CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of
June 30, 1998 is entered into by and among PERMA FIX ENVIRONMENTAL
SERVICES, INC.,a Delaware corporation (herein referred to as the
"Company"), LIVIAKIS FINANCIAL COMMUNICATIONS, INC., a California
corporation ("LFC" or "Consultant") and ▇▇▇▇▇▇ ▇. ▇▇▇▇, an
individual ("Prag").
WHEREAS, Company is a publicly held corporation with its
common stock listed for trading on the NASDAQ Small Cap Market and
the Boston Stock Exchange;
WHEREAS, Consultant has experience in the area of corporate
finance, investor communications and financial and investor public
relations;
WHEREAS, Company desires to engage the services of Consultant
to assist and consult with the Company and to represent the Company
in connection with investors' communications and public relations
with existing shareholders, brokers, dealers and other investment
professionals as to the Company's current and proposed activities;
WHEREAS, Prag is an executive officer of Consultant; and,
WHEREAS, the Consultant and Prag have assisted the Company in
connection with that certain Private Securities Subscription
Agreement between the Company and RBB Bank Aktiengesellschaft ("RBB
Bank"), dated June 30, 1998 ("Subscription Agreement") whereby the
Company is to sell to RBB Bank a new series of the Company's
preferred stock in order to raise additional equity for the
Company.
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto
covenant and agree as follows:
I. PLACEMENT
1. Placement. The Consultant and Prag have provided
consulting services in connection with the placement ("Placement")
of certain securities through the Subscription Agreement and are to
be compensated by the Company for such services as described
herein.
2. Warrants. For assisting in the Placement and for other
good and valuable consideration, the Company agrees to issue and
deliver to the Consultant and to Prag a "Placement Fee" payable in
the form of warrants to purchase 2,500,000 shares of the Company's
Common Stock, par value $.001 per share ("Common Stock"), for
$1.875 per share ("Warrants") of which 1,875,000 are to be issued
to Consultant in the name of Liviakis Financial Communications, Inc
and 625,000 are to be issued to Prag in the name of ▇▇▇▇▇▇ ▇. ▇▇▇▇.
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The term of the Warrants will be for 4 years, shall contain a
cashless exercise provision and a registration rights provision, as
provided in Exhibit A attached hereto. This Placement Fee shall be
issued to the Consultant and Prag immediately following completion
of the Placement and shall, when issued and delivered to Consultant
and Prag, be fully paid and non-assessable. The 2,500,000 Warrants
issued as a Placement Fee, constitute payment for consulting in
connection with the Placement and are nonrefundable,
non-apportionable, and non-ratable; such Warrants are not a
prepayment for future services.
2.1 Consultants and Prag each acknowledge that the Warrants
and shares of Common Stock to be issued pursuant to the Warrants
(collectively, the "Shares") have not been registered under the
Securities Act of 1933, as amended (the "Act"), and accordingly are
"restricted securities" within the meaning of Rule 144 of the Act.
As such, the Warrants and the Shares may not be resold or
transferred unless the Warrants and the Shares have been registered
under the Act or the Company has received an opinion of counsel
reasonably satisfactory to the Company that such resale or transfer
is exempt from the registration requirements of that Act.
Consultant and Prag each further understand that the exemption from
registration afforded by Rule 144 under the Act depends upon the
satisfaction of various conditions and that, if applicable, Rule
144 affords the basis for sale only in limited amounts.
