-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QR/v3QyS1STmA4B7Og3R5UdFvLvgJ/yMavcnlk7s9/kydz6tcIqZq+EX/2xC7CXR /2K+Rxxcx5iCvgtrPTIUxQ== 0000948600-97-000041.txt : 19970728 0000948600-97-000041.hdr.sgml : 19970728 ACCESSION NUMBER: 0000948600-97-000041 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970714 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970725 SROS: BSE SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERMA FIX ENVIRONMENTAL SERVICES INC CENTRAL INDEX KEY: 0000891532 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 581954497 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11596 FILM NUMBER: 97645634 BUSINESS ADDRESS: STREET 1: 1940 NORTHWEST 67TH PLACE STREET 2: SUITE A CITY: GAINESVILLE STATE: FL ZIP: 32653 BUSINESS PHONE: 3523951351 MAIL ADDRESS: STREET 1: 1940 NW 67TH PL STREET 2: SUITE A CITY: GAINESVILLE STATE: FL ZIP: 32653 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) July 7, 1997 __________________ PERMA-FIX ENVIRONMENTAL SERVICES, INC. _____________________________________________________ (Exact name of registrant as specified in its charter) Delaware 1-11596 58-1954497 ______________ _______________ __________________ (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 1940 N.W. 67th Place, Suite A, Gainesville, FL 32653 ______________________________________________ _________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (352) 373-4200 _______________ Not applicable ____________________________________________________________ (Former name or former address, if changed since last report) Item 5. Other Events. Sale of Series 5 Class E Convertible Preferred Stock. On or about July 14, 1997, Perma-Fix Environmental Services, Inc. (the "Company") issued to the Infinity Fund, L.P. ("Infinity"), 350 shares of newly-created Series 5 Class E Convertible Preferred Stock, par value $.001 per share ("Series 5 Preferred"), at a price of $1,000 per share, for an aggregate sales price of $350,000. The sale to Infinity was made in a private placement under Rule 506 of Regulation D under the Securities Acts of 1933, as amended, pursuant to the terms of a Subscription and Purchase Agreement, dated July 7, 1997, between the Company and Infinity ("Subscription Agreement"). The Company intends to utilize the proceeds received on the sale of Series 5 Preferred for the payment of debt and general working capital. The Series 5 Preferred has a liquidation preference over the Company's common stock, par value $.001 per share ("Common Stock"), equal to $1,000 consideration per outstanding share of Series 5 Preferred (the "Liquidation Value"), plus an amount equal to all unpaid dividends accrued thereon. The Series 5 Preferred accrues dividends on a cumulative basis at a rate of four percent (4%) per annum of the Liquidation Value ("Dividend Rate"), and is payable semi-annually when and as declared by the Board of Directors. No dividends or other distributions may be paid or declared or set aside for payment on the Company's Common Stock until all accrued and unpaid dividends on all outstanding shares of Series 5 Preferred have been paid or set aside for payment. Dividends may be paid, at the option of the Company, in the form of cash or Common Stock of the Company. If the Company pays dividends in Common Stock, such is payable in the number of shares of Common Stock equal to the product of (a) the quotient of (i) the Dividend Rate divided by (ii) the average of the closing bid quotation of the Common Stock as reported on the NASDAQ for the five trading days immediately prior to the date the dividend is declared, multiplied by (b) a fraction, the numerator of which is the number of days elapsed during the period for which the dividend is to be paid and the denominator of which is 365. The holder of the Series 5 Preferred may convert into Common Stock up to 175 shares of the Series 5 Preferred on and after November 3, 1997, and the remaining 175 shares of the Series 5 Preferred on and after December 3, 1997. The conversion price per share is the lesser of (a) the product of the average closing bid quotation for the five (5) trading days immediately preceding the conversion date multiplied by 80% or (b) $1.6875. The minimum conversion price is $.75, which minimum will be eliminated from and after September 6, 1998. If the average closing bid quotation for the five trading days immediately preceding the conversion of the Series 5 Preferred equals or exceeds $2.11, the holder will have the right to convert the Series 5 Preferred into approximately 207,400 shares of Common Stock. The Company will have the option to redeem the shares of Series 5 Preferred (a) between July 14, 1998, and July 13, 2001, at a redemption price of $1,300 per share if at any time the average closing bid price of the Common Stock for ten consecutive trading days is in excess of $4.00, and (b) after July 13, 2001, at a redemption price of $1,000 per share. The holder of the Series 5 Preferred will have the option to convert the Series 5 Preferred prior to redemption by the Company. -2- On June 30, 1997, the Company entered into a Stock Purchase Agreement ("Centofanti Agreement") with Dr. Louis F. Centofanti, currently the President, Chief Executive Officer, Chairman of the Board, and Director of the Company, whereby the Company sold, and Dr. Centofanti purchased, 24,381 shares of the Company's Common Stock. The sale to Dr. Centofanti was made in a private placement under Rule 506 of Regulation D under the Securities Act of 1933, as amended. The purchase price was $1.6406 per share representing 75% of the $2.1875 closing bid price of the Common Stock as quoted on the NASDAQ on the date that Dr. Centofanti notified the Company of his desire to purchase such shares. Pursuant to the terms of the Centofanti Agreement, Dr. Centofanti paid the Company the aggregate purchase price of $40,000 for the 24,381 shares of Common Stock. The sale of the 24,381 shares and the terms of the Centofanti Agreement were authorized by the Company's Board of Directors. Item 7. Financial Statements and Exhibits. (c) Exhibits. 4.1 Subscription and Purchase Agreement, dated July 7, 1997, between the Company and The Infinity Fund, L.P. 4.2 Certificate of Designations of Series 5 Class E Convertible Preferred Stock, dated July 14, 1997. 4.3 Specimen copy of Series 5 Class E Convertible Preferred Stock certificate. 4.4 Stock Purchase Agreement, dated June 30, 1997, between the Company and Dr. Louis F. Centofanti. 4.5 Stock Purchase Agreement, dated June 30, 1997, between the Company and Steve Gorlin. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: July 25, 1997. PERMA-FIX ENVIRONMENTAL SERVICES, INC. By: /s/ Richard T. Kelecy ____________________________ Richard T. Kelecy Chief Financial Officer -3- MBEN:\N-P\PESI\8K\797\8K797.EDG EX-4 2 EXHIBIT 4.1 SUBSCRIPTION AGREEMENT SUBSCRIPTION AND PURCHASE AGREEMENT for 350 SHARES OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK, PAR VALUE $.001 PER SHARE of PERMA-FIX ENVIRONMENTAL SERVICES, INC. (a Delaware corporation) July 7, 1997 TABLE OF CONTENTS Page 1. Subscription for Purchase of Series 5 Preferred Stock . . . . . . . 2 1.1 Sale and Purchase. . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Reporting Company. . . . . . . . . . . . . . . . . . . . . . . 2 1.3 Terms of the Series 5 Preferred Stock. . . . . . . . . . . . . 3 2. Payment of Purchase Price; Delivery of Securities . . . . . . . . . 3 2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2 Purchase Price and Payment . . . . . . . . . . . . . . . . . . 3 2.3 Restrictive Legends. . . . . . . . . . . . . . . . . . . . . . 3 3. Representations, Warranties and Covenants of Subscriber . . . . . . 3 3.1 Investment Intent. . . . . . . . . . . . . . . . . . . . . . . 4 3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.3 Prior Investment Experience. . . . . . . . . . . . . . . . . . 5 3.4 No Review by the SEC . . . . . . . . . . . . . . . . . . . . . 5 3.5 Not Registered . . . . . . . . . . . . . . . . . . . . . . . . 5 3.6 No Public Market . . . . . . . . . . . . . . . . . . . . . . . 5 3.7 Sophisticated Investor . . . . . . . . . . . . . . . . . . . . 6 3.8 SEC Filing . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.9 Documents, Information and Access. . . . . . . . . . . . . . . 6 3.10 No Registration, Review or Approval. . . . . . . . . . . . . . 7 3.11 Transfer Restrictions. . . . . . . . . . . . . . . . . . . . . 7 3.12 Trading Activity . . . . . . . . . . . . . . . . . . . . . . . 7 3.13 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.14 Accuracy or Representations and Warranties . . . . . . . . . . 8 3.15 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.16 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4. Representations, Warranties and Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.1 Organization, Authority, Qualification . . . . . . . . . . . . 9 4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 9 4.3 Ownership of, and Title to, Securities . . . . . . . . . . . . 9 4.4 Exemption from Registration. . . . . . . . . . . . . . . . . . 9 4.5 Use of Proceeds from this Offering . . . . . . . . . . . . . . 9 5. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . 10 5.1 Registration . . . . . . . . . . . . . . . . . . . . . . . . . 10 5.2 Current Registration Statement . . . . . . . . . . . . . . . . 10 5.3 Other Provisions . . . . . . . . . . . . . . . . . . . . . . . 11 5.4 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5.5 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 11 6. Indemnification.. . . . . . . . . . . . . . . . . . . . . . . . . . 11 6.1 By the Company . . . . . . . . . . . . . . . . . . . . . . . . 11 6.2 By the Subscriber. . . . . . . . . . . . . . . . . . . . . . . 12 6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7. Securities Legends and Notices. . . . . . . . . . . . . . . . . . . 13 8. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 8.1 Amendment; Waiver. . . . . . . . . . . . . . . . . . . . . . . 14 8.2 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 14 8.3 Governing Law; Litigation Costs. . . . . . . . . . . . . . . . 14 8.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 15 8.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 8.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 15 8.7 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . 15 8.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 15 8.9 Authority; Enforceability. . . . . . . . . . . . . . . . . . . 15 8.10 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 8.11 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . 16 8.12 Public Announcements . . . . . . . . . . . . . . . . . . . . . 