<SUBMISSION>
<ACCESSION-NUMBER>0000948600-02-000053
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20020630
<FILING-DATE>20020814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PERMA FIX ENVIRONMENTAL SERVICES INC
<CIK>0000891532
<ASSIGNED-SIC>4955
<IRS-NUMBER>581954497
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-11596
<FILM-NUMBER>02735958
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1940 NORTHWEST 67TH PLACE
<STREET2>SUITE A
<CITY>GAINESVILLE
<STATE>FL
<ZIP>32653
<PHONE>3523734200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1940 NW 67TH PL
<STREET2>SUITE A
<CITY>GAINESVILLE
<STATE>FL
<ZIP>32653
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q.htm
<DESCRIPTION>FORM 10-Q (SECOND QUARTER 2002)
<TEXT>
<HTML>
<HEAD>
<META NAME="Generator" CONTENT="Microsoft FrontPage 4.0">
<META NAME="DATE" CONTENT="8/1/1994">
<TITLE>3RD QTR FORM 10-Q - 1994</TITLE>
</HEAD>
<BODY TEXT="#000000" LINK="#0000ff" VLINK="#551a8b" ALINK="#ff0000" BGCOLOR="#c0c0c0">

<hr noshade size="6" color="#000080">

<P ALIGN="CENTER"><FONT SIZE="+1"><STRONG>SECURITIES AND EXCHANGE COMMISSION<br>
WASHINGTON, D.C. 20549<br>
____________________</STRONG></FONT></P>

<P ALIGN="CENTER"><FONT SIZE="+1"><STRONG>Form 10-Q</STRONG></FONT><STRONG></STRONG></P>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD width="67">
    <p align="center"><STRONG>[X]</STRONG></p>
  </TD>
<TD width="570"><STRONG>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934<br>
  For the quarterly period ended <U>   June 30, 2002  </U></STRONG>

  </TD></TR></TABLE>

<TABLE WIDTH="100%">
<TR VALIGN="TOP"><TD>
<P ALIGN="CENTER"><STRONG>or</STRONG></TD></TR></TABLE>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD width="66">
    <p align="center"><STRONG>[ </STRONG>&nbsp;<STRONG>]</STRONG><FONT SIZE="-1"></FONT></p>
  </TD>
<TD width="571"><STRONG><font size="3">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934<br>
  For the transition period from to</font></STRONG>

  </TD></TR></TABLE>
<P ALIGN="CENTER">Commission File No. <U>   1-11596  </U></P>

<P ALIGN="CENTER"><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
</STRONG><FONT SIZE="-1"><EM>(Exact name of registrant as specified in its charter)</EM></FONT></P>

<P align="left"><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delaware&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58-1954497<br>
</STRONG><FONT SIZE="-1"><EM>(State or other jurisdiction&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(IRS Employer Identification Number)<br>
of incorporation or organization)
</EM></FONT><EM>
</EM>
</P>

<P align="left"><STRONG>1940 N.W. 67th Place, Gainesville, FL&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32653<br>
</STRONG><FONT SIZE="-1"><EM>(Address of principal executive offices)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Zip
Code)</EM></FONT>
</P>

<P ALIGN="CENTER"><STRONG>(352) 373-4200<br>
</STRONG><FONT SIZE="-1"><EM>(Registrant's telephone number)</EM></FONT></P>

<p align="center"><U>                                             &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N/A&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
                                                </U><FONT SIZE="-1"><EM>(Former name, former address and former fiscal year, if changed since last report)</EM></FONT>
<P>Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.  Yes <U>  X  </U> No <U>      </U></P>

<P>Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the close
of the latest practical date.</P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Class</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Outstanding
at August 9, 2002<br>
Common Stock, $.001 Par Value</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>34,276,276<br>
Outstanding at August 9, 2002</u></P>

<P align="left">&nbsp;</P>

<P align="left">&nbsp;</P>

<hr noshade size="6" color="#000080">
<P align="left">&nbsp;</P>

<P ALIGN="CENTER"><STRONG></STRONG><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.</STRONG></P>

<P><STRONG><CENTER>INDEX</CENTER>
</STRONG>
</P>

<P>&nbsp;
</P>

<table border="0" cellpadding="0" cellspacing="1" width="100%">
  <tr>
    <td width="15%" colspan="2"><STRONG>PART I </STRONG></td>
    <td width="73%"><STRONG>FINANCIAL INFORMATION</STRONG></td>
    <td width="12%"><U><font size="3">Page No.</font></U></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%"></td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%">Item 1</td>
    <td width="73%">Financial Statements
      <p>&nbsp;</p>
    </td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%"></td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">Consolidated Balance Sheets -<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June 30, 2002 and December 31, 2001 . . . .
      . . . . . . . . . . . . . . . . . . . . .</td>
    <td width="12%" align="center"><br>
      2</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">Consolidated Statements of Operations -<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three and Six Months Ended June 30, 2002 and
      2001 . . . . . . . . . . . .&nbsp;</td>
    <td width="12%" align="center"><br>
      4</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">Consolidated Statements of Cash Flows -<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Six Months Ended June 30, 2002 and 2001 . .
      . . . . . . . . . . . . . . . . . .&nbsp;</td>
    <td width="12%" align="center"><br>
      5</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">Consolidated Statements of Stockholders' Equity -<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Six Months Ended June 30, 2002 . . . . . . .
      . . . . . . . . . . . . . . . . . . . . .&nbsp;</td>
    <td width="12%" align="center"><br>
      6</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">Notes to Consolidated Financial Statements . . . . . . . . .
      . . . . . . . . . . . . . .&nbsp;</td>
    <td width="12%" align="center">7</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%">Item 2.</td>
    <td width="73%">Management's Discussion and Analysis of<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Condition and Results of
      Operations . . . . . . . . . . . . . . . . . .&nbsp;</td>
    <td width="12%" align="center"><br>
      15</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%">Item 3.</td>
    <td width="73%">Quantitative and Qualitative Disclosures<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;About Market Risk . . . . . . . . . . . . .
      . . . . . . . . . . . . . . . . . . . . . . . . . . .</td>
    <td width="12%" align="center"><br>
      29</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="15%" colspan="2"><STRONG>PART II </STRONG></td>
    <td width="73%"><strong>OTHER INFORMATION</strong></td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%">Item 1.</td>
    <td width="73%">Legal Proceedings . . . . . . . . . . . . . . . . . . . . .
      . . . . . . . . . . . . . . . . . . . .</td>
    <td width="12%" align="center">30</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%">Item 4.</td>
    <td width="73%">Submission of Matters to a Vote of Security Holders . . . .
      . . . . . . . . . . .&nbsp;</td>
    <td width="12%" align="center">30</td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%"></td>
    <td width="73%">&nbsp;
      <p>&nbsp;</td>
    <td width="12%" align="center"></td>
  </tr>
  <tr>
    <td width="4%"></td>
    <td width="11%">Item 6.</td>
    <td width="73%">Exhibits and Reports on Form 8-K . . . . . . . . . . . . . .
      . . . . . . . . . . . . . .&nbsp;</td>
    <td width="12%" align="center">31</td>
  </tr>
</table>
&nbsp;
<p>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<P><STRONG><font size="3">PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
CONSOLIDATED FINANCIAL STATEMENTS</font></STRONG></P>

<P><STRONG><font size="3">PART I, ITEM 1</font></STRONG></P>

<P><font size="3">The consolidated financial statements included herein have been prepared by the Company (which may be
referred to as we, us or our), without an audit, pursuant to the rules and regulations of the Securities and
Exchange Commission.  Certain information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes the disclosures which are made are
adequate to make the information presented not misleading.  Further, the consolidated financial statements
reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position and results of operations as of and for the periods indicated.</font></P>

<P><font size="3">It is suggested that these consolidated financial statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001.</font></P>

<P><font size="3">The results of operations for the six months ended June 30, 2002, are not necessarily indicative of results to
be expected for the fiscal year ending December 31, 2002.</font></P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P align="center"><font size="-1">-1-</font></P>

<P>&nbsp;</P>

<P><STRONG><font size="3">PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
CONSOLIDATED BALANCE SHEETS</font></STRONG></P>

<TABLE WIDTH="622">
<TR VALIGN="BOTTOM"><TD width="421"><font size="3">(Amounts in Thousands, Except for Share Amounts)</font></TD>
<TD width="86">
<P ALIGN="CENTER"><font size="3">June 30,<br>
2002<br>
(Unaudited)</font></P>

  </TD>
<TD width="95">
<P ALIGN="CENTER"><font size="3">December 31,
2001</font></TD></TR></TABLE>

<TABLE WIDTH="619">
<TR VALIGN="TOP"><TD width="590" colspan="5">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">ASSETS</font></TD>
<TD ALIGN="RIGHT" width="76"></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">Current assets:</font></TD>
<TD ALIGN="RIGHT" width="76"></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Cash</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;860</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Restricted cash</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">20</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">20</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Accounts receivable, net of allowance for doubtful<br>
    </font>&nbsp;&nbsp;&nbsp;&nbsp;<font size="3">accounts of $660 and $725</font></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"><font size="3">17,861</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">
<BR WP="BR1">17,191</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Inventories</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">760</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">756</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Prepaid expenses</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">2,740</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">1,651</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Other receivables</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">60</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">        142</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"></TD>
<TD ALIGN="RIGHT" width="76">
  <hr noshade size="3" color="#000080" width="86%" align="right">
  </TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68">
  <hr noshade size="3" color="#000080" width="86%">
  </TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">           Total current assets</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">21,531</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">20,620</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"></TD>
<TD ALIGN="RIGHT" width="76"></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">Property and equipment:</font></TD>
<TD ALIGN="RIGHT" width="76"></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Buildings and land</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">15,384</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">15,210</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Equipment</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">28,324</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">26,915</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Vehicles</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">2,192</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">2,120</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Leasehold improvements</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">10,348</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">10,029</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Office furniture and equipment</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">1,612</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">1,657</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Construction-in-progress</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">5,202</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">      4,382</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428" align="right"></TD>
<TD ALIGN="RIGHT" width="76">
  <hr noshade size="3" color="#000080" width="86%" align="right">
  </TD>
<TD width="11" align="right"></TD>
<TD ALIGN="RIGHT" width="68">
  <hr noshade size="3" color="#000080" width="86%" align="right">
  </TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">63,062</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">60,313</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Less accumulated depreciation and amortization</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">(13,737</font></TD>
<TD width="11"><font size="3">)</font></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">   (11,940</font></TD>
<TD width="7"><font size="3">)</font></TD></TR>
<TR VALIGN="TOP"><TD width="428"></TD>
<TD ALIGN="RIGHT" width="76">
  <hr noshade size="3" color="#000080" width="86%" align="right">
  </TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68">
  <hr noshade size="3" color="#000080" width="86%" align="right">
  </TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">          Net property and equipment</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">49,325</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">48,373</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"></TD>
<TD ALIGN="RIGHT" width="76"></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">Intangibles and other assets:</font></TD>
<TD ALIGN="RIGHT" width="76"></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Permits, net</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">11,956</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">20,639</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Goodwill, net</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">15,281</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">6,509</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">      Other assets</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">2,671</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">      2,996</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"></TD>
<TD ALIGN="RIGHT" width="76">
  <hr noshade size="3" color="#000080" width="86%" align="right">
  </TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68">
  <hr noshade size="3" color="#000080" width="86%" align="right">
  </TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"><font size="3">          Total assets</font></TD>
<TD ALIGN="RIGHT" width="76"><font size="3">$	100,764</font></TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68"><font size="3">$  99,137</font></TD>
<TD width="7"></TD></TR>
<TR VALIGN="TOP"><TD width="428"></TD>
<TD ALIGN="RIGHT" width="76">
  <hr noshade size="5" color="#000080" width="86%">
  </TD>
<TD width="11"></TD>
<TD ALIGN="RIGHT" width="68">
  <hr noshade size="5" color="#000080" width="86%">
  </TD>
<TD width="7"></TD></TR></TABLE>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P align="center">The accompanying notes are an integral part of these
consolidated financial statements.<br>
<br>
-2-</P>

<P>&nbsp;</P>

<P><FONT SIZE="-1"><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
CONSOLIDATED BALANCE SHEETS, CONTINUED</STRONG></FONT></P>

<TABLE WIDTH="582">
<TR VALIGN="TOP"><TD width="373">
<font size="3">
<BR WP="BR1"><BR WP="BR2">
(Amounts in Thousands, Except for Share Amounts)</font></TD>
<TD width="91" align="center">
<P ALIGN="CENTER"><font size="3">June 30,<br>
2002<br>
(Unaudited)</font></P>

  </TD>
<TD width="2" align="center"><font size="3">
<BR WP="BR1"><BR WP="BR2"></font></TD>
<TD width="90" align="center">
<font size="3">
<BR WP="BR1">December 31,
2001</font></TD></TR></TABLE>

<TABLE WIDTH="581">
<TR VALIGN="TOP"><TD width="560" colspan="6">
    <hr align="right" noshade size="3" color="#000080">
    <p>&nbsp;</TD>
</TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">LIABILITIES AND STOCKHOLDERS' EQUITY</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"></TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">Current liabilities:</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"></TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">$&nbsp;10,017</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">$	7,167</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current environmental accrual</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">782</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">1,202</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">8,011</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">8,431</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">3,189</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">2,989</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">21,999</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">19,789</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><br>
    <font size="3">Environmental accruals</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><br>
  <font size="3">2,241</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3"><br>
  2,332</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">Accrued closure costs</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">4,925</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">4,919</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">Other long-term liabilities</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">1,027</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">814</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">Long-term debt, less current portion</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">26,216</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">28,157</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"><U></TD></TR>
<TR VALIGN="TOP"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term liabilities</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">34,409</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">36,222</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">56,408</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">56,011</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">Commitments and Contingencies (see Note 5)</font>
</TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><FONT FACE="Times New Roman" size="3">-- </FONT></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" size="3">-- </FONT></TD>
<TD ALIGN="RIGHT" width="11"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><FONT FACE="Times New Roman" size="3">Preferred Stock of subsidiary, $1.00 par value; 1,467,396<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized, 1,284,730 shares issued and<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;outstanding, liquidation value $1.00 per share</FONT></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="77"><FONT FACE="Times New Roman" size="3">1,285</FONT></TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
<font size="3">
<BR WP="BR1"><BR WP="BR2">
1,285</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385">
Stockholders' equity:</TD>
<TD width="8"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="77"></TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" width="72"></TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><FONT FACE="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock, $.001 par value; 2,000,000 shares<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorized, 2,500 shares issued and outstanding</FONT></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77">
<font size="3">
<BR WP="BR1">--</font></TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
<font size="3">
<BR WP="BR1">--</font> </TD>
<TD width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><FONT FACE="Times New Roman" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock, $.001 par value; 75,000,000 shares<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorized, 35,221,359 and 35,008,005 shares&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued,
including 988,000 shares held as treasury<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;stock,
respectively</FONT></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="77"><FONT FACE="Times New Roman" size="3">35</FONT></TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72">
<font size="3">
<BR WP="BR1">35</font></TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="385"><FONT FACE="Times New Roman" size="3">	Additional paid-in capital</FONT></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><FONT FACE="Times New Roman" size="3">66,546</FONT></TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" size="3">66,042</FONT></TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="385"><FONT FACE="Times New Roman" size="3">	Accumulated deficit</FONT></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><FONT FACE="Times New Roman" size="3">(21,481</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" size="3">)</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" size="3">(22,216</FONT></TD>
<TD ALIGN="RIGHT" width="11"><FONT FACE="Times New Roman" size="3">)</FONT></TD></TR>
<TR VALIGN="BOTTOM"><TD width="385"><FONT FACE="Times New Roman" size="3">	Interest rate swap</FONT></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><FONT FACE="Times New Roman" size="3">(167</FONT></TD>
<TD ALIGN="left" width="7"><FONT FACE="Times New Roman" size="3">)</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" size="3">(158</FONT></TD>
<TD ALIGN="RIGHT" width="11"><FONT FACE="Times New Roman" size="3">)</FONT></TD></TR>
<TR VALIGN="BOTTOM"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><FONT FACE="Times New Roman" size="3">44,933</FONT></TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" size="3">43,703</FONT></TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">						Less Common Stock in treasury at cost; 988,000 shares<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued and outstanding</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="77"><font size="3">(1,862</font></TD>
<TD ALIGN="left" width="7"><font size="3"><br>
  )</font></TD>
<TD ALIGN="RIGHT" width="72"><font size="3"><br>
  (1,862</font></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="11"><font size="3">)</font></TD></TR>
<TR VALIGN="TOP"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="77">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77"><font size="3">43,071</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">    41,841</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" width="77">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="11"></TD></TR>
<TR VALIGN="TOP"><TD width="385"><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity</font></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="77"><font size="3">$	100,764</font></TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72"><font size="3">$	99,137</font></TD>
<TD ALIGN="RIGHT" width="11"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="385"></TD>
<TD width="8"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="77">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="7"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="11"></TD></TR></TABLE>