2.2 In connection with the acquisition of the Warrants and
the Shares, the Consultant and Prag each represent, warrant and
covenant to the Company as follows:
a. Consultant and Prag each acknowledge that they have
been afforded the opportunity to ask questions of
and receive answers from duly authorized officers
or other representatives of the Company concerning
an investment in the Shares, and any additional
information which the Consultant and Prag have
requested.
b. Consultant and Prag have each had experience in
investments in restricted and publicly traded
securities, and Consultant and Prag have each had
experience in investments in speculative securities
and other investments which involve the risk of
loss of investment. Consultant and Prag each
acknowledge that an investment in the Warrants
and/or Shares is speculative and involves the risk
of loss. Both Consultant and Prag have the
requisite knowledge to assess the relative merits
and risks of this investment without the necessity
of relying upon other advisors, and Consultant and
Prag can afford the risk of loss of their entire
investment in the Warrants or Shares. Consultant
is an "accredited investor," as that term is
defined in Rule 501 of Regulation D promulgated
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under the Act, due to the fact that LFC (a) was not
created solely to permit the acquisition of
Warrants or Shares and has total assets in excess
of $5,000,000 and/or (b) is wholly owned by persons
who qualify as accredited investors. Prag is an
"accredited investor," as that term is defined in
Rule 501 of Regulation D promulgated under the Act,
due to the fact that Prag (a) has an individual net
worth, or joint net worth with his spouse in excess
of $1,000,000 and/or (b) had an individual income
in excess of $200,000 in each of the two most
recent years or joint income with his spouse in
excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income
based in the current year. Both LFC and Prag are
purchasers described in Section 25102 (f) (2) of
the California Corporate Securities Law of 1968, as
amended.
c. Each of Consultant and Prag is acquiring the
Warrants and the Shares for its or his own account
for long-term investment and not with a view toward
resale or distribution thereof except in accordance
with applicable securities laws.
d. Each of Consultant and Prag acknowledges that
issuance of the Warrants and the Shares has not
been made in connection with any advertisement.
e. Each of Consultant and Prag acknowledges it or he
has received copies of the Company's Form 10-K for
the year ended December 31, 1997, Form 10-Q for the
quarter ended March 31, 1998, and proxy soliciting
material for the Company's 1998 annual meeting of
shareholders.
f. Each of Consultant and Prag acknowledges that the
Shares shall upon issuance thereof have stamped or
imprinted thereon or affixed thereto a legend to
the following effect:
THE REGISTERED HOLDER HEREOF HAS
ACQUIRED THE SHARES REPRESENTED BY
THIS CERTIFICATE FOR INVESTMENT AND
NOT FOR RESALE IN CONNECTION WITH A
DISTRIBUTION THEREOF. ACCORDINGLY,
SUCH SHARES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO A CURRENTLY EFFECTIVE
REGISTRATION STATEMENT UNDER SAID
ACT OR OTHERWISE IN A TRANSACTION
EXEMPT FROM THE PROVISIONS OF
SECTION5 OF SAID ACT.
2.3 The Company covenants to file, in a timely manner, with
the Securities and Exchange Commission ("Commission") all
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reports required to be filed by the Company under the
Securities Exchange Act of 1934, as amended, for a period
ending the earlier of (i) twenty-four (24) months after
the termination of the Warrants if the Warrants have been
exercised, in whole or in part, or if the Warrants have
not been exercised prior to their termination, the n upon
termination of the Warrants, or (ii) the date on which
Consultant and Prag have disposed of or transformed all
of the Shares acquired upon the exercise of the Warrants,
or (iii) the date on which registration under the Act is
no longer required for the public distribution of the
Shares acquired upon the exercise of the Warrants as a
result of the provisions of Rule 144 (k) promulgated
under the Act or a similar exemption under the Act.
II. CONSULTING SERVICES
1. Term of Consultancy. The Company hereby agrees to
retain the Consultant to act in a consulting capacity to the
Company, and the Consultant hereby agrees to provide services to
the Company commencing immediately and ending on March 15, 1999.
