
ALTA's owner title insurance policy form, insuring that
Chemical Florida has good and marketable fee simple title in
and to each parcel of Real Property owned by Chemical Florida
listed on Schedule F hereto, free and clear of all Liens and
containing no exceptions, except (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
Chemical Florida shall be as set forth on Schedule F hereto.
The cost and expense for such title insurance shall be shared
equally by the Sullivans and Perma-Fix.
8.9 Title Policies for Real Properties owned by Chemical Georgia.
On or before five (5) days prior to the Closing Date, Chemical
Georgia shall deliver to Perma-Fix a fully paid policy or
policies of title insurance, dated as of a date within five
(5) days of the Closing Date, issued to Chemical Georgia and
Georgia Perma-Chem by a company of nationally recognized
standing, reasonably satisfactory to Perma-Fix, or a standard
ALTA's owner title insurance policy form, insuring to Chemical
Georgia and Georgia Perma-Chem that Chemical Georgia has good
and marketable fee simple title in and to each parcel of Real
Property owned by Chemical Georgia listed on Schedule F
hereto, free and clear of all Liens and containing no
exceptions, except (a) standard printed exceptions (other than
exemptions 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 Chemical Georgia
shall be as set forth on Schedule F hereto. The cost and
expenses for such title insurance shall be shared equally by
the Sullivans and Perma-Fix.
8.10 Real Property Located in Orlando, Florida. The Real Property
located in Orlando, Florida, as described in Schedule F
attached hereto, and all improvements located thereon (the
"Orlando Real Property"), which Orlando Real Property is being
leased by Chemical Florida, from the ALS Trust. ALS Trust
represents and warrants that it has good and marketable fee
simple title in and to the Orlando Real Property and all of
the Mineral Rights thereunder, free and clear of any and all
Liens except for (a) Permitted Encumbrances and (b) two
mortgages owed to and held by (i) Sun Trust Bank with the
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principal amount of such indebtedness as of December 31, 1998,
being approximately $110,000.00 ("Sun Trust Debt") and (ii)
Commercial Carrier with the principal amount of such
indebtedness as of the date hereof being approximately
$138,000.00 ("Carrier Debt"). The Sun Trust Debt and Carrier
Debt are collectively referred to herein as the "Two
Mortgages." Within ten (10) days prior to the Closing, the
ALS Trust shall, through a capital contribution, transfer and
convey good and marketable fee simple title to all of the
Orlando Real Property, all improvements located thereon and
all of the Mineral Rights thereunder, by a general warranty
deed in form and contents satisfactory to Perma-Fix, to
Chemical Florida, free and clear of any and all Liens except
for Permitted Encumbrances and the Two Mortgages. ALS Trust
represents and warrants that the Two Mortgages are current and
without default and no event has occurred under the Two
Mortgages which would, with the passage of time, result in a
default. On or before five (5) days prior to the Closing
Date, the ALS Trust shall deliver to Perma-Fix a fully paid
policy of title insurance, dated as of the date within five
(5) days of the Closing Date, issued to Chemical Florida and
Florida Perma-Chem by a title company of nationally recognized
standing, reasonably satisfactory to Perma-Fix, on a standard
ALTA's owner title insurance policy form, insuring to Chemical
Florida and Florida Perma-Chem that Chemical Florida has good
and marketable fee simple title in and to the Orlando Real
Property, free and clear of all Liens and containing no
exceptions other than (a) standard printed exceptions (other
than exceptions for mechanics, artisans or materialmen's liens
and for matters that would be revealed by a survey), (b)
Permitted Encumbrances and (c) the Two Mortgages. The amount
of such title insurance shall be $385,000.00. The cost and
expense for such title insurance shall be shared equally by
the ALS Trust and Perma-Fix.
8.11 Survey. Simultaneously with the delivery of the title
policies to Perma-Fix pursuant to Sections 8.8, 8.9 and 8.10
hereof, Chem-Con shall deliver to Perma-Fix and the title
company issuing the title insurance under Sections 8.8, 8.9
and 8.10 hereof, a written survey prepared by a duly licensed
surveyor reasonably satisfactory to Perma-Fix covering each of
the Real Properties owned by Chem-Con and the Orlando Real
Property, which survey shall be satisfactory to Perma-Fix and
to the title company issuing the ALTA's owner's title
insurance policies. The cost and expense for such survey
shall be shared equally by the Sullivans and Perma-Fix.