16 Exhibit "A" - Certificate of Designations -ii- SUBSCRIPTION AND PURCHASE AGREEMENT for 350 SHARES OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK, PAR VALUE $.001 PER SHARE of PERMA-FIX ENVIRONMENTAL SERVICES, INC. (a Delaware corporation) THIS SUBSCRIPTION AND PURCHASE AGREEMENT (the "Agreement") is dated as of the 3rd day of July, 1997, by and between PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware corporation, having offices at 1940 Northwest 67th Place, Gainesville, Florida 32653 (the "Company"), and THE INFINITY FUND, L.P., a Georgia limited partnership, and having its principal offices at 3 Piedmont Center, Suite 210, Atlanta, Georgia 30305 (the "Subscriber"). W I T N E S S E T H: WHEREAS, the Subscriber and the Company have arranged for the Agreement to provide for the subscription and, if such subscription as set forth in this Agreement is accepted by the Company, the purchase by the Subscriber, on the terms and subject to the conditions set forth in this Agreement, of an aggregate of 350 shares of a new series of convertible preferred stock, par value $.001 per share, to be designated by the Company's Board of Directors as "Series 5 Class E Convertible Preferred Stock" (the "Series 5 Preferred Stock"), with such Series 5 Preferred Stock containing such terms, conditions, restrictions and provisions as set forth in the Certificate of Designations attached hereto as Exhibit "A;" WHEREAS, the Company's Common Stock is listed for trading on the Boston Stock Exchange and the National Association of Securities Dealers Automated Quotation system ("NASDAQ"), and the Company is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and has been subject to such filing requirements for the past ninety (90) days; WHEREAS, the Subscriber is an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"); WHEREAS, the principal place of business of the Subscriber is located in Atlanta, Georgia; WHEREAS, in order to induce the Subscriber to enter into this Agreement and to subscribe for and purchase the Securities on the terms and subject to the conditions hereof, the Company is granting certain registration rights under the Agreement with respect to the Common Stock issuable upon the conversion of the Series 5 Preferred Stock; WHEREAS, in reliance upon the representations made by the Subscriber in this Agreement, the transactions contemplated by this Agreement are such that the offer and sale of the Series 5 Preferred Stock by the Company hereunder will be exempt from registration under applicable federal and state (U. S.) securities laws since this is a private placement and intended to be a nonpublic offering pursuant to Sections 4(2) and/or 3(b) of the Securities Act and/or Regulation D promulgated under the Securities Act; and, WHEREAS, the Series 5 Preferred Stock to be sold in accordance with this Agreement will not be quoted or listed for trading on any securities exchange, organized market or quotation system at the time of acquisition hereunder. NOW, THEREFORE, for and in consideration of the premises, and the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Subscription for Purchase of Series 5 Preferred Stock. 1.1 Sale and Purchase. On the basis of the representations, warranties, covenants and agreements, and subject to the terms and conditions set forth herein, on the Closing Date, the Company agrees to sell, transfer, convey and deliver to the Subscriber, and the Subscriber agrees to purchase, acquire and accept delivery from the Company, three hundred fifty (350) shares of the Series 5 Preferred Stock for an aggregate purchase price of Three Hundred Fifty Thousand Dollars ($350,000) ("Purchase Price"). 1.2 Reporting Company. Although the Series 5 Preferred Stock and the shares of Common Stock issuable upon conversion of the Series 5 Preferred Stock (the "Conversion Shares") shall not be registered as of the Closing under federal or state securities laws or any rules or regulations promulgated thereunder, the Company is a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and has filed with the Securities and Exchange Commission (the "SEC") all reports required to be filed by the Company under Section 13 or 15(d) of the Exchange Act. The Subscriber has had the opportunity to review, and has reviewed, all such reports and information which the Subscriber deemed material to an investment decision regarding the purchase of the Securities. -2- 1.3 Terms of the Series 5 Preferred Stock. The Series 5 Preferred Stock shall contain and be subject to the terms, conditions, preferences and restrictions set forth in the Certificate of Designations attached hereto as Exhibit "A" ("Certificate of Designations"). 2. Payment of Purchase Price; Delivery of Securities. 2.1 Closing. The consummation of this Agreement (the "Closing") will occur on July 3, 1997 (the "Closing Date"), at the offices of the Company or at such other mutually convenient time or at such other mutually convenient place as agreed upon by the parties. 2.2 Purchase Price and Payment. At the Closing, the Subscriber shall deliver to the Company the Purchase Price, in cash by wire transfer. Upon receipt by the Company of the Purchase Price, the Company shall cause to be delivered: (a) to the Subscriber, c/o Bear Stearns & Co., 55 Water Street, Third Floor, Concourse Level, South Building, New York, New York 10040-0082, a certificate or certificates representing the 350 shares of Series 5 Preferred Stock purchased by the Subscriber, in such denominations as Subscriber requests in writing, and (b) to the Subscriber, written evidence from the Secretary of State of the State of Delaware that the Certificate of Designations has been filed in the Office of the Secretary of State of the State of Delaware on or before the Closing Date. 2.3 Restrictive Legends. Subscriber agrees that, subject to the provisions of Section 5 below, all certificates representing the Series 5 Preferred Stock shall bear the restrictive legend substantially in the form set forth in Section 7 below which shall include, but not be limited to, a legend to the effect that (a) the Series 5 Preferred Stock represented by such certificate has not been registered under the Securities Act, and (b) unless there is an effective registration statement relating to the Series 5 Preferred Stock and the Conversion Shares, neither the Series 5 Preferred Stock nor the Conversion Shares may be offered, sold, transferred, mortgaged, pledged or hypothecated without an exemption from registration and an opinion of counsel to the Company with respect thereto, or an opinion from counsel for the Subscriber, which opinion is satisfactory to the Company, to the effect that registration under the Act is not required in connection with such sale or transfer and the reasons therefor. The legend on all such certificates shall make reference to the registration rights set forth in Section 5 hereof. 3. Representations, Warranties and Covenants of Subscriber. The Subscriber hereby represents, warrants and covenants to the Company as follows: -3- 3.1 Investment Intent. The Subscriber represents and warrants that the Series 5 Preferred Stock is being, and any underlying Conversion Shares will be, purchased or acquired solely for the Subscriber's own account, for investment purposes only and not with a view toward the distribution or resale to others. The Subscriber acknowledges, understands and appreciates that the Series 5 Preferred Stock has not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act which depends, in large part, upon the Subscriber's representations as to investment invention, investor status, and related and other matters set forth herein. Subscriber understands that, in the view of the United States Securities and Exchange Commission (the "SEC"), among other things, a purchase now with an intent to distribute or resell would represent a purchase and acquisition with an intent inconsistent with its representation to the Company, and the SEC might regard such a transfer as a deferred sale for which the registration exemption is not available. 3.2 Certain Risk. The Subscriber recognizes that the purchase of the Series 5 Preferred Stock involves a high degree of risk in that (a) the Company has sustained losses through March 31, 1997, from its operations, and may require substantial funds in addition to the proceeds of this private placement; (b) that the Company has a substantial accumulated deficit; (c) an investment in the Company is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company and the Series 5 Preferred Stock; (d) an investor may not be able to liquidate his investment; (e) transferability of the Series 5 Preferred Stock is extremely limited; (f) in the event of a disposition an investor could sustain the loss of his entire investment; (g) the Series 5 Preferred Stock represents non-voting equity securities, and the right to convert into and purchase shares of voting equity securities in a corporate entity that has an accumulated deficit; (h) no return on investment, whether through distributions, appreciation, transferability or otherwise, and no performance by, through or of the Company, has been promised, assured, represented or warranted by the Company, or by any director, officer, employee, agent or representative thereof; and, (i) while the Common Stock is presently quoted and traded on the Boston Stock Exchange and the Nasdaq SmallCap Market and while the Subscriber is a beneficiary of certain registration rights provided herein, the Series 5 Preferred Stock subscribed for and that is purchased under this Agreement and the Conversion Shares (i) are not registered under applicable federal or state securities laws, and thus may not be sold, conveyed, assigned or transferred unless registered under such laws or unless an exemption from registration is available under such laws, as more fully described herein, and (ii) the Series 5 Preferred Stock subscribed for and that is to be purchased under this Agreement is not quoted, -4- traded or listed for trading or quotation on the NASDAQ, or any other organized market or quotation system, and there is therefore no present public or other market for the Series 5 Preferred Stock, nor can there be any assurance that the Common Stock of the Company will continue to be quoted, traded or listed for trading or quotation on the Boston Stock Exchange or the Nasdaq SmallCap Market or on any other organized market or quotation system. 3.3 Prior Investment Experience. The Subscriber acknowledges that it has prior investment experience, including investment in non-listed and non-registered securities, or has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company to it and to evaluate the merits and risks of such an investment on its behalf, and that it recognizes the highly speculative nature of this investment. 3.4 No Review by the SEC. The Subscriber hereby acknowledges that this offering of the Series 5 Preferred Stock has not been reviewed by the SEC because this private placement is intended to be a nonpublic offering pursuant to Sections 4(2) and/or 3(b) of the Securities Act and/or Regulation D promulgated under the Securities Act. 3.5 Not Registered. The Subscriber understands that the Series 5 Preferred Stock and the Conversion Shares have not been registered under the Securities Act by reason of a claimed exemption under the provisions of the Securities Act which depends, in part, upon the Subscriber's investment intention. In this connection, the Subscriber understands that it is the position of the SEC that the statutory basis for such exemption would not be present if its representation merely meant that its present intention was to hold such securities for a short period, such as the capital gains period of tax statutes, for a deferred sale, for a market rise (assuming that a market develops), or for any other fixed period. 