2. Duties of Consultant. LFC agrees that it will
generally provide the following specified consulting services
through its officers and employees during the term specified in
Section II. 1 hereof:
(a) Advise and assist the Company in developing and
implementing appropriate plans and materials for presenting the
Company and its business plans, strategy and personnel to the
financial community, establishing an image for the Company in the
financial community, and creating the foundation for subsequent
financial public relations efforts;
(b) Introduce the Company to the financial community;
(c) With the cooperation of the Company, maintain an awareness
during the term of this Agreement of the Company's plans, strategy
and personnel, as they may evolve during such period, and advise
and assist the Company in communicating appropriate information
regarding such plans, strategy and personnel to the financial
community;
(d) Assist and advise the Company with respect to its (i)
stockholder and investor relations, (ii) relations with brokers,
dealers, analysts and other investment professionals, and (iii)
financial public relations generally;
(e) Perform the functions generally assigned to
investor/stockholder relations and public relations departments in
major corporations, including responding to telephone and written
inquiries (which may be referred to the Consultant by the Company);
preparing press releases for the Company with the Company's
involvement and approval or reviewing press releases, reports and
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other communications with or to shareholders, the investment
community and the general public; advising with respect to the
timing, form, distribution and other matters related to such
releases, reports and communications; and consulting with respect
to corporate symbols, logos, names, the presentation of such
symbols, logos and names, and other matters relating to corporate
image;
(f) Upon the Company's approval, disseminate information
regarding the Company to shareholders, brokers, dealers, other
investment community professionals and the general investing
public;
(g) Upon the Company's approval, conduct meetings, in person
or by telephone, with brokers, dealers, analysts and other
investment professionals to advise them of the Company's plans,
goals and activities, and assist the Company in preparing for press
conferences and other forums involving the media, investment
professionals and the general investment public;
(h) At the Company's request, review business plans,
strategies, mission statements, budgets, proposed transactions and
other plans for the purpose of advising the Company of the
investment community implications thereof; and,
(i) Otherwise perform as the Company's financial relations
and public relations consultant.
3. Allocation of Time and Energies. The Consultant hereby
promises to perform and discharge well and faithfully the
responsibilities which may be assigned to the Consultant from time
to time by the officers and duly authorized representatives of the
Company in connection with the conduct of its financial and
investor public relations and communications activities, so long as
such activities are in compliance with applicable securities laws
and regulations. Consultant shall diligently and thoroughly
provide the consulting services required hereunder. Although no
specific hours-per-day requirement will be required, Consultant and
the Company agree that Consultant will perform the duties set forth
herein above in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the
effort to be expended and the costs to be incurred by the
Consultant and the benefits to be received by the Company are
expected to occur upon and shortly after, and in any event, within
two months of the effectiveness of this Agreement. It is
explicitly understood that Consultant's performance of its duties
hereunder will in no way be measured by the price of the Company's
Common Stock, nor the trading volume of the Company's Common Stock.
4. Remuneration. As full and complete compensation for
providing the continuing consulting services for the Company, the
Company agrees to pay to Consultant the amount of One Hundred Fifty
and/no 100 Dollars ($150.00) per month during the term of this
Agreement.
5. Financing "Finder's Fee". It is understood that in the
event Consultant introduces Company, or its nominees, to a lender
or equity purchaser, not already having a preexisting relationship
with the Company and with whom the Company has not had preexisting
discussions regarding a lending arrangement or equity purchase
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arrangement, with whom Company, or its nominees, ultimately
finances or causes the completion of such financing during the term
of this Agreement or within one year from the date of termination
of this Agreement, Company agrees to compensate the Consultant for
such services with a "finder's fee" in the amount of 2.5% of
total gross funding provided by such lender or equity purchaser,
such fee to be payable in cash upon receipt of such financing by
the Company. This will be in addition to any fees payable by
Company to any other intermediary, if any, which shall be per
separate agreements negotiated between Company, and such other
intermediary. It is also understood that in the event Consultant
introduces Company or its nominees to an acquisition or business
combination (as defined below) candidate not already having a
preexisting relationship with the Company and with whom the Company
has not had preexisting discussions regarding such an acquisition
or business combination, with whom Company, or its nominees,
ultimately acquires or causes the completion of such acquisition or
business combination during the term of this Agreement or within
one year from the date of termination of this Agreement, Company,
agrees to compensate Consultant, for such services with a "finder's
fee" in the amount of 2% of the consideration paid in connection
with such acquisition or business combination, excluding the amount
of any employment contracts entered into as a result of such
acquisition or business combination, such fee to be payable in cash
upon the close of the applicable acquisition or business
combination transaction. For the purpose of this Section 5,
"business combination" shall mean any "merger or consolidation" of
the Company with another entity in which the Company is not the
survivor, the sale of all or substantially all of the Company's
assets to another entity or a transaction by which the Company
becomes a majority owned subsidiary of another entity (other than
a then existing subsidiary of the Company),with the approval of the
Company's Board of Directors. This will be in addition to any fees
payable by Company to any other intermediary, if any, which shall
be agreements negotiated between Company and such other
intermediary. It is specifically understood that Consultant is
not nor does it hold itself out be a Broker/Dealer, but is rather
merely a "Finder" in reference to the Company procuring financing
sources and acquisition or business combination candidates.