8.12 Public Announcements. Perma-Fix, the Sullivans and the
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.
8.13 Notification. Chem-Con, the Sullivans and the Xxxxxxxx Trusts
shall give Perma-Fix prompt written notice of (i) the
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existence of any fact or the occurrence of any event which
constitutes, or with the giving of notice or the passage of
time or both would constitute a breach of any representation
or warranty of Chem-Con, the Sullivans or the Xxxxxxxx Trusts
made herein or pursuant hereto and (ii) the taking of any
action by Chem-Con, the Sullivans or the Xxxxxxxx Trusts that
would breach or violate, or constitute a default under, any
agreement or covenant of Chem-Con, 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.
8.14 Filings. The parties hereto shall, as promptly as practicable
after the date hereof, submit applications, all documents,
reports and notifications, and satisfy all requests for
additional information, if any, pursuant to 40 Code of Federal
Regulations ("CFR") Part 270 and all other requirements under
any and all applicable Environmental Laws, with regard to the
transfer of, or changes in the ownership or operational
control of Chem-Con or any of its Subsidiaries or the permits,
licenses or approvals held or used by Chem-Con or any of its
Subsidiaries relating to the businesses of Chem-Con or any of
its Subsidiaries. Each of the parties hereto agree to
reasonably cooperate with each other to obtain all authoriza-
tions required under any and all applicable laws, to
consummate the transactions contemplated hereby.
8.15 Supplemental Disclosure. Chem-Con, 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-Con, 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, Florida Perma-Chem and
Georgia Perma-Chem.
8.16 SEC Filings. Perma-Fix shall provide the Sullivans with all
reports and other filings it makes with the SEC under the
Securities Act or under the Exchange Act from the date of this
Agreement to the Closing.
8.17 Listing of Perma-Fix Common Stock. Perma-Fix shall use
reasonable efforts to obtain, prior to the Closing, approval
for listing on the BSE and NASDAQ Small Cap Market, upon
official notice of issuance, of the shares of Perma-Fix Common
Stock to be delivered pursuant to the provisions of Section
3.3 hereof.
8.18 Perma-Fix Registration Statement, etc. Prior to the Effective
Date of the Mergers, 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
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purpose of registering the shares of Perma-Fix Common Stock to
be issued pursuant to the terms of this Agreement and the
Chem-Met 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
the shareholders meetings of Chem-Con, Chem-Met and Perma-Fix
called for the purpose of approving this Agreement, the Chem-
Met Agreement and the Mergers 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-Met
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.
8.19 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.
8.20 Registration Statement; Proxy Statement/Prospectus. Chem-Con,
the Sullivans and the Xxxxxxxx Trusts, jointly and severally,
covenant and agree that the information to be supplied by
Chem-Con, the Sullivans and/or the Xxxxxxxx Trusts pursuant to
this Agreement and the Chem-Met Agreement for inclusion in the
Registration Statement pursuant to which shares of Perma-Fix
Common Stock issued in the Mergers 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-Con, 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 Mergers and the
issuance of shares of Perma-Fix Common Stock pursuant to the
Mergers 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
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Effective Time any event relating to Chem-Con or any of its
Affiliates, officers, directors, employees or shareholders
which should be discovered by Chem-Con, 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-Con, the Sullivans and/or the Xxxxxxxx Trusts
shall promptly inform Perma-Fix.
8.21 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 Mergers 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.
8.22 Audited Financial Statements. For inclusion in the
Registration Statement and Proxy Statement, 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 Bovtiz
& 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 Two Hundred Thousand Dollars ($200,000); (iii)
accrued expenses of Six Hundred Thousand Dollars ($600,000);
(iv) reserve for remediation of Chem-Con's Valdosta, Georgia
facility of One Million Eight Hundred Thousand Dollars
($1,800,000); and (v) accrued closure costs of Six Hundred
Thirty-Five Thousand Eight Hundred Two Dollars ($635,802), in
which case the audit shall be paid for in its entirety by
Chem-Con.