<P align="center">The accompanying notes are an integral part of these
consolidated financial statements.<br>
<br>
-3-</P>

<P align="center">&nbsp;</P>

<P align="left">&nbsp;</P>

<P><STRONG><font size="3">PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
CONSOLIDATED STATEMENTS OF OPERATIONS<br>
</font></STRONG><FONT SIZE="-1"><STRONG>(Unaudited)</STRONG></FONT></P>

<TABLE WIDTH="651">
<TR VALIGN="BOTTOM"><TD width="349"></TD>
<TD COLSPAN="4" width="138">
<P ALIGN="CENTER"><FONT SIZE="-1"></FONT><FONT SIZE="-1">Three Months Ended<br>
June 30,</FONT></P>

  </TD>
<TD COLSPAN="4" width="122"><FONT SIZE="-1">
<P ALIGN="CENTER">Six Months Ended<br>
June 30,</FONT></P>

  </TD>
<TD VALIGN="TOP" width="5"><FONT SIZE="-1"></TD>
<TD VALIGN="TOP" width="5"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="349"></TD>
<TD COLSPAN="4" width="138">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD COLSPAN="4" width="122">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD VALIGN="TOP" width="5"></TD>
<TD VALIGN="TOP" width="5"></TD></TR>
<TR><TD width="349"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(Amounts in Thousands, Except for Per Share Amounts)</FONT></TD>
<TD width="58"><FONT SIZE="-1">
<P ALIGN="CENTER">     2002</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50">
<P ALIGN="CENTER"></FONT><FONT SIZE="-1">     2001</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD width="47">
<P ALIGN="CENTER"></FONT><FONT SIZE="-1">    2002</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="CENTER" width="47"></FONT><FONT SIZE="-1">     2001</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="5"><FONT SIZE="-1"></TD>
<TD VALIGN="TOP" width="5"></TD>
<TD VALIGN="TOP" width="5"></TD></TR>
<TR><TD colspan="11" width="643">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="BOTTOM"><TD width="349"><font size="2">
<BR WP="BR1"><BR WP="BR2">Net revenues</font></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">$	22,485</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">$	17,840</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">$	38,936</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">$	36,552</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Cost of goods sold</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">13,565</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">12,734</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">25,926</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">26,257</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD ALIGN="RIGHT" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><font size="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit</font></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">8,920</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">5,106</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">13,010</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">10,295</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Selling, general and administrative expenses</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">4,042</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">3,435</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">8,120</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">6,905</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Depreciation and amortization</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">1,049</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">1,015</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">2,076</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">2,032</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD ALIGN="RIGHT" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from operations</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">3,829</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">656</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">2,814</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">1,358</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Other income (expense):</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1"></TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50"></TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47"></TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47"></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">4</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">8</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">9</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">16</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">(722</FONT></TD>
<TD width="7"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="50"><FONT SIZE="-1">(819</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT SIZE="-1">(1,427</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT SIZE="-1">(1,535</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense-Warrants</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT FACE="Times New Roman" SIZE="-1">7</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT FACE="Times New Roman" SIZE="-1">(234</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense-financing fees</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" SIZE="-1">(260</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="50"><FONT FACE="Times New Roman" SIZE="-1">(565</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT FACE="Times New Roman" SIZE="-1">(517</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT FACE="Times New Roman" SIZE="-1">(823</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" SIZE="-1">(54</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="50"><FONT FACE="Times New Roman" SIZE="-1">(1</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT FACE="Times New Roman" SIZE="-1">(81</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT FACE="Times New Roman" SIZE="-1">(18</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD ALIGN="RIGHT" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss)</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" SIZE="-1">2,797</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT FACE="Times New Roman" SIZE="-1">(714</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT FACE="Times New Roman" SIZE="-1">798</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT FACE="Times New Roman" SIZE="-1">(1,236</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD width="5"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">Preferred Stock dividends</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" SIZE="-1">(32</FONT><FONT SIZE="-1"></FONT></TD>
<TD width="7"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="50"><FONT SIZE="-1">(32</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT SIZE="-1">(63</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT SIZE="-1">(82)</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD ALIGN="RIGHT" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) applicable to Common Stock</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">$	2,765</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">$	(746</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="47"><FONT SIZE="-1">$	735</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">$	(1,318</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1">)</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD ALIGN="RIGHT" width="58">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD colspan="11" width="643">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="TOP"><TD width="349"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Net income (loss) per common share:</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1"></TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50"></TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47"></TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47"></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
<TD width="58" align="right"><FONT SIZE="-1">$	.08</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">$	(.03</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD align="right" width="47"><FONT SIZE="-1">$	.02</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">$	(.06</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1">)</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD width="58" align="right">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD align="right" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
<TD width="58" align="right"><FONT SIZE="-1">$	.06</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">$	(.03</FONT></TD>
<TD width="5"><FONT SIZE="-1">)</FONT></TD>
<TD align="right" width="47"><FONT SIZE="-1">$	.02</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">$	(.06</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1">)</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD width="58" align="right">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD align="right" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1">Number of shares and potential common shares<br>
    </FONT>

    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE="-1">used in computing net income (loss) per common share:</FONT>

  </TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1"></TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> </FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47"></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">34,210</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">22,910</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">34,134</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">22,711</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD ALIGN="RIGHT" width="58">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
<TD ALIGN="RIGHT" width="58"><FONT SIZE="-1">43,556</FONT></TD>
<TD width="7"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="50"></FONT><FONT SIZE="-1">22,910</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">43,216</FONT></TD>
<TD width="5"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="47"></FONT><FONT SIZE="-1">22,711</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-1"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="349"></TD>
<TD ALIGN="RIGHT" width="58">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="7"></TD>
<TD ALIGN="RIGHT" width="50">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="5"></TD>
<TD ALIGN="RIGHT" width="47">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD width="5"></TD>
<TD width="5"></TD></TR></TABLE>
<P><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG></STRONG></FONT></P>

<P align="center">The accompanying notes are an integral part of these
consolidated financial statements.<br>
<br>
-4-</P>

<P><STRONG><font size="3">PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
CONSOLIDATED STATEMENTS OF CASH FLOWS<br>
(Unaudited)</font></STRONG></P>

<TABLE WIDTH="584">
<TR VALIGN="TOP"><TD width="400"></TD>
<TD ALIGN="CENTER" colspan="4" width="192">
<P ALIGN="CENTER"><FONT SIZE="-1">Six Months Ended<br>
June 30,</FONT></P>

  </TD>
</TR>
<TR VALIGN="TOP"><TD width="400"></TD>
<TD ALIGN="CENTER" colspan="4" width="192">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="TOP"><TD width="400"><FONT SIZE="-1">(Amounts in Thousands)</FONT></TD>
<TD ALIGN="CENTER" width="82"><FONT SIZE="-1">2002</FONT></TD>
<TD ALIGN="CENTER" width="15"><FONT SIZE="-1"></TD>
<TD ALIGN="CENTER" width="74"></FONT><FONT SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">2001</FONT><FONT SIZE="-1"></FONT></TD>
<TD width="3"><FONT SIZE="-1">  </FONT></TD></TR>
<TR VALIGN="TOP"><TD width="574" colspan="5">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR></TABLE>

<TABLE WIDTH="591">
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1">Cash flows from operating activities:</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="6"></TD>
<TD ALIGN="RIGHT" width="62"></TD>
<TD ALIGN="left" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Net income (loss)</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;798</FONT></TD>
<TD width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"><FONT SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,236</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to cash provided by<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(used in) operations: </FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62"></TD>
<TD ALIGN="RIGHT" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">2,076</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">2,032</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for bad debt and other reserves</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">91</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">66</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of plant, property and equipment</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">3</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">34</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Warrants for financing</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">234</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="2" width="483"><FONT FACE="Times New Roman" SIZE="-1">	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities, net of effects from business acquisitions:</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></TD>
<TD ALIGN="RIGHT" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(761</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">470</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses, inventories and other assets</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(364</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">(271</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">1,904</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">207</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="left" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">          	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operations</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="72"><FONT FACE="Times New Roman" SIZE="-1">3,747</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">1,536</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="left" width="18"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"></FONT><FONT FACE="Times New Roman" SIZE="-1">Cash flows from investing activities:</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="72"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD VALIGN="TOP" width="6"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="62"></TD>
<TD ALIGN="left" VALIGN="TOP" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment, net</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(2,616</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">(1,021</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of plant, property and equipment</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">139</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used for acquisition consideration</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">(10,083</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in restricted cash, net</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(3</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">(11</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="left" width="18"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">          	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(2,619</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">(10,976</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="left" width="18"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">Cash flows from financing activities:</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="72"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD VALIGN="TOP" width="6"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="62"></TD>
<TD ALIGN="left" VALIGN="TOP" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net repayments of revolving loan and term note facility</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(1,292</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">(62</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal repayments of long-term debt</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(1,024</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">(1,330</FONT></TD>
<TD ALIGN="left" width="18"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of long-term debt</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">6,469</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of stock</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">418</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT FACE="Times New Roman" SIZE="-1">4,819</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT FACE="Times New Roman" SIZE="-1">          	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT FACE="Times New Roman" SIZE="-1">(1,898</FONT></TD>
<TD width="6"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT FACE="Times New Roman" SIZE="-1">9,896</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="18"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">(Decrease) </FONT><FONT SIZE="-1">increase in cash</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT SIZE="-1">(770</FONT></TD>
<TD width="6"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT SIZE="-1">456</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"></FONT><FONT SIZE="-1">Cash at beginning of period </FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT SIZE="-1">860</FONT></TD>
<TD width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"></FONT><FONT SIZE="-1">498</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"></TD>
<TD ALIGN="RIGHT" width="72">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"></FONT><FONT SIZE="-1">Cash at end of period</FONT></TD>
<TD width="72">
  <p align="right"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90</FONT></p>
  </TD>
<TD width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;954</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"></TD>
<TD width="72">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="18"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"></FONT><FONT SIZE="-1">Supplemental disclosure:</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT SIZE="-1"></TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62"></TD>
<TD ALIGN="RIGHT" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,232</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="62"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,088</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="405"></FONT><FONT SIZE="-1">Non-cash investing and financing activities:</FONT></TD>
<TD ALIGN="RIGHT" width="72"><FONT SIZE="-1"></TD>
<TD width="6"></TD>
<TD ALIGN="RIGHT" width="62"></TD>
<TD ALIGN="RIGHT" width="18"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for services</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72"><FONT SIZE="-1">23</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="62"></FONT><FONT SIZE="-1">11</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1">  	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for payment of dividends</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72"><FONT SIZE="-1">63</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="62"></FONT><FONT SIZE="-1">155</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1">	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for acquisition</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72"><FONT SIZE="-1">--</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="62"></FONT><FONT SIZE="-1">2,916</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1">	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Preferred Stock of subsidiary for acquisition</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72"><FONT SIZE="-1">--</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="62"></FONT><FONT SIZE="-1">1,285</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1"> 	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Warrants for services and financing, net</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72"><FONT SIZE="-1">--</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="62"></FONT><FONT SIZE="-1">1,539</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1"> 	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on interest rate swap</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72"><FONT SIZE="-1">(9</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="62"><FONT SIZE="-1">(88</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD width="405"><FONT SIZE="-1"> 	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt incurred for purchase of property and equipment</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="72"><FONT SIZE="-1">414</FONT></TD>
<TD VALIGN="BOTTOM" width="6"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="62"></FONT><FONT SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" width="18"><FONT SIZE="-1"></TD></TR></TABLE>

<P align="center">The accompanying notes are an integral part of these
consolidated financial statements<br>
<br>
-5-</P>

<P align="left">&nbsp;</P>

<P><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY<br>
(Unaudited, for the six months ended June 30, 2002)</STRONG></P>

<TABLE WIDTH="100%">
<TR VALIGN="TOP"><TD COLSPAN="9"></TD></TR>
<TR VALIGN="BOTTOM"><TD>
<P ALIGN="CENTER"><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">(Amounts in thousands,<br>
except for share amounts)</FONT></P>

  </TD>
<TD ALIGN="RIGHT"><FONT SIZE="-2"><U><CENTER>Preferred Stock<br>
  </CENTER>
	</U> Shares 	Amount</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-2">  <U><CENTER>Common Stock<br>
  </CENTER>
	</U>    Shares	Amount   </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-2"><CENTER>Additional<br>
  Paid-In<br>
  Capital</CENTER>
</FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-2">Accumulated<br>
  Deficit</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT">
<P ALIGN="CENTER"><FONT SIZE="-2">Interest<br>
Rate Swap</FONT></P>

  </TD>
<TD ALIGN="RIGHT"><FONT SIZE="-2">
<P ALIGN="CENTER">Common
Stock<br>
Held In<br>
Treasury</FONT></P>

  </TD>
<TD ALIGN="RIGHT"><FONT SIZE="-2">
<P ALIGN="CENTER">Total<br>
Stockholders<br>
Equity</FONT></P>

