Congress Financial Consent Letter for Perma-Fix Loan to M&EC Acquisition
Summary
Perma-Fix Environmental Services, Inc. seeks approval from Congress Financial Corporation to loan funds to East Tennessee Materials and Energy Corporation (M&EC) as part of acquiring an 80% equity interest in M&EC. The letter outlines the strategic importance of the acquisition, the intended use of funds, and the terms of the loan, including repayment over three years with interest. Congress Financial's consent is required under an existing loan and security agreement. The letter is signed by both parties, confirming approval for the initial and future loans as needed for the acquisition.
EX-4.2 4 0004.txt CONGRESS CONSENT - M&EC ACQUISITION =========================== PERMA-FIX ENVIRONMENTAL SERVICES, INC. =========================== July 25, 2000 Mr. Gary Dixon Congress Financial Corporation (Florida) 777 Brickell Avenue, Suite 808 Miami, FL 33131 Re: Acquisition of 80% Equity Interest in M&EC Dear Gary: Pursuant to our discussion, please find enclosed a copy of the letter of intent for the purchase by Perma-Fix Environmental Services, Inc. of an 80% equity interest in East Tennessee Materials and Energy Corporation ("M&EC"). This represents a very strategic acquisition of a unique mixed waste facility, which is located directly on a Department of Energy ("DOE") site and holds three Broad Spectrum contracts. The combination of the Gainesville mixed waste facility, DSSI, and now M&EC places Perma- Fix in a commanding position to capture a large portion of the mixed waste market. As you may recall, M&EC is in a start-up mode, currently designing and building the processing equipment, after having spent a great deal of time and money obtaining the RAD license and RCRA permits, leasing and preparing the facility within the K-1200 DOE building and putting a structure in place to be able to begin processing. Attached for your reference is the current financial model, as is being used by Ryan, Beck and Larkspur Capital, and an initial draft of a June 30, 2000 proforma balance sheet. As a condition of the letter of intent and in an effort to meet the conditions of the Broad Spectrum contracts for waste processing deadlines, Perma-Fix agreed to loan M&EC $50,000 at the date of signing the letter of intent and certain additional funds over the next several months, as required to complete the start-up. A portion of the `use of funds' from the equity offering was specifically for the purpose of building the equipment, $2.0 million in the initial models, which has now been expanded for an additional $4.0 million of start-up and working capital funds, both of which are to now be funded from the proposed $25.0 million of equity/sub-debt offering. All funds loaned by PESI to M&EC will be documented on a promissory note and security agreement to be repaid over a proposed three-year period, with interest only (at prime plus 1 3/4%) during the first year. As discussed, a portion of the $750,000 RBB Bank bridge loan was intended to fund such M&EC acquisition activities. 1940 N.W. 67TH PLACE, SUITE A * GAINESVILLE, FL 32653 * TEL. (352) 373-4200 * FAX ###-###-#### Pursuant to the terms of our loan and security agreement with Congress Financial, we would like to request your approval and consent to loan to M&EC the initial $50,000, as contained in the letter of intent, and certain additional funds as deemed appropriate by management so as to initiate processing under the Broad Spectrum contract. Please advise if you have any questions or concerns on the above. Sincerely, /s/ Richard T. Kelecy Richard T. Kelecy Chief Financial Officer Approval and Consent: /s/ Gary Dixon VP _________________________ Gary Dixon 7/31/00 _______________ Date RTK/sm cc: Dr. Louis F. Centofanti Enclosure(s)