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8.23 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 Mergers 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.
8.24 Pooling Accounting. From and after the date hereof and until
the Effective Time, neither Chem-Con 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 Mergers and the Chem-Met Merger as provided in the
Chem-Met Agreement as a pooling of interests for accounting
purposes.
8.25 Letter of Public Accountants. Chem-Con, 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
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
consolidated financial statements, inquiries of officers of
Chem-Con and Chem-Met responsible for financial and accounting
matters and a reading of the minutes, nothing has come to
their attention which caused them to believe that (a) as of
the date of the latest available unaudited interim financial
statements prepared by Chem-Con and Chem-Met there was any
change in the capital stock or long-term debt of Chem-Con,
Chem-Met and their subsidiaries consolidated or any decreases
in consolidated net current assets or in consolidated net
assets, as compared with the amounts shown in the
September 30, 1998, consolidated Balance Sheet, or (b) for the
period from September 30, 1998, to the date of the latest
available unaudited interim consolidated financial statements
prepared by Chem-Con, there were any decreases, as compared
with the corresponding period in the 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
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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 Mergers 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.
8.26 Assumption of Liabilities. 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 and Quanta (and any other corporation
with respect to periods for which such corporation was
included and consolidated federal income tax returns with
Chem-Con or Quanta) for any period ending on or prior to the
Closing Date, without regard to whether such liabilities have
been or would be properly provided for in the financial
records of any person under generally accepted accounting
principals, and including, without limitation, any such
obligations or liabilities arising from (A) the transactions
contemplated by this Agreement, (B) the determination of any
tax on a consolidated basis with any other corporation, or (C)
any tax sharing or tax allocation agreement, and (ii)
obligations and liabilities (absolute or contingent known or
unknown)of Quanta that have been incurred by Quanta in any
manner whatsoever prior to the Closing Date or arising in any
way in connection with the business or operations of Quanta
prior to the Closing Date.
8.27 Liability to Broker. 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 by 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 due and
payable to WHCA Partners as a result of this Agreement and/or
consummation of the transactions contemplated by this
Agreement.
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8.28 Access to Premises and Books. Perma-Fix agrees 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 request; provided, however, that any such investi-
gation shall not affect any of the representations, warranties
or covenants of Perma-Fix hereunder; and, provided further,
that any such investigation shall be conducted in such manner
as not to interfere unreasonably with the operation of the
business of Perma-Fix. In the event of termination of this
Agreement, the Sullivans and the 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-Con, the
Sullivans or the Xxxxxxxx Trusts have obtained in connection
with their review, and Chem-Con, 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-
Con, 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-Con prior to its receipt under this
Agreement, (iii) obtained by any of Chem-Con, the Sullivans or
the Xxxxxxxx Trusts from a third party who has an independent
right to such information or documents, or (iv) as otherwise
required by law to be disclosed; provided, however, that any
confidentiality requirements contained in this Section shall
terminate and be null and void twelve (12) months from the
date of this Agreement.
ARTICLE 9
CONDITIONS OF TRANSACTIONS CONTEMPLATED BY AGREEMENT;
ABANDONMENT OF AGREEMENT
9.1 Closing Conditions of Perma-Fix, Florida Perma-Chem and
Georgia Perma-Chem. The obligations of Perma-Fix, Florida
Perma-Chem and Georgia 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-Con. Chem-Con shall have furnished to Perma-Fix,
in form and substance satisfactory to Perma-Fix:
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9.1.1.1 certified copies of resolutions of the
shareholder and Board of Directors of Chem-
Con, duly adopted by the Board of Directors
and shareholder of Chem-Con, authorizing, the
execution, delivery and performance of this
Agreement by Chem-Con and its shareholder;
9.1.1.2 Incumbency certificate for the officers
of Chem-Con.
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-Met Agreement, and Perma-Fix
shall have obtained for Florida Perma-Chem and Georgia
Perma-Chem a working capital line of credit from and
after consummation of the Mergers on terms 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.