  </TD></TR>
<TR VALIGN="BOTTOM"><TD COLSPAN="9"><FONT SIZE="-2"></font>
    <hr align="right" noshade size="5" color="#000080">
  </TD></TR></TABLE>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD width="140"><FONT SIZE="-2"><STRONG>Balance at December 31,<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001</STRONG></FONT></TD>
<TD ALIGN="RIGHT" width="28"><FONT SIZE="-2"><br>
  2,500</FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="17"><FONT SIZE="-2"><br>
  $	--  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="54"><FONT SIZE="-2"><br>
  35,008,005</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></font></TD>
<TD ALIGN="RIGHT" width="20"><FONT SIZE="-2"><br>
  $35</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="41"><FONT SIZE="-2"><br>
  $66,042</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"><FONT SIZE="-2"><br>
  $( 22,216</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"><br>
  )</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD width="30"><FONT SIZE="-2"> <br>
 $(158</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"><br>
  )</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="39"><FONT SIZE="-2"><br>
  $(1,862</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2">
<P ALIGN="CENTER"><br>
)</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="41"><FONT SIZE="-2"><br>
  $41,841</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD></TR>
<TR VALIGN="TOP"><TD width="140"></TD>
<TD ALIGN="RIGHT" width="28"></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD ALIGN="RIGHT" width="4"></TD></TR>
<TR VALIGN="TOP"><TD width="140"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">Comprehensive income:</FONT></TD>
<TD ALIGN="RIGHT" width="28"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD ALIGN="RIGHT" width="4"></TD></TR>
<TR VALIGN="TOP"><TD width="140"><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income</FONT></TD>
<TD ALIGN="RIGHT" width="28"><FONT SIZE="-2">--  </FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="17"></FONT><FONT SIZE="-2">--  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="54"></FONT><FONT SIZE="-2">--  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="20"></FONT><FONT SIZE="-2">--  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="41"></FONT><FONT SIZE="-2">--  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">735</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">--  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">--  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">735</FONT></TD>
<TD width="4"><FONT SIZE="-2"> </FONT></TD></TR>
<TR VALIGN="TOP"><TD width="140"><FONT SIZE="-2">	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; income:</FONT></TD>
<TD ALIGN="RIGHT" width="28"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD width="4"></TD></TR>
<TR VALIGN="TOP"><TD width="140"><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on interest rate<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    swap</FONT></TD>
<TD ALIGN="RIGHT" width="28"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="17"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="54"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="20"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="41"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"><FONT SIZE="-2"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"><FONT SIZE="-2"><br>
  (9</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"><br>
  )</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="39"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"><FONT SIZE="-2"><br>
    (9</FONT></TD>
<TD width="4"><FONT SIZE="-2"><br>
  )</FONT></TD></TR>
<TR><TD width="140"><FONT SIZE="-2">			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    income</FONT></TD>
<TD ALIGN="RIGHT" width="28"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="5"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="17"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="54"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="20"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="41"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></FONT><FONT SIZE="-2"> </FONT></TD>
<TD ALIGN="RIGHT" width="48"><FONT SIZE="-2"><br>
  --  </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"><FONT SIZE="-2"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39"><FONT SIZE="-2"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="4"></FONT><FONT SIZE="-2"> </FONT></TD>
<TD ALIGN="RIGHT" width="41"><FONT SIZE="-2"><br>
  726</FONT></TD>
<TD VALIGN="TOP" width="4"><FONT SIZE="-2"></TD></TR>
<TR VALIGN="TOP"><TD width="140"></TD>
<TD ALIGN="RIGHT" width="28"></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"></FONT><FONT SIZE="-2"> </FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT SIZE="-2"></TD>
<TD ALIGN="RIGHT" width="20"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"></TD>
<TD width="4"></TD></TR>
<TR VALIGN="TOP"><TD width="140"><font size="1">Issuance of Common Stock<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for Preferred Stock<br>
    &nbsp;&nbsp;&nbsp;&nbsp; dividend</font></TD>
<TD ALIGN="RIGHT" width="28"><font size="1">
<BR WP="BR1"><BR WP="BR2">--</font>  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17">
<font size="1">
<BR WP="BR1"><BR WP="BR2">--</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54">
<font size="1">
<BR WP="BR1"><BR WP="BR2">24,217</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20">
<font size="1">
<BR WP="BR1"><BR WP="BR2">--</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
<font size="1">
<BR WP="BR1"><BR WP="BR2">63</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4">
<font size="1">
<BR WP="BR1"><BR WP="BR2"></font></TD>
<TD ALIGN="RIGHT" width="48">
<font size="1">
<BR WP="BR1"><BR WP="BR2">--</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30">
<font size="1">
<BR WP="BR1"><BR WP="BR2">--</font>  </TD>
<TD ALIGN="RIGHT" width="4"><font size="1">
<BR WP="BR1"><BR WP="BR2"></font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39">
<font size="1">
<BR WP="BR1"><BR WP="BR2">--</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
<font size="1">
<BR WP="BR1"><BR WP="BR2">63</font></TD>
<TD width="4"></TD></TR>
<TR VALIGN="TOP"><TD width="140"><font size="1">Issuance of stock for cash<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and services</font></TD>
<TD ALIGN="RIGHT" width="28"><font size="1"><br>
      --</font>  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17">
<font size="1">
<BR WP="BR1">      --</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54">
<font size="1">
<BR WP="BR1">189,137</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20">
<font size="1">
<BR WP="BR1">      --</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
<font size="1">
<BR WP="BR1">441</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48">
<font size="1">
<BR WP="BR1">--</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30">
<font size="1">
<BR WP="BR1">      --</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39">
<font size="1">
<BR WP="BR1">      --</font>  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
<font size="1">
<BR WP="BR1">441</font></TD>
<TD width="4"></TD></TR>
<TR VALIGN="TOP"><TD width="140"></TD>
<TD ALIGN="RIGHT" width="28">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="4"></TD></TR>
<TR><TD width="140"><font size="1">Balance at June 30, 2002</font></TD>
<TD ALIGN="RIGHT" width="28"><font size="1">  2,500</font></TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17"><font size="1">$     --</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54"><font size="1">35,221,359</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20"><font size="1">$35</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"><font size="1">$66,546</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48"><font size="1"> $	(21,481</font></TD>
<TD ALIGN="RIGHT" width="4"><font size="1">)</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30"><font size="1"> $(167</font></TD>
<TD ALIGN="RIGHT" width="4"><font size="1">)</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39"><font size="1">$(1,862</font></TD>
<TD ALIGN="RIGHT" width="4">
<P ALIGN="CENTER"><font size="1">)</font></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41"><font size="1">$43,071</font></TD>
<TD VALIGN="TOP" width="4"></TD></TR>
<TR><TD width="140"></TD>
<TD ALIGN="RIGHT" width="28">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="5"></TD>
<TD ALIGN="RIGHT" width="17">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="54">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="20">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="48">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="30">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="39">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="41">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD VALIGN="TOP" width="4"></TD></TR></TABLE>
&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements.<br>
<br>
-6-</p>
<p align="left">&nbsp;</p>
<p>&nbsp;</p>
<P><FONT SIZE="-1"></FONT><font size="3"><CENTER><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
</STRONG></CENTER>
<STRONG><CENTER>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
June 30, 2002<br>
(Unaudited)
</STRONG></CENTER>
</font></P>

<P><font size="3">Reference is made herein to the notes to consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 2001.<br>
<br>
<b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Summary of Significant Accounting Policies</u></b></font></P>

<font face="Times New Roman" size="3">Our accounting policies are as set forth in the notes to consolidated financial statements referred to above.</font>

<P><font face="Times New Roman" size="3">There is no provision for income taxes for the three and six months ended June 30, 2002, as the taxes are offset
by prior year net operating loss carryforwards.</font>

<P><font face="Times New Roman" size="3"><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Recently
Adopted Accounting Standards</u></b></font><P><font size="3">The Company adopted the Financial Accounting Standards Board FASB Statements No. 141, <EM>Business
Combinations </EM>(&quot;SFAS 141"), and No. 142, <EM>Goodwill and Other Intangible Assets </EM>(&quot;SFAS 142"), effective
January 1, 2002. SFAS 141 requires the use of the purchase method of accounting and prohibits the use of
the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS
141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired
intangible assets meet certain criteria, SFAS 141 applies to all business combinations initiated after June 30,
2001, and for purchase business combinations completed on or after July 1<EM>, </EM>2001. It also requires, upon
adoption of SFAS 142, that the Company reclassify the carrying amounts of intangible assets and goodwill
based on the criteria in SFAS 141.</font></P>

<p><font size="3">SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test
goodwill for impairment at least annually.  In addition, SFAS 142 requires that the Company identify
reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful
lives of other existing recognized intangible assets, and cease amortization of intangible assets with an
indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142.   SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is also required to reassess the
useful lives of other intangible assets within the first interim quarter after adoption of SFAS 142.  The
Company has completed the first step of its evaluation of intangible assets for impairment, and has
determined that no impairment existed as of January 1, 2002.  The Company has discontinued amortizing its
indefinite-life intangible assets (goodwill and permits).  Prior to January 1, 2002, goodwill and permits were
amortized on a straight-line basis over ten to forty years.  Amortization expense for goodwill and permits for
the three and six months ended June 30, 2001, was $292,000 and $584,000, respectively.</font></p>
<p><font face="Times New Roman" size="3">Results for June 30, 2001, assuming the discontinuation of amortization would be as follows:</font></p>

<TABLE WIDTH="579">
<TR><TD width="298">
    <p align="center"></TD>
<TD COLSPAN="3" ALIGN="RIGHT" width="126">
<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">Three Months Ended<br>
June 30, 2001</FONT></P>

  </TD>
<TD width="9"></TD>
<TD COLSPAN="4" ALIGN="CENTER" VALIGN="TOP" width="159"><FONT SIZE="-1">Six Months Ended<br>
  June 30, 2001</FONT></TD></TR>
<TR><TD width="298"></TD>
<TD COLSPAN="3" ALIGN="RIGHT" width="126">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="9"></TD>
<TD COLSPAN="4" ALIGN="CENTER" VALIGN="TOP" width="159">
  <hr align="right" noshade size="3" color="#000080">
  </TD></TR>
<TR><TD width="298"><FONT SIZE="-1">(Amounts in thousands, except per share amount)</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="66"><FONT SIZE="-1">Total</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="7"></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="55"></FONT><FONT SIZE="-1">Per Share</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="9"></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="62"></FONT><FONT SIZE="-1">Total</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="15"></TD>
<TD COLSPAN="2" ALIGN="CENTER" VALIGN="TOP" width="70"></FONT><FONT SIZE="-1">Per Share</FONT></TD></TR>
<TR><TD colspan="9" width="568">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="BOTTOM"><TD width="298"><FONT SIZE="-1">Net loss, as reported</FONT></TD>
<TD ALIGN="RIGHT" width="66"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;(714</FONT></TD>
<TD width="7" align="left"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="55"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;	(.03</FONT></TD>
<TD width="9" align="left"><FONT SIZE="-1">)</FONT></TD>
<TD width="62" align="right"><FONT SIZE="-1">$	(1,236</FONT></TD>
<TD width="15" align="left"><FONT SIZE="-1">)</FONT></TD>
<TD width="52" align="right"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;(.06</FONT></TD>
<TD width="12" align="left"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM"><TD width="298"><FONT SIZE="-1">Amortization of goodwill and permits</FONT></TD>
<TD ALIGN="RIGHT" width="66"><FONT SIZE="-1">292</FONT></TD>
<TD width="7" align="left"></TD>
<TD ALIGN="RIGHT" width="55"><FONT SIZE="-1">.01</FONT></TD>
<TD width="9" align="left"></TD>
<TD width="62" align="right">
<P ALIGN="RIGHT"></FONT><FONT SIZE="-1">584</FONT></TD>
<TD width="15" align="left"></TD>
<TD width="52" align="right">
<P ALIGN="RIGHT"></FONT><FONT SIZE="-1">.03</FONT></TD>
<TD width="12" align="left"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="298"></TD>
<TD ALIGN="RIGHT" width="66">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="7" align="left"></TD>
<TD width="55" align="right">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="9" align="left"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="left" width="15"></TD>
<TD ALIGN="RIGHT" width="52">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD width="12" align="left"></TD></TR>
<TR><TD width="298"><FONT SIZE="-1">Net loss, as adjusted</FONT></TD>
<TD ALIGN="RIGHT" width="66"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;	(422</FONT></TD>
<TD ALIGN="left" width="7"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="55"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;	(.02</FONT></TD>
<TD ALIGN="left" width="9"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="62"><FONT SIZE="-1">$&nbsp;&nbsp;	(652</FONT></TD>
<TD ALIGN="left" width="15"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="52"><FONT SIZE="-1">$&nbsp;&nbsp;&nbsp;&nbsp;(.03</FONT></TD>
<TD VALIGN="BOTTOM" width="12" align="left"><FONT SIZE="-1">)</FONT></TD></TR>
<TR><TD width="298"></TD>
<TD ALIGN="RIGHT" width="66">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="left" width="7"></TD>
<TD ALIGN="RIGHT" width="55">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="left" width="9"></TD>
<TD ALIGN="RIGHT" width="62">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="left" width="15"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="52">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD VALIGN="BOTTOM" width="12" align="left"></TD></TR>
</TABLE>

&nbsp;
<p align="center">-7-</p>
<p>&nbsp;</p>
<p>Pursuant to the Company's adoption of SFAS 141 and 142, the Company changed its method of recording
acquired permits in connection with business combinations.  For all acquisitions prior to July 2001, the
Company allocated the excess purchase price between goodwill and permits, based upon the percentage of
revenue generated through permitted activities.  If all revenue/business base of an entity was derived from
and subject to the permit, then the full intangible amount was recorded to permits.  The permits, therefore
were allocated this intangible value, and were generally amortized over a 20 year life.</p>
<p>For permits acquired beginning in July 2001 the Company will determine the actual cost to obtain such a
permit and record it as an intangible permit with an indefinite life.  The Company will expense as incurred
any ongoing costs to maintain and renew its permits.&nbsp; These ongoing costs are significantly less than the initial costs to obtain a permit.</p>
<P>In conjunction with the final purchase price allocation as completed in June 2002, the Company reclassified
a portion of the permits recorded upon the acquisition of M&amp;EC on June 25, 2001.  Permits were originally
recorded at $10,553,000 when the Company recorded the acquisition in June 2001.  During June 2002,
$9,149,000 was reclassified from permits to goodwill, additional accrued liabilities were recognized in the
amount of $63,000 and $1,403,000 recorded in permits which represents the actual costs in obtaining the
permits.
<P><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Earnings Per Share</u></b>
<p>Basic EPS is based on the weighted average number of shares of Common Stock outstanding during the
period.  Diluted EPS includes the dilutive effect of potential common shares.  Diluted loss per share for the
three and six months ended June 30, 2001, does not include potential common shares as their effect would
be anti-dilutive.

<P>The following is a reconciliation of basic net income (loss) per share and diluted net income (loss) per share
for the three and six months ended June 30, 2002 and 2001.<br>

<TABLE WIDTH="100%">
<TR VALIGN="TOP"><TD></TD>
<TD COLSPAN="3">
<P ALIGN="CENTER"><FONT SIZE="-1">Three Months Ended<br>
June 30,</FONT></P>

  </TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD COLSPAN="3" ALIGN="RIGHT">
<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">Six Months Ended<br>
June 30,</FONT></P>

  </TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD COLSPAN="3">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD COLSPAN="3" ALIGN="RIGHT">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">2002</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="CENTER"></FONT><FONT FACE="Times New Roman" SIZE="-1">2001</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="CENTER"></FONT><FONT FACE="Times New Roman" SIZE="-1">2002</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="CENTER"></FONT><FONT FACE="Times New Roman" SIZE="-1">2001</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD colspan="9">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1">Net income (loss) applicable to Common Stock - basic</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	2,765</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(746</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	735</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(1,318</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Effect of dilutive securities - Preferred Stock dividends</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">32</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">63</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1">Net income (loss) applicable to Common Stock - diluted</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	2,797</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(746</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	798</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(1,318</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">Basic net income (loss) per share</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	0.08</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(0.03</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	0.02</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(0.06</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Diluted net income (loss) per share</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	0.06</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(0.03</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">$	0.02</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">$	(0.06</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">Weighted average shares outstanding - basic</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">34,210</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">22,910</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">34,134</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">22,711</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1">Potential shares exercisable under stock option plans</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">1,237</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">1,197</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1">Potential shares upon exercise of Warrants</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">6,442</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">6,218</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1">Potential shares upon conversion of Preferred Stock</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">1,667</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">1,667</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT FACE="Times New Roman" SIZE="-1">Weighted average shares outstanding - diluted</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">43,556</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">22,910</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">43,216</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">22,711</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD></TR>
<TR VALIGN="TOP"><TD colspan="9">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">Potential shares excluded from above weighted average
share&nbsp;<br>
 calculations due to their anti-dilutive effect<br>
    </FONT>&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman" SIZE="-1">include:</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon exercise of options</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">41,800</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">2,095,949</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">171,800</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">2,095,949</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">     	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon exercise of Warrants</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">7,602,329</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">7,602,329</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">     	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon conversion of Preferred Stock</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"> --</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">1,666,667</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">1,666,667</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR></TABLE>

<P>&nbsp;</P>

<P align="center">-8-</P>

<P>&nbsp;</P>

<P><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Long-term Debt</u></b></P>

<P>Long-term debt consists of the following at June 30, 2002, and December 31, 2001:</P>

<TABLE WIDTH="651">
<TR VALIGN="BOTTOM"><TD width="445">(Amounts in Thousands)</TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD COLSPAN="2" ALIGN="RIGHT" width="79">
<P ALIGN="CENTER">June 30,<U><br>
</U>2002<br>
(Unaudited)</P>