3.6 No Public Market. The Subscriber understands that there is no public market for the Series 5 Preferred Stock. The Subscriber understands that although there is presently a public market for the Common Stock, including the Common Stock issuable upon conversion of the Series 5 Preferred Stock, Rule 144 (the "Rule") promulgated under the Securities Act requires, among other conditions, a one-year holding period following full payment of the consideration therefor prior to the resale (in limited amounts) of securities acquired in a nonpublic offering without having to satisfy the registration requirements under the Securities Act. The Subscriber understands that the Company makes no representation or warranty regarding its fulfillment in the future of any reporting requirements under the Exchange Act, or its dissemination to the public of any current financial or other information concerning the Company, as is required by the Rule as one of the conditions of its availability. The Subscriber -5- understands and hereby acknowledges that the Company is under no obligation to register the Series 5 Preferred Stock or the Conversion Shares under the Securities Act, except as set forth in Section 5 hereof. The Subscriber agrees to hold the Company and its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by the Subscriber contained herein or any sale or distribution by the Subscriber in violation of the Securities Act or any applicable state securities or "blue sky" laws (collectively, "Securities Laws"). 3.7 Sophisticated Investor. That (a) the Subscriber is an "accredited investor," as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act, and has total assets in excess of $5,000,000; (b) the Subscriber has adequate means of providing for the Subscriber's current financial needs and possible contingencies and has no need for liquidity of the Subscriber's investment in the Series 5 Preferred Stock; (c) the Subscriber is able to bear the economic risks inherent in an investment in the Series 5 Preferred Stock and that an important consideration bearing on its ability to bear the economic risk of the purchase of Series 5 Preferred Stock is whether the Subscriber can afford a complete loss of the Subscriber's investment in the Series 5 Preferred Stock and the Subscriber represents and warrants that the Subscriber can afford such a complete loss; and (d) the Subscriber has such knowledge and experience in business, financial, investment and banking matters (including, but not limited to, investments in restricted, non-listed and non-registered securities) that the Subscriber is capable of evaluating the merits, risks and advisability of an investment in the Series 5 Preferred Stock. 3.8 SEC Filing. The Subscriber acknowledges that it has been previously furnished with true and complete copies of the following documents which have been filed with the SEC pursuant to Sections 13(a), 14(a), 14(c) or 15(d) of the Exchange Act since January 1, 1997, and that such have been furnished to the Subscriber a reasonable time prior to the date hereof: (a) the Company's Form 10-K for the year ended December 31, 1996; (b) the Company's Form 10-Q for the quarter ended March 31, 1997, and (c) the Company's Form 8-K, date of event reported: June 11, 1997, as amended by the Company's Form 8-K/A, dated June 25, 1997. 3.9 Documents, Information and Access. The Subscriber's decision to purchase the Series 5 Preferred Stock is not based on any promotional, marketing or sales materials, and the Subscriber and its representatives have been afforded, prior to purchase thereof, the opportunity to ask questions of, and to receive answers from, the Company and its management, and has had access to all -6- documents and information which Subscriber deems material to an investment decision with respect to the purchase of Series 5 Preferred Stock hereunder. 3.10 No Registration, Review or Approval. The Subscriber acknowledges and understands that the private offering and sale of Series 5 Preferred Stock pursuant to this Agreement has not been reviewed or approved by the SEC or by any state securities commission, authority or agency, and is not registered under the Securities Laws. The Subscriber acknowledges, understands and agrees that the Series 5 Preferred Stock is being offered and sold hereunder pursuant to (i) a private placement exemption to the registration provisions of the Securities Act pursuant to Section 3(b) and/or Section 4(2) of such Securities Act and/or Regulation D promulgated under the Securities Act) and (ii) a similar exemption to the registration provisions of applicable state securities laws. 3.11 Transfer Restrictions. That Subscriber will not transfer any Series 5 Preferred Stock purchased under this Agreement or any Conversion Shares acquired upon conversion of the Series 5 Preferred Stock unless such Series 5 Preferred Stock or the Conversion Shares, whichever is applicable, is registered under the Securities Laws, or unless an exemption is available under such Securities Laws, and the Company may, if it chooses, where an exemption from registration is claimed by such Subscriber, condition any transfer of Series 5 Preferred Stock or Conversion Shares out of the Subscriber's name on an opinion of the Company's counsel, to the effect that the proposed transfer is being effected in accordance with, and does not violate, an applicable exemption from registration under the Securities Laws, or an opinion of counsel to the Subscriber, which opinion is satisfactory to the Company, to the effect that registration under the Securities Act is not required in connection with such sale or transfer and the reasons therefor. 3.12 Trading Activity. The Subscriber expressly agrees that until such time that it has sold all of the Series 5 Preferred Stock and/or all of the Conversion Shares that it shall not, directly or indirectly, through an affiliate (as that term is defined under Rule 405 promulgated under the Securities Act) or by, with or through an unrelated third party or entity, whether or not pursuant to a written or oral understanding, agreement, arrangement, scheme, or artifice of nature whatsoever, engage in the short selling of the Company's -7- Common Stock or any other equity securities of the Company, whether now existing or hereafter issued, or engage in any other activity of any nature whatsoever that has the same effect as a short sale, or is a de facto or de jure short sale, of the Company's Common Stock or any other equity security of the Company, whether now existing or hereafter issued, including, but not limited to, the sale of any rights pursuant to any understanding, agreement, arrangement, scheme or artifice of any nature whatsoever, whether oral or in writing, relative to the Company's Common Stock or any other equity securities of the Company whether now existing or hereafter created. The Subscriber agrees that it will not engage, and will cause its affiliates not to engage, in any activity designed to reduce the price of the Company's Common Stock, as quoted on the Boston Stock Exchange or the NASDAQ, in connection with the Subscriber's conversion of any of the Series 5 Preferred Stock. The Subscriber agrees to refrain, and cause its affiliates to refrain, from engaging in, or inducing others to engage in, any activity relating to the Company or Common Stock of the Company that is proscribed under Regulation M promulgated under the Exchange Act. 3.13 Reliance. The Subscriber understands and acknowledges that the Company is relying upon all of the representations, warranties, covenants, understandings, acknowledgements and agreements contained in this Agreement in determining whether to accept this subscription and to sell and issue the Series 5 Preferred Stock to the Subscriber. 3.14 Accuracy or Representations and Warranties. All of the representations, warranties, understandings and acknowledgments that Subscriber has made herein are true and correct in all material respects as of the date of execution hereof. The Subscriber will perform and comply fully in all material respects with all covenants and agreements set forth herein, and the Subscriber covenants and agrees that until the acceptance of this Agreement by the Company, the Subscriber shall inform the Company immediately in writing of any changes in any of the representations or warranties provided or contained herein. 3.15 Indemnity. The Subscriber hereby agrees to indemnify and hold harmless the Company, and the Company's successors and assigns, from, against and in all respects of any demands, claims, actions or causes of action, assessments, liabilities, losses, costs, damages, penalties, charges, fines or expenses (including, without limitation, interest, penalties, and attorney and accountants' fees, disbursements and expenses), arising out of or relating to any breach by Subscriber of any representations, warranty, covenant or agreement made by Subscriber in this Agreement. Such right to indemnification shall be in addition to any and all other rights of the Company under this Agreement or otherwise, at law or in equity. 3.16 Survival. The Subscriber expressly acknowledges and agrees that all of its representations, warranties, agreements and covenants set forth in this Agreement shall be of the essence hereof and shall survive the execution, delivery and Closing of this Agreement, the sale and purchase of the Series 5 Preferred Stock, the conversion of the Series 5 Preferred Stock, and the sale of the Conversion Shares. -8- 4. Representations, Warranties and Covenants of the Company. In order to induce Subscriber to enter into this Agreement and to purchase the Series 5 Preferred Stock, the Company hereby represents, warrants and covenants to Subscriber as follows: 4.1 Organization, Authority, Qualification. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The Company has full corporate power and authority to own and operate its properties and assets and to conduct and carry on its business as it is now being conducted and operated. 4.2 Authorization. The Company has full power and authority to execute and deliver this Agreement and to perform its obligations under and consummate the transactions contemplated by this Agreement. Upon the execution of this Agreement by the Company and delivery of the Series 5 Preferred Stock, this Agreement shall have been duly and validly executed and delivered by the Company and shall constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 4.3 Ownership of, and Title to, Securities. The Series 5 Preferred Stock to be purchased by the Subscriber is, and all Conversion Shares, when issued, will be, duly authorized, validly issued, fully paid and nonassessable shares of the capital stock of the Company, free of personal liability. Upon consummation of the purchase of the Series 5 Preferred Stock (and upon the conversion of the Series 5 Preferred Stock, in whole or in part) pursuant to this Agreement, the Subscriber will own and acquire title to the Series 5 Preferred Stock (and the Conversion Shares) free and clear of any and all proxies, voting trusts, pledges, options, restrictions, or other legal or equitable encumbrance of any nature whatsoever (other than the restrictions on transfer due to Securities Laws or as otherwise provided for in this Agreement or the Certificate of Designation). 