9.1.5 Representations and Warranties of Chem-Con to be True
and Compliance With Covenants. Except to the extent
waived in writing by Perma-Fix hereunder, (i) the
representations and warranties of Chem-Con herein 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-Con 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-Con on or prior to
the Closing Date. Chem-Con shall also have delivered
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to Perma-Fix a certificate of Chemical Florida (in form
and substance satisfactory to Perma-Fix), dated the
Closing Date and signed by the chief executive officer
of Chemical Florida, to both of the aforementioned
effects. Chem-Con shall also have delivered to Perma-
Fix a certificate of Chemical Georgia (in form and sub-
stance satisfactory to Perma-Fix), dated the Closing
Date and signed by the chief executive officer of
Chemical Georgia, to both of the aforementioned
effects.
9.1.6 Third Party Consents. Chem-Con, 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-Con, 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 Governmental
Authorities which require such consents or noti-
fications.
9.1.7 No Material Adverse Change. There shall not have
occurred (i) any material adverse change since
September 30, 1998, in the business, properties,
assets, results of operations or financial condition of
Chem-Con, or (ii) any loss or damage to any of the
properties or assets (whether or not covered by
insurance) of Chem-Con which will materially affect or
impair the ability of Chem-Con to conduct, after con-
summation of the transactions contemplated hereby, the
business of Chem-Con as now being conducted by Chem-
Con.
9.1.8 Statutory Requirements; Litigation. In a manner
satisfactory to Perma-Fix, (i) all statutory
requirements for the valid consummation by Chem-Con,
the 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 the
Chem-Con, the Xxxxxxxx Trusts and the Sullivans of the
transactions contemplated by this Agreement and to
permit the business presently conducted by Chem-Con to
continue unimpaired immediately following the Closing
shall have been obtained; and, (ii) all applications
for permits shall have been approved by the appropriate
Governmental Authorities and all authorizations and
approvals relating to all permits and licenses held by
Chem-Con shall have been obtained from the appropriate
Governmental Authorities under any and all of the
Environmental Laws as a result of the change in
ownership of Chem-Con, pursuant to the terms of this
Agreement, with such permits, approvals and authori-
zations to be in form and substance satisfactory to
Perma-Fix, so that Chem-Con is permitted to continue
unimpaired immediately following the Closing Date the
same business operations that Chem-Con carried on as of
the date of this Agreement and the Closing Date.
Between the date of this Agreement and the Closing, no
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Governmental Authority, whether federal, state or
local, shall have instituted (or threatened to
institute either orally or in a writing directed to any
of Chem-Con, the Sullivans and/or the 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 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.
9.1.9 Opinion of Counsel of Chem-Con, the Sullivans and the
Xxxxxxxx Trusts. Perma-Fix shall have received from
X'Xxxxxx & Xxxxx, counsel to Chem-Con, 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 "E" 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-Con, 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-Con, and
shall have determined to the satisfaction of Perma-Fix
that, (i) Chem-Con has been and is currently in
compliance in all material respects with all applicable
Environmental Laws, except as otherwise disclosed
herein; (ii) none of the assets (including, but not
limited to, the soils and groundwater on or under any
of the Real Properties) owned, leased, operated or used
by Chem-Con are contaminated with any hazardous
substance (as defined in Section 101(14) of CERCLA or
any analogous state or local Laws) or petroleum (as
defined in Subtitle I of RCRA or any analogous state or
local Laws) in a manner that might have a material
adverse effect on Chem-Con, except as otherwise
disclosed herein; and (iii) Chem-Con is not or would
not be subject to any liability in any material amount
under any provision, or as a result of any past or
present violation, of any applicable Environmental
Laws.