  </TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD COLSPAN="2" ALIGN="RIGHT" width="87">
<P ALIGN="CENTER">December 31,
2001</TD></TR>
<TR VALIGN="TOP"><TD colspan="7" width="643">
    <hr align="right" noshade size="5" color="#000080">
  </TD>
</TR>
<TR VALIGN="TOP"><TD width="445">		Revolving loan facility dated December 22, 2000, borrowings based upon<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;eligible accounts receivable, subject to monthly borrowing  base<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;calculation, variable interest paid monthly at prime rate plus 1%<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5.75% at June 30, 2002), balance due in December 2005.</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">$	6,871</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">$	7,663</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69"></TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		Term Loan Agreement dated December 22, 2000, payable in equal<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;monthly installments of principal of $83, balance due in&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December
2005, variable interest paid monthly at prime rate&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;plus 1 1/2% (6.25%
at June 30, 2002).</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">5,583</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">6,083</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69"></TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		Three promissory notes dated May 27, 1999, payable in equal&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;monthly
installments of principal and interest of $90 over 60&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;months, due June
2004, interest at 5.5% for first three years&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and 7% for remaining two
years.</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">2,016</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">2,495</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69"></TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		Promissory note dated August 31, 2000, payable in one lump sum&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
August 2005, interest paid annually at 7%.</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">3,500</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">3,500</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69"></TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		Senior subordinated notes dated July 31, 2001, payable in one&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;lump sum
on July 31, 2006, interest payable quarterly at an&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;annual interest rate
of 13.5%, net of unamortized debt&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;discount of $1,325 and $1,487.</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">4,300</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">4,138</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69"></TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		Promissory note dated June 25, 2001, payable in semiannual&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;installments
on June 30 and December 31 through&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2008, variable
interest accrues at the&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;applicable federal rate determined under the
IRS Code&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section (8.0% on June 30, 2002) and is payable in a lump&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sum <FONT FACE="Times New Roman">on December 31, 2008.</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">3,614</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">3,634</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69"></TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		Promissory note dated June 25, 2001, payable in semiannual&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;installments
on June 30 and December 31 through&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2008, variable
interest accrues at the applicable&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;federal rate determined under the
IRS Code Section  (8.0%&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on June 30, 2002) and is payable in a lump
sum on&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2008.</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">898</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">903</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69"></TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		Various capital lease and promissory note obligations, payable&nbsp;<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2002 to
2007, interest at rates ranging from 3.9% to 17.9%.  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">  2,623</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">   2,730</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">		</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">29,405</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">31,146</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445">Less current portion of long-term debt</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">3,189</TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">2,989</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="69">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="76">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="69">$	26,216</TD>
<TD VALIGN="MIDDLE" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="76">$	28,157</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR>
<TR VALIGN="TOP"><TD width="445"></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="69">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD VALIGN="MIDDLE" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="76">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" width="5"></TD></TR></TABLE>
<P align="center">-9-</P>

<P>&nbsp;</P>

<P>On December 22, 2000, the company entered into a Revolving Credit, Term Loan and Security Agreement
("Agreement") with PNC Bank, National Association, a national banking association ("PNC") acting as agent
("Agent") for lenders, and as issuing bank.  The Agreement provides for a term loan ("Term Loan") in the amount
of $7,000,000, which requires principal repayments based upon a seven-year amortization, payable over five
years, with monthly installments of $83,000 and the remaining unpaid principal balance due on December 22,
2005.  Payments commenced on February 1, 2001.  The Agreement also provided for a revolving line of credit
("Revolving Credit") with a maximum principal amount outstanding at any one time of $15,000,000.  The
Revolving Credit advances are subject to limitations of an amount up to the sum of a) up to 85% of Commercial
Receivables aged 90 days or less from invoice date, b) up to 85% of Commercial Broker Receivables aged up
to 120 days from invoice date, c) up to 85% of acceptable Government Agency Receivables aged up to 150 days
from invoice date, and d) up to 50% of acceptable unbilled amounts aged up to 60 days, less e) reserves Agent
reasonably deems proper and necessary.  The Revolving Credit advances shall be due and payable in full on
December 22, 2005.  As of June 30, 2002, our excess availability under our Revolving Credit was $5,066,000
based on our eligible receivables.</P>

<P>Pursuant to the Agreement the Term Loan bears interest at a floating rate equal to the prime rate plus
1&nbsp;1/2%, and the
Revolving Credit at a floating rate equal to the prime rate plus 1%.  The Agreement also contains certain
management and credit limit fees payable throughout the term.  The loans are subject to a prepayment fee of
1 1/2 % in the first year, 1% in the second and third years and 3/4% after the third anniversary until termination date.</P>

<P>In December 2000, the Company entered into an interest rate swap agreement related to its Term Loan.  This
hedge, has effectively fixed the interest rate on the notional amount of $3,500,000 of the floating rate $7,000,000
PNC Term Loan.  The Company will pay the counterparty interest at a fixed rate equal to the base rate of 6.25%,
for a period from December 22, 2000, through December 22, 2005, in exchange for the counterparty paying the
Company one month LIBOR rate for the same term (1.84% at June 30, 2002).  The value of the interest rate swap
at January 1, 2001, was deminimus.  At June 30, 2002, the market value of the interest rate swap was in an
unfavorable value position of $167,000 and was recorded as a liability.  During the six months ended June 30,
2002, the Company recorded a loss on the interest rate swap of $9,000 which offset other comprehensive income
on the Statement of Stockholders' Equity.</P>

<P>Effective as of June 2002, the Company and PNC entered into Amendment No. 1 to the Agreement, which,
among other things, increased the letter of credit commitment from $500,000 to $4,500,000 and provided for a
$4.0 million standby letter of credit.  The standby letter of credit was issued to secure certain surety bond
obligations.  Pursuant to the terms of Amendment No. 1, as partial collateral for the issuance of the standby letter
of credit, a reserve of approximately $66,000 will be recorded each month against the availability under the
Revolving Credit beginning July 15, 2002, until such time as the standby letter of credit is fully reserved.  As a
condition precedent to this Amendment No. 1, the Company paid a $50,000 amendment fee to PNC.</P>

<P>Pursuant to the terms of the Stock Purchase Agreements in connection with the acquisition of Perma-Fix of
Orlando, Inc. ("PFO"), Perma-Fix of South Georgia, Inc. ("PFSG") and Perma-Fix of Michigan, Inc. ("PFMI"),
a portion of the consideration was paid in the form of the Promissory Notes, in the aggregate amount of
$4,700,000 payable to the former owners of PFO, PFSG and PFMI.  The Promissory Notes are paid in equal
monthly installments of principal and interest of approximately $90,000 over five years with the first installment
due on July 1, 1999, and having an interest rate of 5.5% for the first three years and 7% for the remaining two
years beginning June 1, 2002. The aggregate outstanding balance of the Promissory Notes total $2,016,000 at
June 30, 2002, of which $973,000 is in the current portion.  Payments of such Promissory Notes are guaranteed
by PFMI under a non-recourse guaranty, which non-recourse guaranty is secured by certain real estate owned
by PFMI.  These Promissory Notes are subject to subordination agreements with the Company's senior and
subordinated lenders. </P>

<P>On August 31, 2000, as part of the consideration for the purchase of Diversified Scientific Services, Inc.
("DSSI"), the Company issued to Waste Management Holdings a long-term unsecured promissory note (the</P>

<P>&nbsp;</P>

<P align="center">-10-</P>

<P>&nbsp;</P>

<P>"Unsecured Promissory Note") in the aggregate principal amount of $3,500,000, bearing interest at a rate of 7%
per annum and having a five-year term with interest to be paid annually and principal due at the end of the term
of the Unsecured Promissory Note.</P>

<P>On July 31, 2001, the Company issued approximately $5.6 million of its 13.50% Senior Subordinated Notes due
July 31, 2006 (the "Notes").  The Notes were issued pursuant to the terms of a Note and Warrant Purchase
Agreement, dated July 31, 2001 (the "Purchase Agreement"), between the Company, Associated Mezzanine
Investors - PESI, L.P. ("AMI"), and Bridge East Capital, L.P. ("BEC"). The Notes are unsecured and are
unconditionally guaranteed by the subsidiaries of the Company.  The Company's payment obligations under the
Notes are subordinate to the Company's payment obligations to its primary lender and to certain other debts of
the Company up to an aggregate amount of $25 million.  The net proceeds from the sale of the Notes were used
to repay a previous short-term loan.</P>

<P>Under the terms of the Purchase Agreement, the Company also issued to AMI and BEC Warrants to purchase
up to 1,281,731 shares of the Company's Common Stock ("Warrant Shares") at an initial exercise price of $1.50
per share (the "Warrants"), subject to adjustment under certain conditions. The Warrants, as issued, also contain
a cashless exercise provision.  The holders of at least 25% of the Warrants or the Warrant Shares may, at any time
and from time to time during the term of the Warrants, request on two occasions registration with the Securities
and Exchange Commission ("SEC") of the Warrant Shares. In addition, the holders of the Warrants are entitled,
subject to certain conditions, to include the Warrant Shares in a registration statement covering other securities
which the Company proposes to register. On August 5, 2002, the Company filed an amended S-3 Registration
Statement with the SEC covering the Warrants. The Registration Statement has not been declared effective as
of the date of this Form 10-Q.</P>

<P>In connection with the sale of the Notes, the Company, AMI, and BEC entered into an Option Agreement, dated
July 31, 2001 (the "Option Agreement").  Pursuant to the Option Agreement, the Company granted each
Purchaser an irrevocable option requiring the Company to purchase any of the Warrants or
the Warrant Shares then held by the Purchaser (the "Put Option").  The Put
Option may be exercised at any time commencing July 31, 2004, and ending July 31, 2008.  In addition, each
Purchaser granted to the Company an irrevocable option to purchase all the Warrants or the Warrant Shares then
held by the Purchaser (the "Call Option").  The Call Option may be exercised at any time commencing July 31,
2005, and ending July 31, 2008.  The purchase price under the Put Option and the Call Option is based on the
quotient obtained by dividing (a) the sum of six times the Company's consolidated EBITDA for the period of the
12 most recent consecutive months minus Net Debt plus the Warrant Proceeds by (b) the Company's Diluted
Shares (as the terms EBITDA, Net Debt, Warrant Proceeds, and Diluted Shares are defined in the Option
Agreement).  Pursuant to the guidance under EITF 00-19 on accounting for and financial presentation of
securities that could potentially be settled in a Company's own stock, the put warrants would be classified outside
of equity based on the ability of the holder to require cash settlement. Also, EITF Topic D-98 discusses the
accounting for a security that will become redeemable at a future determinable date and its redemption is variable.
This is the case with the Warrants as the date is fixed, but the put or call price varies. The EITF gives two possible
methodologies for valuing the securities. The Company has selected to account for the changes in redemption
value immediately as they occur and the Company will adjust the carrying value of the security to equal the
redemption value at the end of each reporting period. On June 30, 2002, the purchase price under the Put Option
was in a negative position and as such no liability was recorded for the redemption of the Put Option.</P>

<P>In conjunction with the Company's acquisition of East Tennessee Materials and Energy Corporation ("M&amp;EC"),
M&amp;EC entered into an installment agreement with the Internal Revenue Service ("IRS") for a principal amount
of $923,000 dated June 7, 2001, for certain withholding taxes owed by M&amp;EC.  The
installment agreement is
payable over eight years on a semiannual basis on June 30 and December 31.  Interest is accrued at the applicable
law rate ("Applicable Rate") pursuant to the provisions of section 6621 of the Internal Revenue Code of 1986 as
amended.  Such rate is adjusted on a quarterly basis and payable in</P>

<P>&nbsp;</P>

<P align="center">-11-</P>

<P>&nbsp;</P>

<P>a lump sum at the end of the installment
period. On June 30, 2002, the rate was 8%.  On June 30, 2002, the outstanding balance was $979,000 including
accrued interest of approximately $81,000.</P>

<P>M&amp;EC also issued a promissory note for a principal amount of $3.7 million to Performance Development
Corporation (PDC), dated June 7, 2001, for monies advanced to M&amp;EC for certain services performed by PDC.
The promissory note is payable over eight years on a semiannual basis on June 30 and December 31. Interest is
accrued at the Applicable Rate (8.00% on June 30, 2002) and payable in a lump sum at the end of the loan period.
On June 30, 2002, the outstanding balance was $3,962,000 including accrued interest of approximately $348,000.
PDC has directed M&amp;EC to make all payments under the promissory note directly to the IRS to be applied to
PDC's obligations under its installment agreement with the IRS.</P>

<TABLE WIDTH="100%">
<TR VALIGN="TOP"><TD><STRONG>5.</STRONG></TD>
<TD><STRONG><U>Commitments and Contingencies</U></STRONG><U></U></TD></TR></TABLE>

<P><STRONG>Hazardous Waste<br>
</STRONG>In connection with our waste management services, we handle both hazardous and non-hazardous waste which
we transport to our own or other facilities for destruction or disposal.  As a result of disposing of hazardous
substances, in the event any cleanup is required, we could be a potentially responsible party ("PRP") for the costs
of the cleanup notwithstanding any absence of fault on our part.</P>

<P><STRONG>Legal<br>
</STRONG>In the normal course of conducting our business, we are involved in various litigation.  There has been no
material change in legal proceedings from those disclosed previously in the Company's Form 10-K for year ended
December 31, 2001, except as stated below.  We are not a party to any litigation or governmental proceeding
which our management believes could result in any judgements or fines against us that would have a material
adverse affect on the Company's financial position, liquidity or results of operations.</P>

<P><FONT FACE="Times New Roman">During the second quarter of 2002 the Company's subsidiary, PFMI, and other PRPs entered into an agreement
in principal to settle the lawsuit filed by the federal government in connection with the Four County Landfill site
pending in the United States District Court for the Northern District of Indiana, South Bend Division.  PFMI
would pay approximately $153,000 of the total settlement.  The settlement is subject to PFMI being allowed
twelve months to pay its portion of the settlement and the parties entering into a definitive settlement agreement.</FONT></P>

<P><STRONG>Permits<br>
</STRONG>We are subject to various regulatory requirements, including the procurement of requisite licenses and permits
at our facilities.  These licenses and permits are subject to periodic renewal without which our operations would
be adversely affected.  We anticipate that, once a license or permit is issued with respect to a facility, the license
or permit will be renewed at the end of its term if the facility's operations are in compliance with the applicable
regulatory requirements.</P>

<P><STRONG>Accrued Closure Costs and Environmental Liabilities<br>
</STRONG>We maintain closure cost financial guarantees to insure the proper decommissioning of our RCRA facilities upon
cessation of operations.  Additionally, in the course of owning and operating on-site treatment, storage and
disposal facilities, we are subject to corrective action proceedings to restore soil and/or groundwater to its original
state.  These activities are governed by federal, state and local regulations and we maintain the appropriate
accruals for restoration. We have recorded accrued liabilities for estimated closure costs and identified
environmental remediation costs.</P>

<P><STRONG>Insurance<br>
</STRONG>We believe we maintain insurance coverage adequate for our needs and which is similar to, or greater than, the
coverage maintained by other companies of our size in the industry. There can be no assurances, however, that
liabilities which may be incurred by us will be covered by our insurance or that the dollar amount of such
liabilities which are covered will not exceed our policy limits.  Under our insurance contracts, we usually accept
self-insured retentions which we believe appropriate for our specific business risks. We are required by EPA
regulations to carry environmental impairment liability insurance providing coverage for damages on a claims-made basis in amounts of at least $1 million per occurrence and $2 million per year in the aggregate. To meet the
requirements of customers, we have exceeded these coverage amounts.</P>

<P>&nbsp;</P>

<P align="center">-12-</P>

<P>&nbsp;</P>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="37">
    <p align="left"><STRONG>6.</STRONG></p>
  </TD>
<TD width="600"><STRONG><U>Operating Segments</U></STRONG><U></U></TD></TR></TABLE>

<P>Pursuant to FAS 131, we define an operating segment as:</P>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD width="22"></TD>
<TD width="23">*</TD>
<TD width="586">A business activity from which we may earn revenue and incur expenses;<br>
  <br>
  </TD></TR>
<TR VALIGN="TOP"><TD width="22"></TD>
<TD width="23">*</TD>
<TD width="586">Whose operating results are regularly reviewed by the President of the segment to make decisions about
resources to be allocated within the segment and assess its performance; and<br>
  <br>
  </TD></TR>
<TR VALIGN="TOP"><TD width="22"></TD>
<TD width="23">*</TD>
<TD width="586">For which discrete financial information is available.</TD></TR></TABLE>

<P>We have eleven operating segments which are defined as each separate facility or location that we operate.  These
segments however, exclude the Corporate headquarters which does not generate revenue.</P>