4.4 Exemption from Registration. The offer and sale of Series 5 Preferred Stock to the Subscriber in accordance with the terms and provisions of this Agreement is being effected in accordance with the Securities Act, pursuant to a private placement exemption to the registration provisions of the Act pursuant to Section 3(b) and/or 4(2) of such Act and/or Regulation D promulgated under such Act, based on the representations, warranties and covenants made by the Subscriber contained in this Agreement. 4.5 Use of Proceeds from this Offering. The net proceeds from the sale of the Series 5 Preferred Stock are estimated to be approximately $345,000 after payment of legal fees and expenses of approximately $5,000, but prior to any fees and expenses relating to the registration of the Conversion Shares pursuant to the -9- terms of Section 5 hereof. The Company intends to utilize the net proceeds to reduce outstanding debt and for general working capital. 5. Registration Rights. In order to induce the Subscriber to enter into this Agreement and purchase the Series 5 Preferred Stock, the Company hereby covenants and agrees to grant to the Subscriber the rights set forth in this Section 5 with respect to the registration of the Conversion Shares. 5.1 Registration. Subject to the terms of Section 5 hereof, the Company agrees that within thirty (30) days after the Closing Date, it shall prepare and file with the SEC, a registration statement on Form S-3 or equivalent form (the "Registration Statement") and such other documents, including a prospectus, as may be necessary in the opinion of counsel for the Company in order to comply with the provisions of the Securities Act, so as to permit a public offering and sale by the Subscriber of up to 200,000 shares of Common Stock issuable upon conversion of the Series 5 Preferred Stock, plus up to 36,000 shares of Common Stock, if any, issuable as payment of dividends on the Series 5 Preferred Stock pursuant to the terms of the Series 5 Preferred Stock. The Company shall use its reasonable efforts to cause such Registration Statement to become effective at the earliest possible date after filing. In connection with the offering of such Common Stock registered pursuant to this Section 5, the Company shall take such reasonable actions, as it deems necessary, to qualify the Common Stock issuable upon conversion of the Series 5 Preferred Stock, plus the Common Stock issuable as payment of dividends on the Series 5 Preferred Stock, covered by such Registration Statement under such "blue sky" or other state securities laws for offer and sale as shall be reasonably necessary to permit the public offering and sale of such shares of Common Stock covered by such Registration Statement; provided, however, that the Company shall not be required (a) to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (b) to subject itself to taxation in any such jurisdiction, or (c) to consent to general service of process in any such jurisdiction. It is expressly agreed that in no event are any registration rights being granted to the Series 5 Preferred Stock itself, but only with respect to up to 200,000 shares of the underlying Conversion Shares issuable upon exercise of the Series 5 Preferred Stock, plus up to 36,000 shares of Common Stock that the Company may issue in payment of dividends on the Series 5 Preferred Stock. 5.2 Current Registration Statement. Once effective, the Company shall use its reasonable efforts to cause such Registration Statement filed hereunder to remain current and effective for a period of two (2) years or until the Conversion Shares covered by such Registration Statement are sold by the Subscriber, whichever is sooner. The -10- Subscriber shall promptly provide all such information and materials and take all such action as may be required in order to permit the Company to comply with all applicable requirements of the SEC and to obtain any desired acceleration of the effective date of such registration statement. 5.3 Other Provisions. In connection with the offering of any Conversion Shares registered pursuant to this Section 5, the Company shall furnish to the Subscriber such number of copies of any final prospectus as it may reasonably request in order to effect the offering and sale of the Conversion Shares to be offered and sold under such Registration Statement. In connection with any offering of Conversion Shares registered pursuant to this Section 5, the Company shall (a) furnish to the underwriters (if any), at the Company's expense, unlegended certificates representing ownership of the Conversion Shares sold under such Registration Statement in such denominations as requested and (b) instruct any transfer agent and registrar of the Conversion Shares sold under such Registration Statement to release immediately any stop transfer order, and to remove any restrictive legend, with respect to such Conversion Shares included in any registration becoming effective pursuant to this Agreement upon the sale of such shares by the Subscriber. 5.4 Costs. Subject to the immediately following sentence, the Company shall in all events pay and be responsible for all fees, expenses, costs and disbursements associated with the Registration Statement relating to the Conversion Shares under this Section 5, including filing fees, fees, costs and disbursements of any counsel, accountants and other consultants representing the Company in connection therewith. Notwithstanding anything set forth herein to the contrary, Subscriber shall be responsible for and pay any and all underwriting discounts and commissions in connection with the sale of the Conversion Shares pursuant hereto or the Registration Statement and all fees of its legal counsel and other advisors retained in connection with reviewing such Registration Statement. 5.5 Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business, properties, stock or assets of the Company, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 6. Indemnification. 6.1 By the Company. Subject to the terms of this Section 6, the Company will indemnify and hold harmless the Subscriber, its directors and officers, and any underwriter (as defined in the Securities Act) for the -11- Subscriber and each person, if any, who controls the Subscriber or such underwriter within the meaning of the Act, from and against, and will reimburse the Subscriber and each such underwriter and controlling person with respect to, any and all loss, damage, liability, cost and expense to which such holder or any such underwriter or controlling person may become subject under the Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement filed with the SEC pursuant to Section 5, any prospectus contained therein or any amendment or supplement thereto, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made not misleading; provided, however, that the Company will not be liable in any such case to the extent that any such loss, damage, liability, cost or expense arises out of, or is based upon, an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by the Subscriber, such underwriter or such controlling person in writing specifically for use in the preparation thereof. 6.2 By the Subscriber. Subject to the terms of this Section 6, the Subscriber will indemnify and hold harmless the Company, its directors and officers, any controlling person and any underwriter from and against, and will reimburse the Company, its directors and officers, any controlling person and any underwriter with respect to, any and all loss, damage, liability, cost or expense to which the Company or any controlling person and/or any underwriter may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained in such Registration Statement filed with the SEC pursuant to Section 5, any prospectus contained therein or any amendment or supplement thereto, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon, and in strict conformity with, written information furnished by, or on behalf of, the Subscriber specifically for use in the preparation thereof. 6.3 Procedure. Promptly after receipt by an indemnified party pursuant to the provisions of Section 6.1 or 6.2 of notice of the commencement of any action involving the subject matter of the foregoing indemnity provisions, such indemnified party will, if a claim thereof is to be made against the indemnifying party pursuant to the provisions of Section 6.1 or 6.2, promptly notify the -12- indemnifying party of the commencement thereof; but the omission to so notify the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party otherwise than hereunder. In case such action is brought against any indemnified party and the indemnified party notifies the indemnifying party of the commencement thereof, the indemnifying party shall have the right to participate in, and, to the extent that it may wish, assume the defense thereof; or, if there is a conflict of interest which would prevent counsel for the indemnifying party from also representing the indemnified party, the indemnified parties have the right to select only one (1) separate counsel to participate in the defense of such action on behalf of all such indemnified parties. After notice from the indemnifying parties to such indemnified party of the indemnifying parties' election so to assume the defense thereof, the indemnifying parties will not be liable to such indemnified parties pursuant to the provisions of said Section 6.1 or 6.2 for any legal or other expense subsequently incurred by such indemnified parties in connection with the defense thereof, other than reasonable costs of investigation, unless (a) the indemnified parties shall have employed counsel in accordance with the provisions of the preceding sentence; (b) the indemnifying parties shall not have employed counsel satisfactory to the indemnified parties to represent the indemnified parties within a reasonable time after the notice of the commencement of the action or (c) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying parties. 7. Securities Legends and Notices. Subscriber represents and warrants that it has read, considered and understood the following legends, and agrees that such legends, substantially in the form and substance set forth below, shall be placed on all of the certificates representing the Series 5 Preferred Stock: Series 5 Preferred Stock Legends NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS PREFERRED STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS PREFERRED STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL -13- SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM. NOTWITHSTANDING THE FOREGOING, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS PREFERRED STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT CERTAIN SUBSCRIPTION AND PURCHASE AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED JULY 7, 1997, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE. 8. Miscellaneous. 8.1 Amendment; Waiver. This Agreement shall not be changed, modified or amended in any respect except by the mutual written agreement of the parties hereto. Any provision of this Agreement may be waived in writing by the party which is entitled to the benefits thereof. No waiver of any provision of this Agreement shall be deemed to, or shall constitute a waiver of, any other provision hereof or thereof (whether or not similar), nor shall nay such waiver constitute a continuing waiver. 