5.1 It is further understood that the Company, and not
Consultant, is responsible to perform any and all due diligence on
such lender, equity purchaser, acquisition or business combination
candidate introduced to it by Consultant, under this Agreement,
prior to Company receiving funds or closing on any acquisition or
business combination. However, Consultant agrees it will not
introduce any parties to Company, about which Consultant has any
prior knowledge of questionable, unethical or illicit activities,
5.2 Consultant will notify Company of introductions it
makes for potential sources of financing, acquisitions or business
combination in a timely manner (within approximately 3 days of
introduction) via facsimile memo. If Company has a preexisting
relationship with such nominee and believes such party should be
excluded from this Agreement, then Company will notify Consultant
promptly of such circumstance via facsimile memo.
6. Expenses. Consultant agrees to pay for all its
expenses (phone, mailing, labor, etc.), other than extraordinary
items (travel required by/or specifically requested by the Company,
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luncheons or dinners to large groups of investment professionals,
mass faxing to a sizable percentage of the Company's constituents,
investor conference calls, print advertisements in publications,
etc.) approved by the Company prior to its incurring an obligation
for reimbursement.
7. Indemnification. The Company warrants and represents
that all oral communications, written documents or materials
furnished to Consultant by the Company with respect to financial
affairs, operations, profitability and strategic planning of the
Company are accurate and Consultant may rely upon the accuracy
thereof without independent investigation. The Company will
protect, indemnify and hold harmless Consultant against any claims
or litigation including any damages, liability, cost and reasonable
attorney's fees as incurred with respect thereto resulting from
Consultant's communication or dissemination of any said
information, documents or materials not designated by the Company
to LFC or Prag as "confidential" or "Company private", excluding
any such claims or litigation resulting from LFC's or Prag's
communication or dissemination of information not provided or
authorized by the Company or due to LFC's or its employees gross
negligence or willful misconduct or acts.
8. Representations. Consultant represents that it is not
required to maintain any licenses and registrations under federal
or any state regulations necessary to perform the services set
forth herein. Consultant acknowledges that, to the best of its
knowledge, the performance of the services set forth under this
Agreement will not violate any rule or provision of any regulatory
agency having jurisdiction over Consultant. Consultant
acknowledges that, to the best of its knowledge, Consultant and its
officers and directors are not the subject of any investigation,
claim, decree or judgment involving any violation of the securities
laws or regulations. Consultant further acknowledges that it is
not a securities Broker-Dealer or a registered investment advisor.
Company acknowledges that, to its knowledge, it has not violated
any rule or provision of any regulatory agency having jurisdiction
over the Company which would have a material adverse effect on the
Company and its subsidiaries, taken as a whole, except as otherwise
disclosed in the Company's filings with the Commission. Company
acknowledges that, to its knowledge, Company is not the subject of
any investigation, claim, decree or judgment involving any
violation of the securities laws, except as otherwise disclosed in
its filings with the Commission.