<P>Pursuant to FAS 131 we have aggregated two or more operating segments into three reportable segments to ease
in the presentation and understanding of our business.  We used the following criteria to aggregate our segments:<br>
<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD width="20"></TD>
<TD width="22">*</TD>
<TD width="589">The nature of our products and services;</TD></TR>
<TR VALIGN="TOP"><TD width="20"></TD>
<TD width="22">*</TD>
<TD width="589">The nature of the production processes;</TD></TR>
<TR VALIGN="TOP"><TD width="20"></TD>
<TD width="22">*</TD>
<TD width="589">The type or class of customer for our products and services;</TD></TR>
<TR VALIGN="TOP"><TD width="20"></TD>
<TD width="22">*</TD>
<TD width="589">The methods used to distribute our products or provide our services; and</TD></TR>
<TR VALIGN="TOP"><TD width="20"></TD>
<TD width="22">*</TD>
<TD width="589">The nature of the regulatory environment.</TD></TR></TABLE>
<P>Our reportable segments are defined as follows:</P>

<P>The Industrial Waste Management Services segment provides on-and-off site treatment, storage, processing and
disposal of hazardous and nonhazardous industrial waste, commercial waste and wastewater through our six TSD
facilities; Perma-Fix Treatment Services, Inc., Perma-Fix of Dayton, Inc., Perma-Fix of Ft. Lauderdale, Inc.,
Perma-Fix of Orlando, Inc., Perma-Fix of South Georgia, Inc., and  Perma-Fix of Michigan, Inc.  We provide
through Perma-Fix Government Services various waste management services to certain governmental agencies.</P>

<P>The Nuclear Waste Management Services segment provides treatment, storage, processing and disposal services,
including research, development, on and off-site waste remediation of nuclear mixed and low-level radioactive
waste through our three TSD facilities; Perma-Fix of Florida, Inc.,  Diversified Scientific Services, Inc., and East
Tennessee Materials and Energy Corporation.</P>

<P>The Consulting Engineering Services segment provides environmental engineering and regulatory compliance
services through Schreiber, Yonley &amp; Associates, Inc. which includes oversight management of environmental
restoration projects, air and soil sampling and compliance and training activities, as well as, engineering support
as needed by our other segments.</P>

<P><FONT FACE="Times New Roman">The table below presents certain financial information by business segment for the three and six months ended June
30, 2002 and 2001.<STRONG></STRONG></FONT></P>

<TABLE WIDTH="661">
<TR VALIGN="BOTTOM"><TD COLSPAN="14" ALIGN="CENTER" width="636">
    <p align="left"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman"><STRONG>Segment Reporting for the Quarter Ended June 30, 2002</STRONG></FONT><FONT FACE="Times New Roman" SIZE="-1"><STRONG></STRONG></FONT></p>
  </TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><FONT FACE="Times New Roman" size="2">Industrial<br>
  Waste
Services</FONT>

  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45"><FONT FACE="Times New Roman" size="2">Nuclear<br>
  Waste<br>
  Services</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64"><FONT FACE="Times New Roman" size="2">Engineering</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><font size="2">
<BR WP="BR1"><BR WP="BR2">Segments<br>
  <FONT FACE="Times New Roman">  Total</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74"><font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman">Corporate</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman" SIZE="-2">Consolidated
Total</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="7"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Revenue from external</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,721</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">$	11,843</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;921</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">$	22,485</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;	--</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$	22,485</FONT></TD>
<TD ALIGN="RIGHT" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Intercompany revenues</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">2,318</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">1,504</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">33</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">3,855</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">3,855</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest income</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">166</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">555</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">1</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">722</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">722</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense-financing<br>
    &nbsp;&nbsp;&nbsp;fees</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2"><br>
  2</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  2</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  258</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  260</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Depreciation and<br>
    &nbsp;&nbsp;&nbsp;amortization</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  491</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2"><br>
  528</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2"><br>
  9</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  1,028</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">21</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  1,049</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Segment profit (loss) </FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">(601</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" size="2">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">3,261</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">105</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">2,765</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">2,765</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Segment assets<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">40,822</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">53,534</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">2,233</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">96,589</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">4,175</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">100,764</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Expenditures for segment<br>
    &nbsp;&nbsp;&nbsp;assets</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  644</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2"><br>
  696</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2"><br>
  4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  1,344</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  1,344</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="580" colspan="14" align="center">&nbsp;
    <p>-13-</p>
    <p>&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM"><TD width="145"></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD COLSPAN="14" width="636"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><b><font face="Times New Roman" size="3">Segment Reporting for the Quarter Ended June 30, 2001</font></b></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><FONT FACE="Times New Roman" size="2">Industrial<br>
  Waste
Services</FONT>

  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45"><FONT FACE="Times New Roman" size="2">Nuclear<br>
  Waste<br>
  Services</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64"><FONT FACE="Times New Roman" size="2">Engineering</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><font size="2">
<BR WP="BR1"><BR WP="BR2">Segments<br>
  </font><FONT FACE="Times New Roman" size="2">  Total</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74"><font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman">Corporate</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman" SIZE="-2">Consolidated
Total</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="7"></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Revenue from external</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">$	10,040</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">  $	6,968</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">  $	832</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">  $	17,840</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$	--</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$	17,840</FONT></TD>
<TD width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Intercompany revenues</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">1,094</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2"> 883</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">48</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">2,025</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2"> --</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">2,025</FONT></TD>
<TD width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest income</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">6</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">6</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">2</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">8</FONT></TD>
<TD width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">248</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">491</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">10</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">749</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">70</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">819</FONT></TD>
<TD width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense-Warrants</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">-- </FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">(7)</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">(7</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" size="2">)</FONT></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense-financing<br>
    &nbsp;&nbsp;&nbsp;&nbsp;fees</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">-- </FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">451</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">451</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">114</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">565</FONT></TD>
<TD width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Depreciation and<br>
    &nbsp;&nbsp;&nbsp;&nbsp;amortization</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">653</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">  319</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">23</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">995</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">20</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">1,015</FONT></TD>
<TD width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"></FONT><FONT FACE="Times New Roman" SIZE="-1">Segment profit (loss) </FONT></TD>
<TD VALIGN="TOP" width="14"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="58"></FONT><FONT FACE="Times New Roman" SIZE="-1">(216</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" SIZE="-1">(592</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" SIZE="-1">62</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="58"></FONT><FONT FACE="Times New Roman" SIZE="-1">(746)</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="74"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="MIDDLE" width="25"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="74"></FONT><FONT FACE="Times New Roman" SIZE="-1">(746</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" SIZE="-1">Segment assets<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="TOP" width="14"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="58"></FONT><FONT FACE="Times New Roman" SIZE="-1">41,660</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="45"></FONT><FONT FACE="Times New Roman" SIZE="-1">45,742</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="64"></FONT><FONT FACE="Times New Roman" SIZE="-1">2,419</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="58"></FONT><FONT FACE="Times New Roman" SIZE="-1">89,821</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="74"></FONT><FONT FACE="Times New Roman" SIZE="-1">5,323</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="74"></FONT><FONT FACE="Times New Roman" SIZE="-1">95,144</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" SIZE="-1">Expenditures for segment<br>
    &nbsp;&nbsp;&nbsp;&nbsp;assets</FONT></TD>
<TD VALIGN="TOP" width="14"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="58"></FONT><FONT FACE="Times New Roman" SIZE="-1"> 398</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="45"></FONT><FONT FACE="Times New Roman" SIZE="-1">252</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="64"></FONT><FONT FACE="Times New Roman" SIZE="-1">5</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="58"></FONT><FONT FACE="Times New Roman" SIZE="-1">655</FONT></TD>
<TD ALIGN="RIGHT" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="74"></FONT><FONT FACE="Times New Roman" SIZE="-1"> 1</FONT></TD>
<TD ALIGN="RIGHT" width="25"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="74"></FONT><FONT FACE="Times New Roman" SIZE="-1">656</FONT></TD>
<TD width="7"><FONT FACE="Times New Roman" SIZE="-1"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD COLSPAN="14" width="636"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><font face="Times New Roman" size="3"><b>Segment Reporting for the Six Months Ended June 30, 2002</b></font></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><FONT FACE="Times New Roman" size="2">Industrial<br>
  Waste
Services</FONT>

  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45"><FONT FACE="Times New Roman" size="2">Nuclear<br>
  Waste<br>
  Services</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64"><FONT FACE="Times New Roman" size="2">Engineering</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><font size="2">
<BR WP="BR1"><BR WP="BR2">Segments<br>
  </font><FONT FACE="Times New Roman" size="2">  Total</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74"><font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman">Corporate</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman" SIZE="-2">Consolidated
Total</FONT></font></TD>
<TD ALIGN="RIGHT" width="7"></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Revenue from external</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">$	18,059</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">$	19,037</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">$	1,840</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">$	38,936</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$	--</FONT></TD>
<TD width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$	38,936</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Intercompany revenues</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">3,563</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">2,907</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">44</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">6,514</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">6,514</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest income</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">8</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">8</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">1</FONT></TD>
<TD width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">9</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">332</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">1,095</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">1,431</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">(4</FONT></TD>
<TD width="25"><FONT FACE="Times New Roman" size="2">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">1,427</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense-financing<br>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;fees</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2"><br>
  4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  513</FONT></TD>
<TD width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  517</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Depreciation and<br>
    &nbsp;&nbsp;&nbsp;&nbsp;amortization</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  977</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2"><br>
  1,037</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2"><br>
  20</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  2,034</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">42</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  2,076</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Segment profit (loss) </FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">(1,918</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" size="2">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">2,426</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">227</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">735</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="CENTER" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">735</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Segment assets<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">40,822</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">53,534</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">2,233</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">96,589</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">4,175</FONT></TD>
<TD width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">100,764</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Expenditures for segment<br>
    &nbsp;&nbsp;&nbsp;&nbsp;assets</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  1,340</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2"><br>
  1,682</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><br>
  <FONT FACE="Times New Roman" size="2">4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2"><br>
  3,026</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">4</FONT></TD>
<TD width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2"><br>
  3,030</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD COLSPAN="14" width="636"><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman" size="3"><b>Segment Reporting for the Six Months Ended June 30, 2001</b></FONT></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><FONT FACE="Times New Roman" size="2">Industrial<br>
  Waste
Services</FONT>

  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45"><FONT FACE="Times New Roman" size="2">Nuclear<br>
  Waste<br>
  Services</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64"><FONT FACE="Times New Roman" size="2">Engineering</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58"><font size="2">
<BR WP="BR1"><BR WP="BR2">Segments<br>
  </font><FONT FACE="Times New Roman" size="2">  Total</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74"><font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman">Corporate</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<font size="2">
<BR WP="BR1"><BR WP="BR2"><FONT FACE="Times New Roman" SIZE="-2">Consolidated
Total</FONT></font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="7"></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="145"></TD>
<TD ALIGN="CENTER" width="14"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="45">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="64">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="58">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="4"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="25"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="74">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Revenue from external</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">$	20,018</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="45"><FONT FACE="Times New Roman" size="2">$	14,898</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="64"><FONT FACE="Times New Roman" size="2">$	1,636</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="58"><FONT FACE="Times New Roman" size="2">$	36,552</FONT></TD>
<TD ALIGN="RIGHT" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$	--</FONT></TD>
<TD ALIGN="RIGHT" width="25"></TD>
<TD ALIGN="RIGHT" width="74"><FONT FACE="Times New Roman" size="2">$	36,552</FONT></TD>
<TD ALIGN="RIGHT" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Intercompany revenues</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">2,071</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">2,425</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">85</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">4,581</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">4,581</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest income</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">12</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">12</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">4</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">16</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">514</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">820</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">24</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">1,358</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">177</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">1,535</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" size="2">Interest expense-Warrants</FONT></TD>
<TD VALIGN="TOP" width="14"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" size="2">--</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">234</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" size="2">234</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman" SIZE="-1">Interest expense-financing<br>
    &nbsp;&nbsp;&nbsp;&nbsp;fees</FONT></TD>
<TD VALIGN="TOP" width="14"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" SIZE="-1"><br>
  6</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" SIZE="-1"><br>
  601</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" SIZE="-1"><br>
  --</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" SIZE="-1"><br>
  607</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" SIZE="-1"><br>
  216</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" SIZE="-1"><br>
  823</FONT><FONT FACE="Times New Roman"></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"><FONT FACE="Times New Roman"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman" SIZE="-1">Depreciation and<br>
    &nbsp;&nbsp;&nbsp;&nbsp;amortization</FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT></TD>
<TD VALIGN="TOP" width="14"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" SIZE="-1"><br>
  1,333</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT FACE="Times New Roman" SIZE="-1"><br>
  614</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT FACE="Times New Roman" SIZE="-1"><br>
  45</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT FACE="Times New Roman" SIZE="-1"><br>
  1,992</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT FACE="Times New Roman" SIZE="-1"><br>
  40</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT" width="74"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">2,032</FONT><FONT FACE="Times New Roman"></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"><FONT FACE="Times New Roman"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT FACE="Times New Roman" SIZE="-1">Segment profit (loss) </FONT><FONT SIZE="-1"></FONT></TD>
<TD VALIGN="TOP" width="14"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></FONT><FONT SIZE="-1">(1,213</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT SIZE="-1">35</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"></FONT><FONT SIZE="-1">101</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></FONT><FONT SIZE="-1">(1,077</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"></TD>
<TD ALIGN="RIGHT" width="74"><FONT SIZE="-1">(241</FONT></TD>
<TD ALIGN="RIGHT" width="25"><FONT SIZE="-1">)<SUP> (2)</SUP><SUP></SUP></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT SIZE="-1">(1,318</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7">)</TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT SIZE="-1">Segment assets<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="TOP" width="14"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></FONT><FONT SIZE="-1">41,660</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"></FONT><FONT SIZE="-1">45,742</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"></FONT><FONT SIZE="-1">2,419</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"></FONT><FONT SIZE="-1">89,821</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"></FONT><FONT SIZE="-1">5,323</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"></FONT><FONT SIZE="-1">95,144</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR>
<TR VALIGN="BOTTOM"><TD width="145"><FONT SIZE="-1">Expenditures for segment<br>
    &nbsp;&nbsp;&nbsp;&nbsp;assets</FONT></TD>
<TD VALIGN="TOP" width="14"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT SIZE="-1"><br>
  589</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="45"><FONT SIZE="-1"><br>
  422</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="64"><FONT SIZE="-1"><br>
  9</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="58"><FONT SIZE="-1"><br>
  1,020</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="4"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT SIZE="-1"><br>
  1</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="25"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="74"><FONT SIZE="-1"><br>
  1,021</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" width="7"></TD></TR></TABLE>

<P><FONT SIZE="-2"><SUP>(1)</SUP> 	Segment assets have been adjusted for intercompany accounts to reflect actual assets for each segment.<br>
<SUP>(2)  </SUP>	Amount reflects interest expense-Warrants not allocated to the operating segments.</FONT></P>

<P ALIGN="CENTER">&nbsp;</P>

<P ALIGN="CENTER">&nbsp;</P>

<P ALIGN="CENTER">&nbsp;</P>

<P ALIGN="CENTER">-14-</P>

<P ALIGN="left">&nbsp;</P>

<P ALIGN="CENTER"><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF<br>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS<br>
PART I, ITEM 2</STRONG></P>

<BR WP="BR1"><STRONG>Forward-looking Statements</STRONG>

<P>Certain statements contained within this report may be deemed "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended (collectively, the "Private Securities Litigation Reform Act of 1995").
All statements in this report other than a statement of historical fact are forward-looking statements that are
subject to known and unknown risks, uncertainties and other factors which could cause actual results and
performance of the Company to differ materially from such statements.  The words "believe," "expect,"
"anticipate," "intend," "will," and similar expressions identify forward-looking statements.  Forward-looking
statements contained herein relate to, among other things,</P>