8.2 Binding Effect; Assignment. Neither this Agreement nor any rights or obligations hereunder are assignable by the Subscriber. 8.3 Governing Law; Litigation Costs. This Agreement and its validity, construction and performance shall be governed in all respects by the internal laws of the State of Delaware without giving effect to such State's conflicts of laws provisions. Each of the Company and the Subscriber expressly and irrevocably consent to the jurisdiction and venue of the federal courts located in Wilmington, Delaware. Each of the parties agrees that in the event either party brings an action to enforce any of the provisions of this Agreement or to recovery for an alleged breach of any of the provisions of this Agreement, each party shall be responsible for its own legal costs and disbursements during the pendency of any such action; provided, however, that after any such action has been reduced to a final, unappealable judgment, the prevailing party shall be entitled to recover from the other party all reasonable, documented attorneys' fees and disbursements and court costs from the other party. -14- 8.4 Severability. Any term or provisions of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof affecting the validity or enforceability of such provision in any other jurisdiction. 8.5 Headings. The captions, headings and titles preceding the text of each or any Section, subsection or paragraph hereof are for convenience of reference only and shall not affect the construction, meaning or interpretation of this Agreement or any term or provisions hereof. 8.6 Counterparts. This Agreement may be executed in one or more original or facsimile counterparts, each of which shall be deemed an original and all of which shall be considered one and the same agreement, binding on all of the parties hereto, notwithstanding that all parties are not signatories to the same counterpart. Upon delivery of an executed counterpart by the undersigned Subscriber to the Company, which in turn is executed and delivered by the Company, this Agreement shall be binding as one original agreement between Subscriber and the Company. 8.7 Transfer Taxes. Each party hereto shall pay all such sales, transfer, use, gross receipts, registration and similar taxes arising out of, or in connection with, the transactions contemplated by this Agreement (collectively, the "Transfer Taxes") as are payable by such party under applicable law, and the Company shall pay the cost of any documentary stock transfer stamps, if any, to be affixed to the certificates representing the Series 5 Preferred Stock to be sold. 8.8 Entire Agreement. This Agreement, along with the Certificate of Designations, merges and supersedes any and all prior agreements, understandings, discussions, assurances, promises, representations or warranties among the parties with respect to the subject matter hereof, and contains the entire agreement among the parties with respect to the subject matter set forth herein and therein. 8.9 Authority; Enforceability. The Subscriber is duly authorized to enter into this Agreement and to perform all of its obligations hereunder. Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall be enforceable against the Subscriber in accordance with its terms. 8.10 Notices. Except as otherwise specified herein to the contrary, all notices, requests, demands and other communications required or desired to be given hereunder shall only be effective if given in writing, by hand or by fax, by certified or registered mail, return receipt requested, postage prepaid, or by U. S. Express Mail -15- service, or by private overnight mail service (e.g., Federal Express). Any such notice shall be deemed to have been given (i) on the business day actually received if given by hand or by fax, (ii) on the business day immediately subsequent to mailing, if sent by U.S. Express Mail service or private overnight mail service, or (iii) five (5) business days following the mailing thereof, if mailed by certified or registered mail, postage prepaid, return receipt requested, and all such notices shall be sent to the following addresses (or to such other address or addresses as a party may have advised the other in the manner provided in this Section 8.11: If to the Company: Dr. Louis F. Centofanti Perma-Fix Environmental Services, Inc. 1940 Northwest 67th Place Gainesville, Florida 32653 Fax No.: (352) 373-0040 with copies Irwin H. Steinhorn, Esquire simultaneously Conner & Winters by like means to: One Leadership Square, Suite 1700 211 North Robinson Oklahoma City, Oklahoma 73102 Fax No.: (405) 232-2695 If to the The Infinity Fund, L.P. Subscriber: 3 Piedmont Center, Suite 210 Atlanta, Georgia 30305 Attention: Mr. Barry Pearl Fax No.: (404) 231-1375 8.11 No Third Party Beneficiaries. This Agreement and the rights, benefits, privileges, interests, duties and obligations contained or referred to herein shall be solely for the benefit of the parties hereto and no third party shall have any rights or benefits hereunder as a third party beneficiary or otherwise hereunder. 8.12 Public Announcements. Neither Subscriber nor any officer, director, stockholder, employee, affiliate or affiliated person or entity of Subscriber, shall make or issue any press releases or otherwise make any public statements or make any disclosures to any third person or entity with respect to the transactions contemplated herein and will not make or issue any press releases or otherwise make any public statements of any nature whatsoever with respect to the Company without the express prior approval of the Company. -16- IN WITNESS WHEREOF, the Company and the undersigned Subscriber have each duly executed this Agreement as of this 7th day of July, 1997. PERMA-FIX ENVIRONMENTAL SERVICES, INC. By /s/ Louis Centofanti ______________________________ Dr. Louis F. Centofanti Chief Executive Officer THE INFINITY FUND, L.P. By /s/ Mark Scott ______________________________ Name: Mark Scott _______________________ Title: Executive Director ______________________ \N-P\PESI\8K\797\EXHIB4.1 EX-4 3 EXHIBIT 4.2 CERTIFICATE OF DESIGNATIONS State of Delaware Office of the Secretary of State Page 1 I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF DESIGNATION OF "PERMA-FIX ENVIRONMENTAL SERVICES, INC." FILED IN THIS OFFICE ON THE FOURTEENTH DAY OF JULY, A.D. 1997, AT 11:15 O'CLOCK A.M. A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING. /s/ Edward J. Freel _______________________________ Edward J. Freel, Secretary of State Authentication: 8556371 2249849 8100 Date: 07-14-97 971232152 CERTIFICATE OF DESIGNATIONS OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK OF PERMA-FIX ENVIRONMENTAL SERVICES, INC. Perma-Fix Environmental Services, Inc. (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify: That, pursuant to authority conferred upon by the Board of Directors by the Corporation's Restated Certificate of Incorporation, as amended, and pursuant to the provisions of Section 151 of the Delaware Corporation Law, the Board of Directors of the Corporation has adopted resolutions, a copy of which is attached hereto, establishing and providing for the issuance of a series of Preferred Stock designated as Series 5 Class E Convertible Preferred Stock and has established and fixed the voting powers, designations, preferences and relative participating, optional and other special rights and qualifications, limitations and restrictions of such Series 5 Class E Convertible Preferred Stock as set forth in the attached resolutions. Dated: July 3, 1997 PERMA-FIX ENVIRONMENTAL SERVICES, INC. By /s/ Louis Centofanti __________________________________ Dr. Louis F. Centofanti Chairman of the Board ATTEST: /s/ Richard T. Kelecy ______________________________ Richard T. Kelecy, Secretary PERMA-FIX ENVIRONMENTAL SERVICES, INC. (the "Corporation") RESOLUTION OF THE BOARD OF DIRECTORS FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO THE SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK WHEREAS, the Corporation's capital includes preferred stock, par value $.001 per share ("Preferred Stock"), which Preferred Stock may be issued in one or more series by resolutions adopted by the directors, and with the directors being entitled by resolution to fix the number of shares in each series and to designate the rights, designations, preferences and relative, participating, optional or other special rights and privileges, and qualifications, limitations or restrictions attaching to the shares of each such series; WHEREAS, it is in the best interests of the Corporation for the Board to create a new series from the Preferred Stock designated as the Series 5 Class E Convertible Preferred Stock, par value $.001 per share ("Series 5 Class E Preferred Stock"); NOW, THEREFORE, BE IT RESOLVED, that the Series 5 Class E Convertible Preferred Stock, par value $.001 (the "Series 5 Class E Preferred Stock") of the Corporation shall consist of three hundred fifty (350) shares and no more and shall be designated as the Series 5 Class E Convertible Preferred Stock, and the preferences, rights, privileges, restrictions and conditions attaching to the Series 5 Class E Preferred Stock shall be as follows: Part 1 - Voting and Preemptive Rights. 1.1 Voting Rights. Except as otherwise provided in Section 242(b)(2) of the General Corporation Law of the State of Delaware (the "GCL"), the holders of the Series 5 Class E Preferred Stock shall have no voting rights whatsoever. To the extent that under Section 242(b)(2) of the GCL the vote of the holders of the Series 5 Class E Preferred Stock, voting separately as a class or series as applicable, is required to authorize a given action of the Corporation, the affirmative vote or consent of the holders of at least a majority of the shares of the Series 5 Class E Preferred Stock represented at a duly held meeting at which a quorum is present or by written consent of a majority of the shares of Series 5 Class E Preferred Stock (except as otherwise may be required under the GCL) shall constitute the approval of such action by the series. To the extent that under Section 242(b)(2) of the GCL the holders of the Series 5 Class E Preferred Stock are entitled to vote on a matter, each share of the Series 5 Class E Preferred Stock shall be entitled one (1) vote for each outstanding share of Series 5 Class E Preferred Stock. Holders of the Series 5 Class E -2- Preferred Stock shall be entitled to notice of (and copies of proxy materials and other information sent to stockholders) for all shareholder meetings or written consents with respect to which they would be entitled to vote, which notice would be provided pursuant to the Corporation's bylaws and applicable statutes. If the holders of the Series 5 Class E Preferred Stock are required to vote under Section 242(b)(2) of the GCL as a result of the number of authorized shares of any such class or classes of stock being increased or decreased, the number of authorized shares of any of such class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote thereon, irrespective of the provisions of Section 242(b)(2) of the GCL. 1.2 No Preemptive Rights. The Series 5 Class E Preferred Stock shall not give its holders any preemptive rights to acquire any other securities issued by the Corporation at any time in the future. Part 2 - Liquidation Rights. 