9. Covenants. (a) LFC and Prag each agree that neither
Prag, LFC, nor any of the directors of LFC, nor "executive
officers" of LFC, as such term is defined in Rule 405 under the Act
shall (i) sell or transfer any Warrants or (ii) sell, transfer or
dispose of the Company's Common Stock or other securities of the
Company, including, but not limited to, the selling short of any of
the Company's securities or Common Stock, during the term specified
in Section II. 1. hereof.
(b) The Company agrees that it shall cause the Company's
directors and "executive officers", as such term is defined in Rule
405 under the Act, to enter into an agreement that they shall not
sell, transfer or dispose of Common Stock, including, but not
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limited to the selling short of such Common Stock or other
securities of the Company, during the term specified in Section II.
1. hereof.
10. Legal Representation. The Company acknowledges that
it has been represented by independent legal counsel in the
preparation of this Agreement. Consultant represents that it has
consulted with independent legal counsel and/or tax, financial and
business advisors, to the extent the Consultant deemed necessary.
11. Status as Independent Contractor. Consultant's
engagement pursuant to this Agreement shall be as independent
contractor, and not as an employee, officer or other agent of the
Company. Neither party to this Agreement shall represent or hold
its elf out to be the employer or employee of the other.
Consultant further acknowledges the consideration provided herein
above is a gross amount of consideration and that the Company will
not withhold from such consideration any amounts as to income
taxes, social security payments or any other payroll taxes. All
such income taxes and other such payment shall be made or provided
for by Consultant and the Company shall have no responsibility or
duties regarding such matters. Neither the Company or the
Consultant possesses the authority to bind each other in any
agreements without the express written consent of the entity to be
bound.
12. Attorney's Fee. If any legal action or any
arbitration or other proceeding is brought for the enforcement or
interpretation of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with or related
to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in
connection with that action or proceeding, in addition to any other
relief to which it or they may be entitled.
13. Waiver. The waiver by any party of a breach of any
provision of this Agreement by another party shall not operate or
be construed as a waiver of any subsequent breach by such other
party.
14. Notices. All notices, requests, and other
communications hereunder shall be deemed to be duly given if sent
by U.S. mail, postage prepaid, addressed to the other parties at
the address as set forth herein below:
To the Company: Perma Fix Environmental Services, Inc.
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, CEO
Perma-Fix Environmental Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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with copies simultaneously
by like means to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
One Leadership Square, Suite 1700
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esquire
To LFC: Liviakis Financial Communications, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
2420 "K" Street, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To Prag: ▇▇▇▇▇▇ ▇. ▇▇▇▇
% Liviakis Financial Communications, Inc.
▇▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with copies simultaneously
by like means to: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
1900 Avenue of the Stars
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
It is understood that any party may change the address to
which notices for it shall be addressed by providing notice of such
change to the other parties in the manner set forth in this
paragraph.
15. Choice of Law, Jurisdiction and Venue. This Agreement
shall be governed by, construed and enforced in accordance with the
laws of the State of California, except that the Warrants shall be
governed by, construed and enforced in accordance with the laws of
the State of Delaware. The parties agree that Sacramento County,
California will be the venue of any dispute and will have
jurisdiction over all parties except as to the Warrants.
16. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the alleged breach thereof, or
relating to Consultant's activities or remuneration under this
Agreement, except for any controversy or claim regarding the
Warrants, shall be settled by binding arbitration in California in
accordance with the applicable rules of the American Arbitration
Association, and judgment on the award rendered by the
arbitrator(s) shall be binding on the parties and may be entered in
any court having jurisdiction thereof. Any controversy or claim
regarding the Warrants shall not be resolved pursuant to this
Section but shall be resolved pursuant to the terms of the
Warrants.
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17. Complete Agreement. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof.
This Agreement and its terms may not be changed orally but only by
an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or
discharge is sought.
(Balance of Page Intentionally Left Blank)
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AGREED TO:
"Company"
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
____________________________________
▇▇. ▇▇▇▇▇ ▇.▇▇▇▇▇▇▇▇▇▇,
President and Chief Executive Officer
"Consultant"
LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Vice-President
"Prag"
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, individually
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