<TABLE WIDTH="672">
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">
ability or inability to continue and improve operations and profitability;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">anticipated improvement in the financial performance of the Company;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">ability to comply with the Company's general working capital requirements; </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">ability to be able to continue to borrow under the Company's revolving line of credit;</TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER" width="23">
</TD>
  <TD ALIGN="CENTER" width="48">
*
</TD>
<TD width="581">
ability to generate sufficient cash flow from operations to fund all costs of operations and remediation
of certain formerly leased property in Dayton, Ohio, and the Company's facilities in Memphis,
Tennessee; Valdosta, Georgia and Detroit Michigan;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">ability to remediate certain contaminated sites for projected amounts;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">ability to pay expenses to remediate the four sites from funds generated internally;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">no impairment to intangible assets;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">no intention to close any facilities;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">ability to fund budgeted capital expenditures for 2002; </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">
ability to complete negotiations under the Oak Ridge contracts and complete the negotiations favorably
for the Company; </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">
higher revenue under the Oak Ridge contracts;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">increasing other sources of revenue at M&amp;EC;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">expectation that there will be an increase in revenues and operating profits during
  2002; and</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="581">ability of the Company's mixed waste facilities to continue to
  expand and demonstrate their processing capabilities, increase sales and
  marketing efforts, and to receive greater volumes of waste.</TD></TR></TABLE>

<P>While the Company believes the expectations reflected in such forward-looking statements are reasonable,
it can give no assurance such expectations will prove to have been correct.  There are a variety of factors
which could cause future outcomes to differ materially from those described in this report, including, but not
limited to:
<TABLE WIDTH="652">
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
general economic conditions;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">material reduction in revenues;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
inability to collect in a timely manner a material amount of receivables; </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
increased competitive pressures; </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">the ability to maintain and obtain required permits and approvals to conduct operations; </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
the ability to develop new and existing technologies in the conduct of operations;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
ability to retain or renew certain required permits;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
discovery of additional contamination or expanded contamination at a certain Dayton, Ohio, property
formerly leased by the Company or the Company's facilities at Memphis, Tennessee; Valdosta,
Georgia and Detroit Michigan, which would result in a material increase in remediation expenditures;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
determination that PFM is the source of chlorinated compounds at the Allen Well Field;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
</TD>
<TD width="561">
  </TD></TR>
<TR VALIGN="TOP"><TD width="632" colspan="3" align="center">
&nbsp;
<p>-15-</p>
<p>&nbsp;
</TD>
</TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
</TD>
<TD width="561">
  </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
changes in federal, state and local laws and regulations, especially environmental laws and regulations,
or in interpretation of such;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">potential increases in equipment, maintenance, operating or labor costs;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">management retention and development;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">financial valuation of intangible assets is substantially less than expected;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">the requirement to use internally generated funds for purposes not presently anticipated;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">inability to continue to become profitable on an annualized basis;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">the inability of the Company to maintain the listing of its Common Stock on the NASDAQ;</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">the determination that PFMI or PFO was responsible for a material amount of remediation at certain
Superfund sites; </TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">
terminations of contracts with federal agencies or subcontracts involving federal agencies, or reduction
in amount of waste delivered to the Company under these contracts or subcontracts; and</TD></TR>
<TR VALIGN="TOP"><TD width="23">
</TD>
  <TD width="48" align="center">
*
</TD>
<TD width="561">negative impact resulting from the adoption of accounting standard SFAS 142.</TD></TR>
<TR VALIGN="TOP"><TD width="23"></TD>
  <TD width="48"></TD>
<TD width="561"></TD></TR></TABLE>

<P>The Company undertakes no obligations to update publicly any forward-looking statement, whether as a
result of new information, future events or otherwise.</P>

<P><STRONG>Critical Accounting Policies and Estimates<br>
</STRONG>In preparing the consolidated financial statements in conformity with generally accepted accounting
principles, management makes estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well
as, the reported amounts of revenues and expenses during the reporting period. The Company believes the
following critical accounting policies affect the more significant estimates used in preparation of the
consolidated financial statements:</P>

<P><EM>Intangible Assets</EM>. Intangible assets relating to acquired businesses consist primarily of the cost of purchased
businesses in excess of the estimated fair value of net assets acquired ("goodwill") and the recognized permit
value of the business. The Company continually reevaluates the propriety of the carrying amount of permits
and goodwill to determine whether current events and circumstances warrant adjustments to the carrying
value.  Effective January 1, 2002, the Company adopted SFAS 142 and has completed the first step of its
financial valuation of intangible assets and determined that no impairment existed as of January 1, 2002.
Effective January 1, 2002, the Company discontinued amortizing indefinite life intangible assets (goodwill
and permits) as required by SFAS 142.  Amortization expense for goodwill and permits for the three and six
months ended June 30, 2001, was $292,000 and $584,000, respectively.</P>

<P><EM>Accrued Closure Costs.</EM> The accrued closure costs are estimates based on guidelines developed by federal
and/or state regulatory authorities under RCRA. Such costs are evaluated annually and adjusted for
inflationary factors and for approved changes or expansions to the facilities. Increases due to inflationary
factors for the years ended December 31, 2002, 2001, 2000 and 1999 have been approximately 2.2%, 2.1%,
1.5% and 1.1%, respectively, and based on the historical information, the Company does not expect future
inflationary changes to differ materially from the last four years. Increases or decreases in accrued closure
costs resulting from changes or expansions at the facilities are determined based on specific RCRA guidelines
applied to the requested change.  This calculation includes certain estimates, such as disposal pricing, which
are based on current market conditions. Accrued closure costs represent a contingent environmental liability
to clean up a facility in the event the Company ceases operations in an existing facility. However, the
Company has no intention, at this time, to close any of its facilities.  </P>

<P><EM>Accrued Environmental Liabilities</EM>. The Company has four remediation projects currently in progress. The
current and long-term accrual amounts for the projects are the Company's best estimates determined based
on proposed or approved processes for clean-up. The circumstances that could affect the outcome range from
new technologies, that are being developed every day that reduce the Company's overall costs, to increased
contamination levels that could arise as the Company completes remediation which could increase the
Company's costs, neither of which the Company anticipates at this time. In addition, significant changes in
regulations could adversely or favorably affect the costs to remediate existing sites or potential future sites,</P>

<P>&nbsp;</P>

<P align="center">-16-</P>

<P>&nbsp;</P>

<P>which cannot be reasonably quantified.  For further discussion on the Company's environmental liabilities
see Environmental Contingencies in this section.</P>

<P><EM>Disposal Costs.</EM> The Company accrues for waste disposal based upon a physical count of the total waste at
each facility at the end of each accounting period. Current market prices for transportation and disposal costs
are applied to the end of period waste inventories to calculate the disposal accrual. Costs are calculated using
current costs for disposal, but economic trends could materially affect the actual costs for disposal. As there
are limited disposal sites available to the Company, a change in the number of available sites or an increase
or decrease in demand for the existing disposal areas could significantly affect the actual disposal costs either
positively or negatively.   </P>

<P><EM>Self-Insurance.  </EM>The Company has a  self-insurance program for certain health benefits. The cost of such
benefits is recognized as expense in the period in which the claim occurred and includes an estimate of claims
incurred but not reported ("IBNR"), with such estimates based upon historical trends. Actual health insurance
claims may differ materially from the estimates, as a result of the nature and extent of the actual IBNR claims
paid.  The Company maintains separate insurance to cover the excess liability over an established specific
single claim amount and also an aggregate annual claim total.</P>

<P><STRONG>Results of Operations<br>
</STRONG>The table below should be used when reviewing management's discussion and analysis for the three and six
months ended June 30, 2002 and 2001:<FONT SIZE="-1"></FONT></P>

<TABLE WIDTH="100%">
<TR VALIGN="BOTTOM"><TD></TD>
<TD COLSPAN="8">
<P ALIGN="CENTER"><FONT SIZE="-1"></FONT><FONT SIZE="-1">Three Months Ended<br>
June 30,</FONT></P>

  </TD>
<TD><FONT SIZE="-1"></TD>
<TD COLSPAN="7">
<P ALIGN="CENTER"><FONT SIZE="-1">Six Months Ended<br>
June 30,</FONT></P>

  </TD>
<TD><FONT SIZE="-1"></TD></TR>
<TR VALIGN="BOTTOM"><TD></TD>
<TD COLSPAN="8">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD COLSPAN="7">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD></TR>
<TR><TD><FONT SIZE="-1">Consolidated (amounts in thousands)</FONT></TD>
<TD><FONT SIZE="-1">
<P ALIGN="CENTER">     2002</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT">
<P ALIGN="CENTER"></FONT><FONT SIZE="-1">%</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD>
<P ALIGN="CENTER"></FONT><FONT SIZE="-1">     2001</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT">
<P ALIGN="CENTER"></FONT><FONT SIZE="-1">%</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD ALIGN="RIGHT">
<P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">%</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD>
<P ALIGN="CENTER"></FONT><FONT SIZE="-1">    2001</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="CENTER"></FONT><FONT SIZE="-1"> %</FONT></TD>
<TD VALIGN="TOP"><FONT SIZE="-1"></TD></TR>
<TR><TD colspan="18">
    <hr align="right" noshade size="3" color="#000080">
  </TD>
</TR>
<TR VALIGN="BOTTOM"><TD></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">$	22,485</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">100.0</FONT></TD>
<TD VALIGN="TOP"><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">$	17,840</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">100.0</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">$	38,936</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">100.0</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">$	36,552</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">100.0</FONT></TD>
<TD><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1">Cost of Goods Sold</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">13,565</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">60.3</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">12,734</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">71.4</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">25,926</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">66.6</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">26,257</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">71.8</FONT></TD>
<TD><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">       &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross Profit</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">8,920</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">39.7</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">5,106</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">28.6</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">13,010</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">33.4</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">10,295</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">28.2</FONT></TD>
<TD><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1">Selling, General and Administrative </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,042</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">18.0</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">3,435</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">19.2</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">8,120</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">20.9</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">6,905</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">18.9</FONT></TD>
<TD><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1">Depreciation/Amortization</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,049</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">4.7</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">1,015</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">5.7</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">2,076</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">5.3</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">2,032</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">5.6</FONT></TD>
<TD><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">       &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from Operations</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$	3,829</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">17.0</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">$	656</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">3.7</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">$	2,814</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">7.2</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">$	1,358</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">3.7</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1"></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="BOTTOM"><TD></FONT><FONT SIZE="-1">Interest Expense</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(722</FONT></TD>
<TD><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3.2</FONT></TD>
<TD><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(819</FONT></TD>
<TD><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(4.6</FONT></TD>
<TD VALIGN="TOP"><FONT SIZE="-1"></TD>
<TD></FONT><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,427</FONT></TD>
<TD><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3.7</FONT></TD>
<TD><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,535</FONT></TD>
<TD><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(4.2</FONT></TD>
<TD><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Interest Expense-Warrants</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">--</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">--</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">7</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1">--</FONT></TD>
<TD><FONT SIZE="-1"></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT FACE="Times New Roman" SIZE="-1">--</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD ALIGN="RIGHT"></FONT><FONT FACE="Times New Roman" SIZE="-1">(234</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(0.6</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Interest Expense-Financing Fees</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(260</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1.2</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(565</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(3.2</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(517</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1.3</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(823</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(2.3</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">Preferred Stock Dividends</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">(32</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(0.1</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(32</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(0.2</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1"></TD>
<TD VALIGN="BOTTOM"></FONT><FONT FACE="Times New Roman" SIZE="-1">)</FONT><FONT FACE="Times New Roman" SIZE="-1"></FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"></FONT><FONT FACE="Times New Roman" SIZE="-1">(63</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(0.2</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(82</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(0.2</FONT></TD>
<TD VALIGN="BOTTOM"><FONT FACE="Times New Roman" SIZE="-1">)</FONT></TD></TR></TABLE>

<P><STRONG>Summary -- Three and Six Months Ended June 30, 2002 and 2001<br>
</STRONG>The Company provides services through three reportable operating segments. The Industrial Waste
Management Services segment is engaged in on-and off-site treatment, storage, disposal and processing of
a wide variety of by-products and industrial, hazardous and non-hazardous wastes.  This segment competes
for materials and services with numerous regional and national competitors to provide comprehensive and
cost-effective waste management services to a wide variety of customers nationwide. The Company operates
and maintains facilities and businesses in the waste by-product brokerage, on-site treatment and stabilization,
and off-site blending, treatment and disposal industries.  The Nuclear Waste Management Services segment
provides treatment, storage, processing and disposal services of nuclear mixed and low-level radioactive
wastes, including research, development and on-site and off-site waste remediation.  The presence of nuclear
and low-level radioactive constituents within the waste streams processed by this segment create different
and unique operational, processing and permitting/licensing requirements from those</P>

<P>&nbsp;</P>

<P align="center">-17-</P>

<P>&nbsp;</P>

<P>contained within the
Industrial Waste Management Services segment. The Company's Consulting Engineering Services segment
provides a wide variety of environmental related consulting and engineering services to industry and
government.  The Consulting Engineering Services segment provides oversight management of
environmental restoration projects, air and soil sampling, compliance reporting, surface and subsurface water
treatment design for removal of pollutants, and various compliance and training activities.</P>

<P>Consolidated net revenues increased to $22,485,000 for the quarter ended June 30, 2002, as compared to
$17,840,000 for the same quarter in 2001.  This increase of $4,645,000 or 26.0% is principally attributable
to an increase in revenue in the Nuclear Waste Management Services segment of approximately $4,874,000
<FONT FACE="Times New Roman">resulting from the favorable negotiation of certain contract changes, the completion of a large offsite mixed
waste remediation project and from growth in mixed waste revenues, as these facilities continue to expand
and demonstrate their processing capabilities, increase their related sales and marketing efforts and begin to
receive greater volumes of waste under certain contracts, such as the Oak Ridge contracts.  The Company
recognized during the second quarter of 2002 approximately $2.2 million of additional revenue, </FONT><FONT FACE="Times New Roman">for work
completed during the first six months of 2002, </FONT><FONT FACE="Times New Roman">as a result of the favorable resolution of certain contract
changes under the Oak Ridge contracts.  The pricing structure under the Oak Ridge contracts was amended
to allow M&amp;EC to charge additional amounts for certain waste drums received primarily in connection with
drum density and chemical content.  The amended pricing structure applies to all waste received by M&amp;EC
under the Oak Ridge Contracts from January 1,2002, and on all future waste received under the Oak Ridge
contracts.  The Company continues to negotiate certain other surcharges under the Oak Ridge contracts,
which as of this time, the Company has not completed negotiations and is unable to determine the final
negotiated amount, if any.  Additionally, the Consulting Engineering Services segment experienced an
increase of approximately $89,000 which was primarily due to a new project that was awarded by a nationally
known cement company.  Offsetting these increases was a decrease in the Industrial Waste Management
Services segment of approximately $318,000 resulting from the downturn in the economy, the effect of
targeting higher margin business </FONT><FONT FACE="Times New Roman">and the reduced revenues during the initial period of start-up of the
segments new wastewater treatment system, which began full scale processing during June 2002.</FONT><FONT FACE="Times New Roman">
</FONT>Consolidated net revenues increased to $38,936,000 from $36,552,000 for the six-month period ended June
30, 2002.  <FONT FACE="Times New Roman">This increase of $2,384,000 or 6.5% is principally attributable to an increase in the Nuclear Waste
Management Services segment of approximately $4,139,000 resulting from the favorable negotiation of
certain contract changes, the completion of a large offsite mixed waste remediation project and from growth
in mixed waste revenues driven by the </FONT>continued expansion within the new and unique
mixed waste market, as discussed
above.  Additionally, the Consulting Engineering Services segment experienced an increase of approximately
$204,000 which was primarily due to new projects that were awarded by nationally known cement
companies.  Offsetting these increases was a decrease<FONT FACE="Times New Roman"> in the Industrial Waste Management Services segment
of approximately $1,959,000 resulting from the downturn in the economy, the expiration of certain
government contracts and the effect of </FONT><FONT FACE="Times New Roman">the start-up of the new wastewater treatment system, which occurred
over the first five months of 2002.</FONT></P>