2.1 Liquidation. If the Corporation shall be voluntarily or involuntarily liquidated, dissolved or wound up at any time when any shares of the Series 5 Class E Preferred Stock shall be outstanding, the holders of the then outstanding Series 5 Class E Preferred Stock shall be entitled to receive out of the assets of the Corporation available for distribution to shareholders an amount equal to $1,000 consideration per outstanding share of Series 5 Class E Preferred Stock, and no more, plus an amount equal to all unpaid dividends accrued thereon to the date of payment of such distribution ("Liquidation Preference"), whether or not declared by the Board of Directors, before any payment shall be made or any assets distributed to the holders of the Corporation's Common Stock. 2.2 Payment of Liquidation Preferences. Subject to the provisions of Part 6 hereof, all amounts to be paid as Liquidation Preference to the holders of Series 5 Class E Preferred Stock, as provided in this Part 2, shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any of the Corporation's property to the holders of the Corporation's Common Stock, whether now or hereafter authorized, in connection with such liquidation, dissolution or winding up. 2.3 No Rights After Payment. After the payment to the holders of the shares of the Series 5 Class E Preferred Stock of the full Liquidation Preference amounts provided for in this Part 2, the holders of the Series 5 Class E Preferred Stock as such shall have no right or claim to any of the remaining assets of the Corporation. 2.4 Assets Insufficient to Pay Full Liquidation Preference. In the event that the assets of the Corporation available for distribution to the holders of shares of the Series 5 Class E Preferred Stock upon any dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, shall be -3- insufficient to pay in full all amounts to which such holders are entitled pursuant to this Part 2, no such distribution shall be made on account of any shares of any other class or series of Preferred Stock ranking on a parity with the shares of this Series 5 Class E Preferred Stock upon such dissolution, liquidation or winding up unless proportionate distributive amounts shall be paid on account of the shares of this Series 5 Class E Preferred Stock and shares of such other class or series ranking on a parity with the shares of this Series 5 Class E Preferred Stock, ratably, in proportion to the full distributable amounts for which holders of all such parity shares are respectively entitled upon such dissolution, liquidation or winding up. Part 3 - Dividends. 3.1 The holders of the Series 5 Class E Preferred Stock are entitled to receive if, when and as declared by the Board of Directors of the Corporation (the "Board") out of funds legally available therefor, cumulative annual dividends, payable in cash or Common Stock of the Corporation, par value $.001 per share (the "Common Stock"), or any combination thereof, at the Corporation's election, at the rate of four percent (4%) per annum of the Liquidation Value (as defined below) of each issued and outstanding share of Series 5 Class E Preferred Stock (the "Dividend Rate"). The Liquidation Value of the Series 5 Class E Preferred Stock shall be $1,000 per outstanding share of the Series 5 Class E Preferred Stock (the "Liquidation Value"). The dividend is payable semi- annually within seven (7) business days after each of December 31 and June 30 of each year, commencing December 31, 1997 (each, a "Dividend Declaration Date"). Dividends shall be paid only with respect to shares of Series 5 Class E Preferred Stock actually issued and outstanding on a Dividend Declaration Date and to holders of record of the Series 5 Class E Preferred Stock as of the Dividend Declaration Date. Dividends shall accrue from the first day of the semi-annual period in which such dividend may be payable, except with respect to the first semi-annual dividend which shall accrue from the date of issuance of the Series 5 Class E Preferred Stock. In the event that the Corporation elects to pay the accrued dividends due as of a Dividend Declaration Date on an outstanding share of the Series 5 Class E Preferred Stock in Common Stock of the Corporation, the holder of such share shall receive that number of shares of Common Stock of the Corporation equal to the product of (a) the quotient of (i) the Dividend Rate divided by (ii) the average of the closing bid quotation of the Corporation's Common Stock as reported on the National Association of Securities Dealers Automated Quotation system ("NASDAQ"), or the average closing sale price if listed on a national securities exchange, for the five (5) trading days immediately prior to the Dividend Declaration Date (the "Stock Dividend Price"), times (b) a fraction, the numerator of which is the number of days elapsed during the period for which the dividend is to be paid, and the denominator of which is 365. Dividends on the Series 5 Class E Preferred Stock shall be cumulative, and no dividends or other distributions shall be paid or declared or set aside for payment on the Corporation's Common Stock until all accrued and unpaid dividends on all outstanding shares of Series 5 Class E Preferred Stock shall have been paid or declared and set aside for payment. -4- Part 4 - Conversion. The holders of the Series 5 Class E Preferred Stock shall have rights to convert the shares of Series 5 Class E Preferred Stock into shares of the Corporation's Common Stock, as follows (the "Conversion Rights"): 4.1 Right to Convert. The Series 5 Class E Preferred Stock shall be convertible into shares of Common Stock, as follows: 4.1.1 Up to one hundred seventy-five (175) shares of Series 5 Class E Preferred Stock may be converted at the Conversion Price (as that term is defined in Section 4.2 below) at any time on or after November 3, 1997; and, 4.1.2 Up to an additional one hundred seventy-five (175) shares of Series 5 Class E Preferred Stock may be converted at the Conversion Price at any time on or after December 3, 1997. 4.2 Conversion Price. Subject to the terms hereof, as used herein, the term Conversion Price per outstanding share of Series 5 Class E Preferred Stock shall be the product of the lesser of (i) the average closing bid quotation of the Common Stock as reported on the over-the-counter market, or the closing sale price if listed on a national securities exchange, for the five (5) trading days immediately preceding the date of the Conversion Notice referred to in Section 4.3 below multiplied by eighty percent (80%) or (ii) U.S. $1.6875. Notwithstanding the foregoing, the Conversion Price shall not be less than a minimum of $.75 per share ("Minimum Conversion Price"), which Minimum Conversion Price shall be eliminated from and after September 6, 1998. If any of the outstanding shares of Series 5 Class E Preferred Stock are converted, in whole or in part, into Common Stock pursuant to the terms of this Part 4, the number of shares of whole Common Stock to be issued to the holder as a result of such conversion shall be determined by dividing (a) the aggregate Liquidation Value of the Series 5 Class E Preferred Stock so surrendered for conversion by (b) the Conversion Price in effect at the date of the conversion. At the time of conversion of shares of the Series 5 Class E Preferred Stock, the Corporation shall pay in cash to the holder thereof an amount equal to all unpaid and accrued dividends, if any, accrued thereon to the date of conversion, or, at the Corporation's option, in lieu of paying cash for the accrued and unpaid dividends, issue that number of shares of whole Common Stock which is equal to the quotient of the amount of such unpaid and accrued dividends to the date of conversion on the shares of Series 5 Class E Preferred Stock so converted divided by the Stock Dividend Price, as defined in Section 3.1 hereof, in effect at the date of conversion. 4.3 Mechanics of Conversion. Any holder of the Series 5 Class E Preferred Stock who wishes to exercise its Conversion Rights pursuant to Section 4.1 of this Part 4 must surrender the certificate therefor at the principal executive office of the Corporation, and give written notice, which may be via -5- facsimile transmission, to the Corporation at such office that it elects to convert the same (the "Conversion Notice"). No Conversion Notice with respect to any shares of Series 5 Class E Preferred Stock can be given prior to the time such shares of Series 5 Class E Preferred Stock are eligible for conversion in accordance with the provision of Section 4.1 above, except as provided in Section 4.4. Any such premature Conversion Notice shall automatically be null and void. The Corporation shall, within seven (7) business days after receipt of an appropriate and timely Conversion Notice (and certificate, if necessary), issue to such holder of Series 5 Class E Preferred Stock or its agent a certificate for the number of shares of Common Stock to which he shall be entitled; it being expressly agreed that until and unless the holder delivers written notice to the Corporation to the contrary, all shares of Common Stock issuable upon conversion of the Series 5 Class E Preferred Stock hereunder are to be delivered by the Corporation to a party designated in writing by the holder in the Conversion Notice for the account of the holder and such shall be deemed valid delivery to the holder of such shares of Common Stock. Such conversion shall be deemed to have been made only after both the certificate for the shares of Series 5 Class E Preferred Stock to be converted have been surrendered and the Conversion Notice is received by the Corporation (the "Conversion Documents"), and the person or entity whose name is noted on the certificate evidencing such shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock at and after such time. In the event that the Conversion Notice is sent via facsimile transmission, the Corporation shall be deemed to have received such Conversion Notice on the first business day on which such facsimile Conversion Notice is actually received. 