9.1.13 Stock Certificates. On or prior to the Closing, the
ALS Trust shall execute, endorse in blank and deliver
to Perma-Fix, with signatures guaranteed by a bank or
investment banking firm and in form acceptable to
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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 by Governmental
Authorities under all Environmental Laws) which Perma-
Fix deems necessary to conduct Chem-Con's business
after the Effective Time as currently conducted by
Chem-Con (i) have been duly and validly transferred, or
approved for transfer effective upon the Closing, to
Florida Perma-Chem and Georgia Perma-Chem, whichever is
appropriate, by all Governmental Authorities or (ii)
have been duly and validly issued to Florida Perma-Chem
and Georgia Perma-Chem, whichever is appropriate, 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-Con (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 Small Cap Market shall have approved for
listing, upon official notice of issuance, the shares
of Perma-Fix Common Stock to be delivered pursuant to
the provisions of Article 3 hereof.
9.1.17 Minute Books and Stock Ledgers. The ALS Trust shall
have delivered to Perma-Fix the minute books and stock
ledgers for Chem-Con.
9.1.18 Financial Statements. Perma-Fix shall have received
from Bovitz & Co., P.C. audited financial statements
("Chem-Con Audited Financial Statements") of 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-Met Agreement and as
required by Regulation S-X (17 CFR Part 210), with such
audited financial statements to be prepared in accord-
ance with Regulation S-X (17 CFR Part 210) and GAAP,
consistently applied throughout the periods, and with
the Bovitz & Co., P.C. report in connection therewith
to be unqualified.
9.1.19 Orlando Real Estate. Good and marketable fee simple
title in and to the Orlando Real Estate and all
improvements thereon shall have been transferred and
conveyed to Chemical Florida by a capital contribution,
free and clear of any and all Liens, except for the
Permitted Encumbrances and the Two Mortgages.
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9.1.20 Title Policies and Surveys. Prior to the Closing Date,
Perma-Fix shall have received the title insurance
policies and surveys pursuant to Sections 8.8, 8.9,
8.10and 8.11 hereof.
9.1.21 Good Standing Certificates. Good standing and tax
certificates (or analogous documents), dated as close
as practicable to the Closing, from the appropriate
authorities in each jurisdiction of incorporation of
Chem-Con and in each jurisdiction in which Chem-Con is
qualified to do business, showing Chem-Con to be in
good standing and to have paid all taxes due in the
applicable jurisdiction.
9.1.22 Resignation of Directors. All of the directors of
Chem-Con shall have resigned as members of the Board of
Directors of Chem-Con, effective as of the Closing
Date, except for any existing director of Chem-Con who
Perma-Fix advises the ALS Trust in writing prior to
Closing is to remain a director of Chem-Con, whichever
is applicable, prior to Closing.
9.1.23 Chem-Met Agreement. The Chem-Met Agreement shall have
closed contemporaneously with the Closing of this
Agreement.
9.1.24 Valdosta Remediation. Prior to Closing, Perma-Fix
shall have determined that the cost to remediate the
contamination at the Valdosta, Georgia facility where
Chemical Georgia is located shall not, in the
aggregate, exceed $1,800,000.
9.1.25 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-Con pursuant to the terms of this
Agreement and the acquisition of Chem-Met pursuant to
the terms of the Chem-Met 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-Con shall each provide
reasonable cooperation to BDO Xxxxxxx, LLP and Bovitz
& Co., P.C., to enable them to issue such a letter.
9.1.26 Shareholder Approval. Perma-Fix shareholders shall
have approved the Mergers contemplated by this
Agreement and the Chem-Met Agreement as required under
Delaware law and/or under the requirements of NASDAQ or
the BSE.
9.1.27 Shareholder Approval. The shareholders of Chem-Con
shall have approved the Merger transactions
contemplated by this Agreement pursuant to the laws of
the states of incorporation of Chem-Con and no
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shareholders of Chem-Con shall have exercised or
attempted to exercise dissenters rights or other
similar rights in connection with the transactions
contemplated hereby.
9.1.28 Accountants Letters. Perma-Fix shall have received the
First Accountant Letter and the Second Accountant
Letter and such shall be satisfactory to Perma-Fix.
9.1.29 Employment Agreement. Perma-Fix and TPS shall have
entered into the Employment Agreement.
9.1.30 Officer and Director Waiver. Each officer and director
of Chem-Con and CCC shall have executed and delivered
to Perma-Fix an agreement, in form and substance
satisfactory to Perma-Fix pursuant to which each such
officer and director shall waive any and all rights to
indemnification which any such officer and director may
have from Chem-Con and/or CCC pursuant to Chem-Con's or
CCC's Certificate of Incorporation, Bylaws, any
indemnification agreements, or otherwise.