<P>Cost of goods sold for the Company increased $831,000 or 6.5% for the quarter ended June 30, 2002, as
compared to the quarter ended June 30, 2001.  This consolidated increase in cost of goods sold reflects an
increase in the Nuclear Waste Management Services segment of $551,000 and an increase in the Consulting
Engineering Services segment of $90,000.  These increases directly correlate to the increase in revenues for
these segments.  Additionally, the high fixed cost nature of the facilities and increased staffing associated
with new projects, as noted above, contributed to the increases.  The Industrial Waste Management Services
segment experienced an increase of $190,000 as it continues to develop its new wastewater treatment
technology, which became fully operational in June 2002. Cost of goods sold decreased $331,000 or 1.3%
for the six-month period ended June 30, 2002, as compared to the six-month period ended June 30, 2001.
This consolidated decrease in cost of goods sold reflects a decrease in the Industrial Waste Management
Services segment of $785,000 which directly corresponds to the decrease in revenues for this segment,
partially offset by additional operating costs associated with the development and installation of its new
wastewater treatment technology.  Offsetting this decrease was an increase in cost of goods sold in the
Nuclear Waste Management Services segment of $303,000 which corresponds to the growth in mixed waste
revenues and an increase in cost of goods sold in the Consulting Engineering Services segment of $151,000
primarily due to increased staffing associated with the new projects, as noted above.  </P>

<P>&nbsp;  </P>

<P align="center">-18-  </P>

<P>&nbsp;  </P>

<P>The resulting gross profit for the quarter ended June 30, 2002, increased $3,814,000 to $8,920,000, which
as a percentage of revenue is 39.7%, reflecting an increase over the corresponding quarter in 2001 percentage
of revenue of 28.6%.  This increase in gross profit percentage was recognized throughout the Nuclear Waste
Management Services segment which experienced an increase from 24.7% in 2001 to 51.2% in 2002.  This
increase in gross profit percentage reflects the progress of the continued start-up of these newly expanded
mixed waste facilities, increased activities under the Oak Ridge contracts and the <FONT FACE="Times New Roman">impact of the </FONT>favorable
negotiation of certain contract changes related to the Oak Ridge contracts.  These contract changes were
related to work orders completed in the first quarter in which base revenue and the full costs associated with
the work completed during that quarter were recorded.  Offsetting this increase in gross profit percentage was
a decrease in the Industrial Waste Management Services segment from 30.3% in 2001 to 26.0% in 2002.
This decrease reflects the impact of the high fixed cost nature of the facilities as revenues have been lower
during the recent economic downturn and the additional operating costs associated with the development of
the new wastewater treatment technology.  Additionally, the Consulting Engineering Services segment
experienced a decrease in gross profit percentage from 39.2% in 2001 to 35.3% in 2002.  This decrease
reflects the impact of additional staffing associated with the new project, as noted above.  The resulting gross
profit for the six months of 2002 increased $2,715,000 to $13,010,000, which as a percentage of revenue is
33.4%, reflecting an increase over the corresponding six months in 2001 percentage of revenue of 28.2%.
This increase in gross profit percentage was principally recognized in the Nuclear Waste Management
Services segment which experienced an increase from 27.9% in 2001 to 42.0% in 2002.  This increase
reflects the impact of certain contract changes and the growth in mixed waste revenues.  Furthermore, the
gross profit percentage for 2001 was negatively affected by the low margin subcontract work performed by
this segment during the completion of the East Tennessee Materials and Energy Corporation ("M&amp;EC")
facility.  Offsetting this increase in gross profit percentage was a decrease in the Industrial Waste
Management Services segment from 27.5% in 2001 to 24.0% in 2002 reflecting the impact of the high fixed
cost nature of the facilities <FONT FACE="Times New Roman">in conjunction with reduced revenues in this segment, </FONT>and the additional operating
costs associated with the development and installation of the new wastewater treatment technology.
Additionally, the Consulting Engineering Services segment experienced a decrease from 38.8% in 2001 to
37.3% in 2002.  This decrease reflects the impact of increased staffing associated with the new projects that
were awarded by nationally known cement companies.  </P>

<P>Selling, general and administrative expenses increased $607,000 or 17.7% for the quarter ended June 30,
2002, as compared to the quarter ended June 30, 2001. This increase reflects principally the impact of the
acquisition of M&amp;EC during June 2001, which resulted in an increase of $474,000.  Additionally, these
expenses increased due to the impact of increasing the sales and marketing efforts within the Nuclear Waste
Management Services segment in anticipation of the growth and as we expand our capabilities in this
segment.  This segment requires increased up front sales efforts due to the complexity of the waste streams
and sophistication of the customer base. As a percentage of revenue, selling, general and administrative
expenses decreased to 18.0% for the quarter ended June 30, 2002, compared to 19.2% for the same period
in 2001.  Selling general and administrative expenses increased $1,215,000 or 17.6% for the six months
ended June 30, 2002, as compared to the same period in 2001.  This increase also reflects the impact of the
acquisition of M&amp;EC during June 2001, which resulted in an increase of $925,000.  Additionally, these
expenses increased due to the impact of increasing the sales and marketing efforts within the Nuclear Waste
Management Services segment in anticipation of the growth of this segment.  As a percentage of revenue,
selling, general and administrative expenses reflected an increase to 20.9% for the six-month period ended
June 30, 2002, compared to 18.9% for the same period of 2001.</P>

<P>Depreciation and amortization expense for the quarter ended June 30, 2002, reflects an increase of $34,000
as compared to the quarter ended June 30, 2001.  This increase is attributable to a depreciation expense
increase of $293,000 resulting from the M&amp;EC facility acquired effective June 25, 2001.  Additionally, an
increase in depreciation expense of $17,000 in the Nuclear Waste Management Services segment was due</P>

<P>&nbsp;</P>

<P align="center">-19-</P>

<P>&nbsp;</P>

<P>to additions of new mixed waste processing equipment.  Depreciation expense also increased in the Industrial
Waste Management Services segment by $16,000 due to additions of new waste processing equipment.
Amortization expense decreased across all segments by approximately $292,000 due to the adoption of SFAS
142, which eliminated the amortization expense on indefinite-life intangible assets.  Depreciation and
amortization expense for the six-month period ended June 30, 2002, reflects an increase of $44,000 as
compared to the same period of 2001.  This increase is attributable to a depreciation expense increase of
$583,000 resulting from the acquisition of M&amp;EC during June 2001.  Additionally, an increase in
depreciation expense of $44,000 in the Nuclear Waste Management Services segment was due to additions
of new mixed waste processing equipment.  Depreciation expense also increased in the Industrial Waste
Management Services segment by $16,000 due to additions of new waste processing equipment.  Offsetting
this increase is a decrease in depreciation expense of $15,000 resulting from older assets being fully
depreciated. Amortization expense for the six months ended June 30, 2002, decreased company-wide by
approximately $584,000 due to the adoption of SFAS 142, which eliminated the amortization expense on
indefinite-life intangible assets.</P>

<P>Interest expense decreased $97,000 for the quarter ended June 30, 2002, as compared to the corresponding
period of 2001.  This decrease reflects the impact of lower interest rates and decreased borrowing levels on
the revolving credit and term loans with PNC Bank, National Association ("PNC"), which resulted in a
decrease in interest expense of $70,000 when compared to prior year.  Additionally, interest expense
decreased by $317,000 due to the elimination of interim financing, related to the mixed waste construction
activities, and by $30,000 as a result of the reduction in debt with other creditors.  These decreases were
offset by an increase in interest expense of approximately $130,000 associated with the acquisition of M&amp;EC
in June 2001and an increase of approximately $190,000 related to the expansion of our mixed waste facilities.
Interest expense also decreased by $108,000 for the six-month period ended June 30, 2002, as compared to
the corresponding period of 2001.  This decrease is also a result of lower interest rates on our PNC revolving
credit and term loan of $167,000, $523,000 due to the elimination of the above noted interim financing
<FONT FACE="Times New Roman">related to the mixed waste construction activities</FONT> and by $55,000 due to the reduction in debt with other
creditors.  These decreases were partially offset by an increase in interest expense of $257,000 associated
with the acquisition of M&amp;EC and an increase of approximately $380,000 related to the expansion of our
mixed waste facilities.</P>

<P>No Warrants were issued for the six months ended June 30, 2002, and therefore no interest expense-Warrants
was recorded during the six months ended June 30, 2002, as compared to $234,000 for the six months ended
June 30, 2001.  This 2001 expense reflects the Black-Scholes  pricing valuation for certain Warrants issued
to Capital Bank pursuant to a promissory note ("$3,000,000 Capital Promissory Note") and an unsecured
promissory note ("$750,000 Capital Promissory Note").  The notes required that certain Warrants be issued
upon the initial execution of the note and at monthly intervals if the debt obligations to Capital Bank have
not been repaid in full. During 2001, these debt obligations were repaid in full by a debt to equity exchange
agreement and through the payment of principal and interest with the use of Warrant proceeds. </P>

<P>Interest expense-financing fees decreased approximately $305,000 to $260,000 for the three months ended
June 30, 2002, as compared to $565,000 for the same period of 2001.  This decrease is due to amortization
of financing fees of $451,000 during the quarter in 2001as related to the short term construction financing
within the mixed waste segment, which was subsequently repaid in July 2001.  This decrease was principally
offset by amortization of financing fees of approximately $148,000 during the quarter ended June 30, 2002,
principally associated with our Senior Subordinated Notes issued to Associated Mezzanine Investors - PESI,
L.P. ("AMI") and Bridge Cost Capital, L.P. ("BEC").  Interest expense-financing fees also decreased by
$306,000 for the six months ended June 30, 2002, as compared to the corresponding period of 2001.  This
decrease is also due to the elimination of the above discussed short-term debt in July 2001, offset by the new
debt with AMI and BEC.</P>

<P>Preferred Stock dividends remained constant at $32,000 during the quarter ended June 30, 2002 and June&nbsp;30,
2001.  Preferred Stock dividends decreased $19,000 during the six months ended June 30, 2002</P>

<P>&nbsp;</P>

<P align="center">-20-</P>

<P>&nbsp;</P>

<P>as compared
to the corresponding period of 2001.  This decrease is due to the conversion of $1,730,000 (1,730 preferred
shares) of the Preferred Stock into Common Stock in April 2001 pursuant to a conversion and exchange
agreement with Capital Bank.</P>

<P><STRONG>Liquidity and Capital Resources of the Company<br>
</STRONG>Our capital requirements consist of general working capital needs, scheduled principal payments on our debt
obligations and capital leases, remediation projects and planned capital expenditures.  Our capital resources
consist primarily of cash generated from operations and funds available under our revolving credit facility
and proceeds from issuance of our common stock.  Our capital resources are impacted by changes in accounts
receivable as a result of revenue fluctuation, economic trends, and collection activities.</P>

<P>At June 30, 2002, the Company had cash of $90,000.  This cash total reflects a decrease of $770,000 from
December 31, 2001, as a result of net cash provided by operations of $3,747,000 offset by cash used in
investing activities of $2,619,000  (principally net purchases of equipment, totaling $2,616,000) and cash
used in financing activities of $1,898,000 (principally repayments of long-term debt partially offset by
proceeds from the issuance of common stock).  The Company is in a net borrowing position and therefore
attempts to move all excess cash balances immediately to the revolving credit facility, so as to reduce debt
and interest expense.  During 2002 the Company implemented a centralized cash management system which
included new remittance lock boxes and resulted in accelerated collection activities and reduced cash
balances, as idle cash is able to be moved without delay to the revolving credit facility.</P>

<P><EM>Operating Activities<br>
</EM>Accounts receivable, net of allowances for doubtful accounts, totaled $17,861,000, an increase of $670,000
from the December 31, 2001, balance of $17,191,000.  This increase principally reflects the impact of the
higher second quarter 2002 revenues within the Nuclear Waste Management Services segment, which
resulted in an increase of $1,807,000.  Partially offsetting this was a decrease in Industrial Waste
Management Services segment, resulting from increased collection efforts and reduced revenue levels during
the second quarter of 2002.</P>

<P>As of June 30, 2002, total consolidated accounts payable was $10,017,000, an increase of $2,850,000 from
the December 31, 2001, balance of $7,167,000.  This increase in accounts payable reflects the impact of
increased revenues and operating activities during the second quarter, and the timing of payments, as
reflected by the decrease in the revolving credit facility loan balance.  As noted above, cash was used to pay
down the revolving credit facility and as of the end of the second quarter of 2002 had not yet been utilized
to reduce accounts payable. This increase is also reflective of unfinanced capital expenditures during the
quarter, additional operating costs associated with the upgraded wastewater treatment systems and the impact
of increased insurance premium payments for the 2002 policy year, which was recorded as accounts payable
rather than being financed and paid evenly over the full year.</P>

<P>The working capital deficit position at June 30, 2002, was $468,000, as compared to a working capital
position of $831,000 at December 31, 2001, which reflects a decrease of $1,299,000 during the first six
months of 2002.  This decrease in the working capital position was primarily due to the increased accounts
payable, as discussed above, and the related reduction in the revolving credit facility loan balance at the end
of the second  quarter, which is a long term liability.  The working capital deficit position did however
improve by $1,109,000 from the end of the first quarter of 2002.</P>

<P><EM>Investing Activities<br>
</EM>Our purchases of capital equipment for the six-month period ended June 30, 2002, totaled approximately
$3,030,000, including financed purchases of $414,000. These expenditures were for expansion and
improvements to the operations principally within the waste management segments.  These capital
expenditures were funded by the cash provided by operations and from proceeds from the issuance of stock.
We had initially budgeted capital expenditures of up to approximately $11,000,000 for 2002, which</P>

<P>&nbsp;</P>

<P align="center">-21-</P>

<P>&nbsp;</P>

<P>includes
completion of certain current  projects, as well as other identified capital purchases for the expansion and
improvement to the facilities and for certain compliance related enhancements.  However, based upon the
current status of the planning and evaluation of the proposed projects, we believe that we will be spending
only up to approximately $6,000,000 for capital expenditures for 2002.  We anticipate funding these capital
expenditures by a combination of lease financing, internally generated funds, and/or the proceeds received
from the exercise of outstanding options and warrants.</P>

<P><EM>Financing Activities<br>
</EM>On December 22, 2000, the Company entered into a Revolving Credit, Term Loan and Security Agreement
("Agreement") with PNC acting as agent ("Agent") for lenders, and as issuing bank.  The Agreement provides
for a term loan ("Term Loan") in the amount of $7,000,000, which requires principal repayments based upon
a seven-year amortization, payable over five years, with monthly installments of $83,000 and the remaining
unpaid principal balance due on December 22, 2005.  Payments commenced on February 1, 2001.  The
Agreement also provided for a revolving line of credit ("Revolving Credit") with a maximum principal
amount outstanding at any one time of $15,000,000.  The Revolving Credit  advances are subject to
limitations of an amount up to the sum of a) up to 85% of Commercial Receivables aged 90 days or less from
invoice date, b) up to 85% of Commercial Broker Receivables aged up to 120 days from invoice date, c) up
to 85% of acceptable Government Agency Receivables aged up to 150 days from invoice date, and d) up to
50% of acceptable unbilled amounts aged up to 60 days, less e) reserves Agent reasonably deems proper and
necessary.  The Revolving Credit advances shall be due and payable in full on December 22, 2005.  As of
June 30, 2002, our excess availability under our revolving credit facility was $5,066,000 based on our eligible
receivables.</P>

<P>Pursuant to the Agreement, the Term Loan bears interest at a floating rate equal to the prime rate plus
1&nbsp;1/2%,
and the Revolving Credit at a floating rate equal to the prime rate plus 1%.  The loans are subject to a
prepayment fee of 1/2% in the first year, 1% in the second and third years and
3/4% after the third anniversary
until termination date. </P>

<P>In December 2000, the Company entered into an interest rate swap agreement related to its Term Loan. This
hedge, has effectively fixed the interest rate on the notional amount of $3,500,000 of the floating rate
$7,000,000 PNC Term Loan.  The Company will pay the counterparty interest at a fixed rate equal to the base
rate of 6.25%, for a period from December 22, 2000, through December 22, 2005, in exchange for the
counterparty paying the Company one month LIBOR rate for the same term (1.84%  at June 30, 2002).  The
value of the interest rate swap at January 1, 2001, was deminimus.  At June 30, 2002, the market value of the
interest rate swap was in an unfavorable value position of $167,000 and was recorded as a liability.  During
the three months ended June 30, 2002, the Company recorded a loss on the interest rate swap of $9,000 which
offset other comprehensive income on the Statement of Stockholders' Equity.</P>