4.4 Merger or Consolidation. In case of either (a) any merger or consolidation to which the Corporation is a party (collectively, the "Merger"), other than a Merger in which the Corporation is the surviving or continuing corporation, or (b) any sale or conveyance to another corporation of all, or substantially all, of the assets of the Corporation (collectively, the "Sale"), and such Merger or Sale becomes effective (x) while any shares of Series 5 Class E Preferred Stock are outstanding and prior to the date that the Corporation's Registration Statement covering up to 200,000 shares of Common Stock issuable upon the conversion of the Series 5 Class E Preferred Stock is declared effective by the U. S. Securities and Exchange Commission or (y) prior to the end of the restriction periods in Section 4.1, then, in such event, the Corporation or such successor corporation, as the case may be, shall make appropriate provision so that the holder of each share of Series 5 Class E Preferred Stock then outstanding shall have the right to convert such share of Series 5 Class E Preferred Stock into the kind and amount of shares of stock or other securities and property receivable upon such Merger or Sale by a holder of the number of shares of Common Stock into which such shares of Series 5 Class E Preferred Stock could have been converted into immediately prior to such Merger or Sale, subject to adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Part 4. -6- 4.4 Adjustments to Conversion Price for Stock Dividends and for Combinations or Subdivisions of Common Stock. If the Corporation at any time or from time to time while shares of Series 5 Class E Preferred Stock are issued and outstanding shall declare or pay, without consideration, any dividend on the Common Stock payable in Common Stock, or shall effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise than by payment of a dividend in Common Stock or in any right to acquire Common Stock), or if the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, then the Conversion Price in effect immediately before such event shall, concurrently with the effectiveness of such event, be proportionately decreased or increased, as appropriate. 4.5. Adjustments for Reclassification and Reorganization. If the Common Stock issuable upon conversion of the Series 5 Class E Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for in Section 4.4 hereof), the Conversion Price then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted so that the Series 5 Class E Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which the holders of Series 5 Class E Preferred Stock would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to receipt by the holders upon conversion of the Series 5 Class E Preferred Stock immediately before that change. 4.6 Common Stock Duly Issued. All Common Stock which may be issued upon conversion of Series 5 Class E Preferred Stock will, upon issuance, be duly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof. 4.7 Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of any Conversion Price pursuant to this Part 4, the Corporation, at its expense, within a reasonable period of time, shall compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series 5 Class E Preferred Stock a notice setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment is based. 4.8 Issue Taxes. The Corporation shall pay any and all issue and other taxes that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of the Series 5 Class E Preferred Stock pursuant thereto; provided, however, that the Corporation shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder of Series 5 Class E Preferred Stock in connection with such conversion. -7- 4.9 Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series 5 Class E Preferred Stock, such number of its shares of Common Stock as shall, from time to time, be sufficient to effect the conversion of all outstanding shares of the Series 5 Class E Preferred stock, and, if at any time, the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series 5 Class E Preferred Stock, the Corporation will take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in reasonable efforts to obtain the requisite stockholder approval of any necessary amendment to its Certificate of Incorporation. 4.10 Fractional Shares. No fractional shares shall be issued upon the conversion of any share or shares of Series 5 Class E Preferred Stock. All shares of Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series 5 Class E Preferred Stock by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of a fractional share of Common Stock, such fractional share shall be rounded up to the nearest whole share. 4.11 Notices. Any notices required by the provisions of this Part 4 to be given to the holders of shares of Series 5 Class E Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his address appearing on the books of the Corporation. 4.12 Business Day. As used herein, the term "business day" shall mean any day other than a Saturday, Sunday or a day when the federal and state banks located in the State of New York are required or is permitted to close. Part 5 - Redemption. 5.1 Redemption at Corporation's Option. Except as otherwise provided in this Section 5.1, at any time, and from time to time, after the expiration of one (1) year from the date of the first issuance of the Series 5 Class E Preferred Stock, the Corporation may, at its sole option, but shall not be obligated to, redeem, in whole or in part, at any time, and from time to time, the then outstanding Series 5 Class E Preferred Stock at the following cash redemption prices per share (the "Redemption Price") if redeemed during the following periods: (a) within four (4) years from the date of the first issuance of Series 5 Class E Preferred Stock - $1,300 per share, if at any time during such four (4) year period the average of the closing bid price of the Common Stock for ten (10) consecutive trading days shall be in excess -8- of Four U.S. Dollars ($4.00) per share, and (b) after four (4) years from the date of the first issuance of Series 5 Class E Preferred Stock - $1,000 per share. 5.3 Mechanics of Redemption. Thirty (30) days prior to any date stipulated by the Corporation for the redemption of Series 5 Class E Preferred Stock (the "Redemption Date"), written notice (the "Redemption Notice") shall be mailed to each holder of record on such notice date of the Series 5 Class E Preferred Stock. The Redemption Notice shall state: (i) the Redemption Date of such shares, (ii) the number of Series 5 Class E Preferred Stock to be redeemed from the holder to whom the Redemption Notice is addressed, (iii) instructions for surrender to the Corporation, in the manner and at the place designated, of a share certificate or share certificates representing the number of Series 5 Class E Preferred Stock to be redeemed from such holder, and (iv) instructions as to how to specify to the Corporation the number of Series 5 Class E Preferred Stock to be redeemed as provided in this Part 5. 5.4 Rights of Conversion Upon Redemption. If the redemption occurs after the first one hundred eighty (180) days after the first issuance of Series 5 Class E Preferred Stock, then, upon receipt of the Redemption Notice, any holder of Series 5 Class E Preferred Stock shall have the option, at its sole election, to specify what portion of its Series 5 Class E Preferred Stock called for redemption in the Redemption Notice shall be redeemed as provided in this Part 5 or converted into Common Stock in the manner provided in Part 4 hereof. 5.5 Surrender of Certificates. On or before the Redemption Date in respect of any Series 5 Class E Preferred Stock, each holder of such shares shall surrender the required certificate or certificates representing such shares to the Corporation in the manner and at the place designated in the Redemption Notice, and upon the Redemption Date, the Redemption Price for such shares shall be made payable, in the manner provided in Section 5.6 hereof, to the order of the person whose name appears on such certificate or certificates as the owner thereof. If a share certificate is surrendered and all the shares evidenced thereby are not being redeemed (as described below), the Corporation shall cause the Series 5 Class E Preferred Stock which are not being redeemed to be registered in the names of the persons or entity whose names appear as the owners on the respective surrendered share certificates and deliver such certificate to such person. 5.6 Payment. On the Redemption Date in respect of any Series 5 Class E Preferred Stock or prior thereto, the Corporation shall deposit with any bank or trust company having a capital and surplus of at least U. S. $50,000,000, as a trust fund, a sum equal to the aggregate Redemption Price of all such shares called from redemption (less the aggregate Redemption Price for those Series 5 Class E Preferred Stock in respect of which the Corporation has received notice from the holder thereof of -9- its election to convert Series 5 Class E Preferred Stock into Common Stock), with irrevocable instructions and authority to the bank or trust company to pay, on or after the Redemption Date, the Redemption Price to the respective holders upon the surrender of their share certificates. The deposit shall constitute full payment for the shares to their holders, and from and after the date of the deposit the redeemed shares shall be deemed to be no longer outstanding, and holders thereof shall cease to be shareholders with respect to such shares and shall have no rights with respect thereto except the rights to receive from the bank or trust company payments of the Redemption Price of the shares, without interest, upon surrender of their certificates thereof. Any funds so deposited and unclaimed at the end of one year following the Redemption Date shall be released or repaid to the Corporation, after which the former holders of shares called for redemption shall be entitled to receive payment of the Redemption Price in respect of their shares only from the Corporation. Part 6 - Parity with Other Shares of Series 5 Class E Preferred Stock and Priority. 6.1 Rateable Participation. If any cumulative dividends or return of capital in respect of Series 5 Class E Preferred Stock are not paid in full, the owners of all series of outstanding Preferred Stock shall participate rateably in respect of accumulated dividends and return of capital. 6.2 Ranking. For purposes of this resolution, any stock of any class or series of the Corporation shall be deemed to rank: 6.2.1 Prior or senior to the shares of this Series 5 Class E Preferred Stock either as to dividends or upon liquidation, if the holders of such class or classes shall be entitled to the receipt of dividends or of amounts distributable upon dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, as the case may be, in preference or priority to the holders of shares of this Series 5 Class E Preferred Stock; 6.2.2 On a parity with, or equal to, shares of this Series 5 Class E Preferred Stock, either as to dividends or upon liquidation, whether or not the dividend rates, dividend payment dates, or redemption or liquidation prices per share or sinking fund provisions, if any, are different from those of this Series 5 Class E Preferred Stock, if the holders of such stock are entitled to the receipt of dividends or of amounts distributable upon dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, in proportion to their respective dividend rates or liquidation prices, without preference or priority, one over the other, as between the holders of such stock and over the other, as between the holders of such stock and the holders of shares of this Series 5 Class E Preferred Stock; and, -10- 6.2.3 Junior to shares of this Series 5 Class E Preferred Stock, either as to dividends or upon liquidation, if such class or series shall be Common Stock or if the holders of shares of this Series 5 Class E Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, as the case may be, in preference or priority to the holders of shares of such class or series. Part 7 - Reissue. 