9.1.31 Fairness Opinion. Prior to the filing of the
Registration Statement with the SEC and within five (5)
days prior to the Closing, Perma-Fix shall have
received a fairness opinion from an investment banker
selected by Perma-Fix that the consideration to be
issued by Perma-Fix under this Agreement and the Chem-
Met Agreement is fair to Perma-Fix and its shareholders
from a financial standpoint, with the form and contents
of such opinion to be satisfactory to Perma-Fix.
9.1.32 Closing Price of Perma-Fix Common Stock. The average
closing sale prices per share of the 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.
9.2 Conditions to Obligations of Chem-Con and The ALS Trust. The
obligation of Chem-Con and the ALS Trust to consummate this
Agreement or to effect the transactions contemplated by this
Agreement shall be subject to the following conditions:
9.2.1 Resolutions of Perma-Fix Board of Directors and
Shareholders. Perma-Fix shall have furnished Chem-Con
with:
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;
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9.2.1.2 Incumbency Certificates for the officers of
Perma-Fix.
9.2.2 Resolutions of Florida Perma-Chem and Georgia Perma-
Chem Board of Directors and Shareholders. Perma-Fix
shall have furnished Chem-Con with:
9.2.2.1 certified copies of resolutions duly adopted by
Florida Perma-Chem and Georgia Perma-Chem 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
Florida Perma-Chem and Georgia Perma-Chem.
9.2.3 Representations and Warranties of Perma-Fix to be True.
Except to the extent waived hereunder, (i) the repre-
sentations and warranties of Perma-Fix, Florida Perma-
Chem and Georgia Perma-Chem 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, Florida Perma-Chem and Georgia Perma-
Chem shall have performed all material obligations and
complied with all material covenants required by this
Agreement to be performed or complied with by it prior
to the Closing. Perma-Fix shall also have delivered to
the ALS Trust a certificate of Perma-Fix, dated the
Closing and signed by its President or a Vice President
to both of the aforementioned effects.
9.2.4 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
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 ALS Trust) since December 31, 1998,
and prior to the date of this Agreement (copies of
which shall have been furnished to Chem-Con, the
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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 considered 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
ALS Trust, Perma-Fix, Chem-Con, or any of their
subsidiaries) an investigation which is pending on the
Closing Date relating to the transactions contemplated
by this Agreement and between the date of this
Agreement and the Closing Date, no action or proceeding
shall have been instituted or, to the knowledge of the
Sullivans, the Xxxxxxxx Trusts, Perma-Fix or Chem-Con,
shall have been threatened before a court or other
governmental body or by any public authority to
restrain or prohibit the transactions contemplated by
this Agreement or to obtain damages in respect thereof.
9.2.8 Opinion of Counsel of Perma-Fix. The ALS Trust shall
have received from Xxxxxx & Xxxxxxx, a Professional
Corporation, counsel to Perma-Fix, or such other
counsel reasonably acceptable to the ALS Trust and its
counsel, an opinion, dated the Closing Date,
substantially in the form of Exhibit "F" hereto, with
the form and content thereof reasonably satisfactory to
Chem-Con and its counsel.
9.2.9 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 Mergers. Except
as otherwise provided in Sections 8.1.1 and 8.29 hereof, this
Agreement and the transactions contemplated hereby may be
terminated at any time before the Closing, whether before or
after approval of this Agreement by the shareholders of Perma-
Fix or Chem-Con, as follows and in no other manner:
9.3.1 Conditions of the Sullivans, the Xxxxxxxx Trusts or
Chem-Con Not Met. By Perma-Fix if, by June 30, 1999,
the conditions set forth in Section 9.1 of this Article
9 shall not have been met (or waived as provided in
Article 10 of this Agreement).
9.3.2 Conditions of Perma-Fix Not Met. By the Sullivans if,
by June 30, 1999, the conditions set forth in Section
9.2 of this Article 9 shall not have been met (or
waived as provided in Article 10 of this Agreement).
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9.3.3 Termination by Perma-Fix or the Sullivans of the Chem-
Met Agreement. By Perma-Fix or by the Sullivans, if
the Chem-Met Agreement is terminated pursuant to the
terms thereof.
9.3.4 Mutual Consent. By the mutual written consent of both
Perma-Fix and Chem-Con.
9.4 Expenses. Each party shall bear its own out-of-pocket
expenses incurred in connection with the transactions
contemplated by this Agreement, including, without limitation,
all legal, accounting, consulting, brokers, advisory, travel,
communications and other similar fees and expenses; provided,
however, that any and all such expenses incurred by Chem-Con
in connection with this Agreement and consummation of the
transactions contemplated by this Agreement shall be
considered as incurred by the ALS Trust and shall be paid by
the ALS Trust.
ARTICLE 10
TERMINATION OF OBLIGATIONS AND WAIVER OF CONDITIONS
10.1 Termination. In the event that this Agreement shall be
terminated pursuant to Section 9.3 hereof, all further
obligations of the parties hereto under this Agreement shall
terminate without further liability of any party to another
and each party hereto will pay its own costs and expenses
incident to its negotiation and preparation of this Agreement
and to its performance and compliance with all agreements and
conditions contained herein on its part to be performed or
complied with, including the fees, expenses and disbursements
of its counsel.
10.2 Waiver. If any of the conditions specified in Section 9.1 of
Article 9 hereof has not been satisfied, Perma-Fix may
nevertheless at the election of Perma-Fix proceed with the
transactions contemplated hereby; and, if any of the condi-
tions specified in Section 9.2 of Article 9 hereof has not
been satisfied, the ALS Trust may nevertheless at the ALS
Trust' election proceed with the transactions contemplated
hereby. Any such election to proceed shall be evidenced by a
certificate executed on behalf of the electing party. Any
such waiver shall not be considered as a waiver of any of the
other terms and provisions of this Agreement by the electing
party.
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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-Con, Florida Perma-Chem, Georgia Perma-Chem 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-Con, Florida Perma-Chem, Georgia
Perma-Chem and each of their officers, directors employees,
agents, representatives and Affiliates incurs or suffers or
may incur or suffer at any time as a result of or in
connection with or arising out of (i) any representation or
warranty made by any of Chem-Con, the Sullivans and/or the
Xxxxxxxx Trusts in this Agreement or any certificate or other
document delivered to Perma-Fix, Florida Perma-Chem or Georgia
Perma-Chem pursuant to this Agreement that is false or
misleading; (ii) any breach of or failure to perform any
agreements, covenants, promises or obligations of Chem-Con,
the Sullivans and/or 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 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-Con knew was pending or threatened against Chem-Con as of
the date hereof or at the Closing Date but failed for any
reason to disclose such in this Agreement or was, directly or
indirectly, caused by or resulted from the knowing or willful
violation by Xxxxxxxx or Chem-Con 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.
11.3 Survival of Representations and Remedies. All representations
and warranties contained in this Agreement shall survive the
Closing, regardless of the investigation made by either party
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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 Agreement
(including the Exhibits and Schedules hereto) shall not be
changed, modified or amended except by a writing signed by
each party to be charged and this Agreement may not be 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.
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.
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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-Con,
the Sullivans and
the Xxxxxxxx Trusts: Xx. Xxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxx Xxxx, Xxxxxxxx 00000
With a copy to: Xxxxx X. X'Xxxxxx, Esq.
X'Xxxxxx & Xxxxx
000 Xxxxxxxx
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxx 00000
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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
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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
FLORIDA PERMA-CHEM, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
_____________________________________
Xx. Xxxxx X. Xxxxxxxxxx
President
GEORGIA PERMA-CHEM, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
_____________________________________
Xx. Xxxxx X. Xxxxxxxxxx
President
CHEMICAL CONSERVATION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
_____________________________________
Xxxxxx X. Xxxxxxxx
President
CHEMICAL CONSERVATION CORPORATION OF
GEORGIA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
_____________________________________
Xxxxxx X. Xxxxxxxx
President
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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
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