7.1 Authorized. Any shares of Series 5 Class E Preferred Stock acquired by the Corporation by reason of purchase, conversion, redemption or otherwise shall be retired and shall become authorized but unissued shares of Preferred Stock, which may be reissued as part of a new series of Preferred Stock hereafter created. -11- MBEN:\N-P\PESI\S3\1997\EXHIB3.1 EX-4 4 EXHIBIT 4.3 SPECIMEN CERTIFICATE SEE RESTRICTIVE LEGEND ON REVERSE SIDE INCORPORATED UNDER THE LAWS OF DELAWARE No. - *** - Shares *** PERMA-FIX ENVIRONMENTAL SERVICES, INC. SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK Par Value $.001 Per Share THIS CERTIFIES THAT S P E C I M E N is the owner of ***** *************** (*****) shares of Series 5 Class E Convertible Preferred Stock of Perma-Fix Environmental Services, Inc. transferrable only on the books of the Corporation by the holder hereof in person or by attorney upon surrender of this Certificate properly endorsed. In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers and to be sealed with the Seal of the Corporation this _____ day of July, 1997. /s/ Richard T. Kelecy /s/ Louis Centofanti __________________________ __________________________ Secretary President SHARES $.001 EACH NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS PREFERRED STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS PREFERRED STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL SERVICES, INC. (THE "COMPANY") AND AN OPINION OF THE COMPANY'S COUNSEL, OR AN OPINION FROM COUNSEL FOR THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM. NOTWITHSTANDING THE FOREGOING, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT CERTAIN SUBSCRIPTION AND PURCHASE AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED JULY 7, 1997, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF THE SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ******************* CERTIFICATE FOR **** SHARES of the CAPITAL STOCK of Perma-Fix Environmental Services, Inc. Series 5 Class E Convertible Preferred Stock Par Value $.001 Per Share ISSUED TO S P E C I M E N DATED July ___, 1997 ******************* For Value Received, __________ hereby sell, assign and transfer unto __________________________________________________ ___________________ Shares of the Capital Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint _________________________________________ to transfer the said Stock on the books of the within named Corporation with full power of substitution in the premises. Dated __________________, 19______. In presence of ________________________________________ EX-4 5 EXHIBIT 4.4 STOCK PURCHASE AGREEMENT (CENTOFANTI) STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 30th day of June, 1997, by and between PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware corporation ("PESI"), and DR. LOUIS F. CENTOFANTI, an individual ("Centofanti"). W I T N E S S E T H: WHEREAS, Centofanti is the Chairman of the Board and President of PESI; and WHEREAS, Centofanti and PESI have negotiated this Agreement in which Centofanti would acquire 24,381 shares of PESI Common Stock for $40,000, which is seventy-five percent (75%) of the closing bid price of each share of PESI Common Stock as quoted on the NASDAQ on the date hereof; and WHEREAS, the closing bid price of the PESI Common Stock was $2.1875, as reported on the NASDAQ as of June 30, 1997; and WHEREAS, Centofanti desires to purchase Twenty-four Thousand Three Hundred Eighty-one (24,381) shares of PESI Common Stock, par value $.001 per share, and PESI desires to sell to Centofanti such shares of Common Stock, upon the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual promises and the respective covenants and agreements contained herein, the parties hereto agree as follows: 1. Purchase and Sale. 1.1 Purchase of Shares. Subject to the terms and conditions of this Agreement, Centofanti hereby purchases Twenty-four Thousand Three Hundred Eight-one (24,381) shares of PESI Common Stock (the "Shares"), and PESI hereby issues and delivers the Shares to Centofanti. 1.2 Purchase Price; Payment of Purchase Price. The per share purchase price of the Shares shall be $1.6406, calculated at seventy-five percent (75%) of $2.1875 (the closing bid price of the Common Stock on June 30, 1997, as reported on the National Association of Securities Dealers Automated Quotation System ("NASDAQ")). In consideration for the Shares, Centofanti hereby tenders to the Company Forty Thousand Dollars ($40,000.00). 2. Representations and Warranties of Centofanti. Centofanti represents and warrants as follows: 2.1 Purchase for Investment. Centofanti is acquiring, or will acquire, the Shares to hold for investment, with no present intention of dividing Centofanti's participation with others or reselling or otherwise participating, directly or indirectly, in a distribution thereof, and not with a view to or for sale in connection with any distribution thereof, except pursuant to a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), and any applicable state securities laws, or a transaction exempt from registration thereunder, and shall not make any sale, transfer or other disposition of the Shares in violation of any applicable state securities laws, including in each instance any applicable rules and regulations promulgated thereunder, or in violation of the Securities Act or the rules and regulations promulgated thereunder by the Securities and Exchange Commission (the "SEC"). 2.2 No Registration. Centofanti acknowledges that the Shares are not being registered under any state securities laws, and are not being registered under the Securities Act on the ground that this transaction is exempt from registration under Section 3(b) and/or 4(2) of the Securities Act, and that reliance by PESI on such exemptions is predicated in part on Centofanti's representations set forth herein. 2.3 Restricted Transfer. Centofanti agrees that PESI may refuse to permit the sale, transfer or disposition of any of the Shares received by Centofanti unless there is in effect a registration statement under the Secur- ities Act and any applicable state securities law covering such transfer or Centofanti furnishes an opinion of counsel or other evidence, reasonably satisfactory to counsel for PESI, to the effect that such registration is not required. 2.4 Legend. Centofanti understands and agrees that stop transfer instructions will be given to PESI's transfer agent and that there will be placed on the certificate or certificates for any of the Shares received by Centofanti, any substitutions therefor and any certif- icates for any additional shares which might be dis- tributed with respect to such Shares, a legend stating in substance: "The shares of stock evidenced by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933, as amended (the Securities Act"). These shares may not be sold or transferred except pursuant to an effective registration statement under the Securities Act and any applicable state securities laws unless there is furnished to the issuer an opinion of counsel or other evidence, reasonably satisfactory to the issuer's counsel, to the effect that such registration is not required." -2- 2.5 Indefinite Holding Period. Centofanti understands that under the Securities Act, the Shares received by Centofanti must be held indefinitely unless they are subsequently registered under the Securities Act or unless an exemption from such registration is available with respect to any proposed transfer or disposition of such shares. 2.6 Rule 144 Compliance. Centofanti understands that PESI is required to file periodic reports with the SEC and that certain sales of the Shares received by Centofanti may be exempt from registration under the Securities Act by virtue of Rule 144 promulgated by the SEC under the Securities Act, provided that such sales are made in accordance with all of the terms and conditions of that Rule including compliance with the required two- year holding period. Centofanti further understands that if Rule 144 is not available for sales of the Shares received by Centofanti, such Shares may not be sold without registration under the Securities Act or compliance with some other exemption from such registration, and that PESI has no obligation to register the Shares received by Centofanti or take any other action necessary in order to make compliance with an exemption from registration available. 2.7 Sophisticated Investor. Centofanti, as President and Chairman of the Board of PESI, possesses extensive knowledge as to the business and operation of PESI and has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the acquisition of the Shares. 3. Representations and Warranties of PESI. PESI represents and warrants as follows: 3.1 Organization and Standing. PESI is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 3.2 Power, Authority and Validity. PESI has full right, power and corporate authority to enter into this Agreement and to perform the transactions contemplated hereby, and this Agreement is valid and binding upon and enforceable against PESI in accordance with its terms. The execution, delivery and the performance of this Agreement by PESI has been duly and validly authorized and approved by all requisite action on the part of PESI and Buyer. 3.3 Status of PESI Common Stock. The PESI Common Stock to be issued pursuant to this Agreement, when so issued, will be duly and validly authorized and issued, fully paid and nonassessable. -3- 4. Miscellaneous. 4.1 Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if delivered or mailed, first-class postage prepaid, to the following at the addresses indicated: To PESI: Perma-Fix Environmental Services, Inc. c/o Chief Financial Officer 1940 Northwest 67th Place Gainesville, Florida 32653 To Centofanti: Dr. Louis F. Centofanti Perma-Fix Environmental Services, Inc. 6075 Roswell, Suite 602 Atlanta, Georgia 30328 or to any other address that PESI or Centofanti shall designate in writing. 4.2 Brokers. Each party represents and warrants that all negotiations related to this Agreement have been carried on by the parties without the intervention of any broker. Each party agrees to indemnify, and hold the other party harmless against any claims for fees or commissions employed or alleged to have been employed by such party. 4.3 Amendment. This Agreement shall not be amended, altered or terminated except by a writing executed by each party. 4.4 Governing Law. This Agreement shall be governed in all respects by the law of the State of Delaware. 4.5 Headings. The paragraph headings used in this Agreement are included solely for convenience, and shall not in any way affect the meaning or interpretation of this Agreement. 4.6 Entire Agreement. This Agreement sets forth the entire understanding of the parties; further, this Agreement shall supersede and/or replace any oral or written Agreements relating to this subject matter entered into by the parties before the date of this Agreement. -4- 4.7 Binding Effect. This Agreement shall be binding on and inure to the benefit of, and be enforceable by, the respective heirs, legal representatives, successors, and assigns of the parties pursuant to its terms. PESI and Centofanti have executed this Agreement as of the 30th day of June, 1997. PERMA-FIX ENVIRONMENTAL SERVICES, INC. By:____________________________________ RICHARD T. KELECY Chief Financial Officer ________________________________________ DR. LOUIS F. CENTOFANTI, individually -5- MBEN:\N-P\PESI\8K\EDGAR\EXHIB4.4 -----END PRIVACY-ENHANCED MESSAGE-----