<P>Effective as of June 2002, the Company and PNC entered into Amendment No. 1 to the Agreement, which,
among other things, increased the letter of credit commitment from $500,000 to $4,500,000 and provided for
a $4.0 million standby letter of credit.  The standby Letter of Credit was issued to secure certain surety bond
obligations.  Pursuant to the terms of Amendment No. 1, as partial collateral for the issuance of the standby
letter of credit, a reserve of approximately $66,000 will be recorded each month against the availability under
the Revolving Credit beginning July 15, 2002, until such time as the standby letter of credit is fully reserved.
At a condition precedent to this Amendment No. 1, the Company paid a $50,000 amendment fee to PNC.</P>

<P>Pursuant to the terms of the Stock Purchase Agreements in connection with the acquisition of Perma-Fix of
Orlando, Inc. ("PFO"), Perma-Fix of South Georgia, Inc. ("PFSG") and Perma-Fix of Michigan, Inc.
("PFMI"), a portion of the consideration was paid in the form of Promissory Notes, in the aggregate amount
of $4,700,000, payable to the former owners of PFO, PFSG and PFMI.  The Promissory Notes are paid in
equal monthly installments of principal and interest of approximately $90,000 over five years with the first
installment due on July 1, 1999, and having an interest rate of 5.5% for the first three years and 7% for the</P>

<P>&nbsp;</P>

<P align="center">-22-</P>

<P>&nbsp;</P>

<P>remaining two years. The aggregate outstanding balance of the Promissory Notes total $2,016,000 at June&nbsp;30, 2002, of which $973,000 is in the current portion.  Payments of such Promissory Notes are guaranteed
by PFMI under a non-recourse guaranty, which non-recourse guaranty is secured by certain real estate owned
by PFMI.  These Promissory Notes are subject to subordination agreements with the Company's senior and
subordinated lenders.</P>

<P>On August 31, 2000, as part of the consideration for the purchase of DSSI, the Company issued to Waste
Management Holdings a long term unsecured promissory note (the "Unsecured Promissory Note") in the
aggregate principal amount of $3,500,000, bearing interest at a rate of 7% per annum and having a five-year
term with interest to be paid annually and principal due at the end of the term of the Unsecured Promissory
Note.</P>

<P>On July 31, 2001, the Company issued approximately $5.6 million of its 13.50% Senior Subordinated Notes
due July 31, 2006 (the "Notes").  The Notes were issued pursuant to the terms of a Note and Warrant
Purchase Agreement, dated July 31, 2001 (the "Purchase Agreement"), between the Company, Associated
Mezzanine Investors-PESI, L.P. ("AMI"), and Bridge East Capital, L.P. ("BEC").  The Notes are unsecured
and are unconditionally guaranteed by the subsidiaries of the Company.  The Company's payment obligations
under the Notes are subordinate to the Company's payment obligations to its primary lender and to certain
other debts of the Company up to an aggregate amount of $25 million.  The net proceeds from the sale of the
Notes were used to repay the Company's short term loan.</P>

<P>Under the terms of the Purchase Agreement, the Company also issued to AMI and BEC Warrants to purchase
up to 1,281,731 shares of the Company's Common Stock ("Warrant Shares") at an initial exercise price of
$1.50 per share (the "Warrants"), subject to adjustment under certain conditions. The warrants, as issued, also
contain a cashless exercise provision.  The holders of at least 25% of the Warrants or the Warrant Shares
may, at any time and from time to time during the term of the Warrants, request on two
occasions registration
with the Securities and Exchange Commission ("SEC") of the Warrant Shares.  In addition, the holders of
the Warrants are entitled, subject to certain conditions, to include the Warrant Shares in a registration
statement covering other securities which the Company proposes to register.  On
August 5, 2002, the
Company filed an amended S-3 Registration Statement with the SEC covering the Warrants.  This Registration Statement has not been declared effective as of the date of
this Form 10-Q.  </P>

<P>In connection with the sale of the Notes, the Company, AMI, and BEC entered into an Option Agreement,
dated July 31, 2001 (the "Option Agreement").  Pursuant to the Option Agreement, the Company granted
each Purchaser an irrevocable option requiring the Company to purchase any of the Warrants or the shares
of Common Stock issuable under the Warrants (the "Warrant Shares") then held by the Purchaser (the "Put
Option").  The Put Option may be exercised at any time commencing July 31, 2004, and ending July 31,
2008.  In addition, each Purchaser granted to the Company an irrevocable option to purchase all the Warrants
or the Warrant Shares then held by the Purchaser (the "Call Option").  The Call Option may be exercised at
any time commencing July 31, 2005, and ending July 31, 2008.  The purchase price under the Put Option and
the Call Option is based on the quotient obtained by dividing (a) the sum of six times the Company's
consolidated EBITDA for the period of the 12 most recent consecutive months minus Net Debt plus the
Warrant Proceeds by (b) the Company's Diluted Shares (as the terms EBITDA, Net Debt, Warrant Proceeds,
and Diluted Shares are defined in the Option Agreement).  Pursuant to the guidance under EITF 00-19 on
accounting for and financial presentation of securities that could potentially be settled in a Company's own
stock, the put warrants would be classified outside of equity based on the ability of the holder to require cash
settlement. Also, EITF Topic D-98 discusses the accounting for a security that will become redeemable at
a future determinable date and its redemption is variable. This is the case with the Warrants as the date is
fixed, but the put or call price varies. The EITF gives two possible methodologies for valuing the securities.
The Company has selected to account for the changes in redemption value immediately as they occur and
the Company will adjust the carrying value of the security to equal the redemption value at the end of each
reporting period.  On June 30, 2002, the Put Option had no value and no liability was recorded.</P>

<P>&nbsp;</P>

<P align="center">-23-</P>

<P>&nbsp;</P>

<P>In conjunction with the Company's acquisition of M&amp;EC, M&amp;EC entered into an installment agreement with
the Internal Revenue Service ("IRS") for a principal amount of $923,000 dated June 7, 2001, for certain
withholding taxes owed by M&amp;EC.  The installment agreement is payable over eight years on a semiannual
basis on June 30 and December 31.  Interest is accrued at the applicable law rate ("Applicable Rate") pursuant
to the provisions of section 6621 of the Internal Revenue Code of 1986 as amended.  Such rate is adjusted
on a quarterly basis and payable in lump sum at the end of the installment period. On June 30, 2002, the rate
was 8%.  On June 30, 2002, the outstanding balance was $979,000 including accrued interest of
approximately $81,000.</P>

<P>M&amp;EC also issued a promissory note for a principal amount of $3.7 million to PDC, dated June 7, 2001, for
monies advanced to M&amp;EC for certain services performed by PDC. The promissory note is payable over
eight years on a semiannual basis on June 30 and December 31. Interest is accrued at the applicable rate
(8.00% on June 30, 2002) and payable in one lump sum at the end of the loan period.  On June 30, 2002, the
outstanding balance was $3,962,000 including accrued interest of approximately $348,000.  PDC has directed
M&amp;EC to make all payments under the promissory note directly to the IRS to be applied to PDC's obligations
under its installment agreement with the IRS.</P>

<P>The following table summarizes the Company's contractual obligations at June 30, 2002, and the effect such
obligations are expected to have on its liquidity and cash flow in future periods, (in thousands):</P>

<TABLE WIDTH="100%">
<TR><TD></TD>
<TD></TD>
<TD ALIGN="CENTER" VALIGN="TOP"></TD>
<TD ALIGN="CENTER" VALIGN="TOP"></TD>
<TD COLSPAN="7" ALIGN="CENTER">
  <p align="center">Payments due by period</p>
  </TD></TR>
<TR><TD></TD>
<TD></TD>
<TD ALIGN="CENTER" VALIGN="TOP"></TD>
<TD ALIGN="CENTER" VALIGN="TOP"></TD>
<TD COLSPAN="7" ALIGN="CENTER">
  <hr align="right" noshade size="3" color="#000080">
  </TD></TR>
<TR><TD><br>
    Contractual Obligations</TD>
<TD></TD>
<TD>
  <p align="center"><br>
  Total</p>
  </TD>
<TD></TD>
<TD>
<P ALIGN="center"><br>
2002</TD>
<TD></TD>
<TD>
<P ALIGN="center">2003-<br>
2005</TD>
<TD></TD>
<TD>
<P ALIGN="center">2006-<br>
2007</TD>
<TD></TD>
<TD>
<P ALIGN="RIGHT"><br>
2008 +</TD></TR>
<TR><TD>
    <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD></TD>
<TD ALIGN="CENTER">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER"></TD>
<TD ALIGN="CENTER">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER"></TD>
<TD ALIGN="CENTER">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER"></TD>
<TD ALIGN="CENTER">
<hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER"></TD>
<TD ALIGN="CENTER">
<hr align="right" noshade size="3" color="#000080">
  </TD></TR>
<TR><TD>Long-term debt</TD>
<TD></TD>
<TD ALIGN="RIGHT">$&nbsp;29,405</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$	1,525</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$&nbsp;20,563</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$	6,377</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$	940</TD></TR>
<TR><TD>Operating leases</TD>
<TD></TD>
<TD ALIGN="RIGHT">     5,346</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">     1,007</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">   3,667</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">       672</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">   -- </TD></TR>
<TR><TD></TD>
<TD></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
 </TD></TR>
<TR><TD COLSPAN="2">	Total contractual obligations</TD>
<TD ALIGN="RIGHT">$	34,751</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$	2,532</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$	24,230</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$	7,049</TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">$	940</TD></TR>
<TR><TD COLSPAN="2">	</TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD></TR></TABLE>
<P>The accrued dividends on the outstanding Preferred Stock for the period July 1, 2001, through December&nbsp;31,
2001, in the amount of approximately $63,000 were paid in March 2002, in the form of 24,217 shares of
Common Stock of the Company.  The dividends for the period January 1, 2002, through June 30, 2002, total
$63,000, which will be paid in August 2002, in the form of Common Stock, or if approved by the lender, at
the Company's option, in the form of cash.  Under the Company's loan agreements, the Company is
prohibited from paying cash dividends on its outstanding capital stock.</P>

<P>In summary, we have continued to take steps to improve our operations and liquidity as discussed above.
However, with the acquisition of M&amp;EC in 2001, the completion of the M&amp;EC project and the ramp-up of
the mixed waste segment, we incurred and assumed certain debt obligations and long-term liabilities, which
had a short-term impact on liquidity.  Additionally, with the reduced revenue levels and start-up of the new
wastewater treatment technology within the Industrial Waste Management Services segment during the first
six months of 2002, combined with certain surcharges currently being negotiated under the Oak Ridge
contracts, our liquidity remains tight as of June 30, 2002.  However, as these projects have come to
completion and the mixed waste segment continued to expand, our liquidity position demonstrated
improvement during the second quarter.  If we are unable to continue to improve our operations, successfully
expand our mixed waste activities, and to continue profitability in the foreseeable future, such would have
a material adverse effect on our liquidity position.</P>

<P><STRONG>Known Trends and Uncertainties<br>
</STRONG><EM>Seasonality</EM>. Historically the Company has experienced reduced revenues, operating losses or decreased
operating profits during the first and fourth quarters of the Company's fiscal years due to a seasonal</P>

<P>&nbsp;</P>

<P align="center">-24-</P>

<P>&nbsp;</P>

<P>slowdown in operations from poor weather conditions and overall reduced activities during the holiday
season. During the Company's second and third fiscal quarters there has historically been an increase in
revenues and operating profits. Management expects this trend to continue in future years as this was evident
in the first and second quarter of 2002.</P>

<P><EM>Economic conditions.  </EM>Economic downturns or recessionary conditions can adversely affect the demand for
the Company's services, principally within the Industrial Waste Management Services segment.  Reductions
in industrial production generally follow such economic conditions, resulting in reduced levels of waste being
generated and/or sent off for treatment.  The Company believes that its revenues and profits were negatively
affected within this segment by the recessionary conditions in 2001, and that this trend has continued into
2002.<EM></EM></P>

<P><EM>Significant contracts</EM>. The Company's revenues are principally derived from numerous varied customers.
However, Perma-Fix Government Services ("PFGS") manages six contracts with the Defense Reutilization
&amp; Marketing Service, a sub-agency of the Department of Defense which accounted for 9.3% of total
consolidated revenues during the six months ended June 30, 2002, and M&amp;EC operates under three broad
spectrum contracts ("Oak Ridge contracts") which contributed 9.4% of total consolidated revenues during
the six months ended June 30, 2002.  As the newly constructed M&amp;EC facility continues to enhance its
processing capabilities, completes certain expansion projects and with the amended pricing structure under
the Oak Ridge contracts, the Company could see significantly higher total revenue under the Oak Ridge
contracts. There is no guarantee under the Oak Ridge contracts, as they can be terminated by either party at
any time.  Termination of these contracts could have a material adverse effect on the Company.  The
Company is working towards increasing other sources of revenues at M&amp;EC to reduce the risk of reliance
on one major source of revenues.</P>

<P><EM>Insurance</EM>. The Company maintains insurance coverage similar to, or greater than, the coverage maintained
by other companies of the same size and industry, which complies with the requirements under applicable
environmental laws. The Company evaluates its insurance policies annually to determine adequacy, cost
effectiveness and desired deductible levels. Due to downturns in the economy and changes within the
environmental insurance market, the Company has no guarantee that it will be able to obtain similar insurance
in future years, or that the cost of such insurance will not increase materially.</P>

<P><STRONG>Environmental Contingencies<br>
</STRONG>The Company is engaged in the waste management services segment of the pollution control industry.  As
a participant in the on-site treatment, storage and disposal market and the off-site treatment and services
market, the Company is subject to rigorous federal, state and local regulations.  These regulations mandate
strict compliance and therefore are a cost and concern to the Company.  Because of their integral role in
providing quality environmental services, the Company makes every reasonable attempt to maintain complete
compliance with these regulations.  However, even with a diligent commitment, the Company, as with many
of its competitors, may be required to pay fines for violations or investigate and potentially remediate its
waste management facilities.</P>

<P>We routinely use third party disposal companies, who ultimately destroy or secure landfill residual materials
generated at our facilities or at a client's site. We, compared to certain of our competitors, dispose of
significantly less hazardous or industrial by-products from our operations due to rendering material
nonhazardous, discharging treated wastewaters to publicly-owned treatment works and/or processing wastes
into saleable products.  In the past, numerous third party disposal sites have improperly managed wastes that
subsequently required remedial action; consequently, any party utilizing these sites may be liable for some
or all of the remedial costs.  Despite our aggressive compliance and auditing procedures for disposal of
wastes, we could, in the future, be notified that we are a PRP at a remedial action site, which could have a
material adverse effect on the Company.</P>

<P>&nbsp;</P>

<P align="center">-25-</P>

<P>&nbsp;</P>

<P>In addition to budgeted capital expenditures for 2002 at our treatment, storage and disposal ("TSD") facilities,
which are necessary to maintain permit compliance, improve operations and expand our business into new
markets, as discussed above under &quot;Liquidity and Capital Resources of the Company" of this Management's
Discussion and Analysis, we have also budgeted for 2002 an additional $1,202,000 in environmental
expenditures to comply with federal, state and local regulations in connection with remediation of certain
contaminates at four locations.  The four locations where these expenditures will be made are the Leased
Property in Dayton, Ohio (EPS), a former RCRA storage facility as operated by the former owners of PFD,
PFM's facility in Memphis, Tennessee, PFSG's facility in Valdosta, Georgia and PFMI's facility in Detroit,
Michigan.  We have estimated the expenditures for 2002 to be approximately $287,000 at the EPS site,
$300,000 at the PFM location, $108,000 at the PFSG site and $507,000 at the PFMI site of which $27,000;
$29,000; $10,000; and $446,000, respectively, were spent during the first six months of 2002.  Additional
funds will be required for the next two to seven years to properly remediate these sites.  We expect to fund
these expenses to remediate these four sites from funds generated internally, however, no assurances can be
made that we will be able to do so.</P>

<P>At June 30, 2002, the Company had accrued environmental liabilities totaling $3,023,000, which reflects a
decrease of $511,000 from the December 31, 2001, balance of $3,534,000. The decrease represents payments
on remediation projects.  The June 30, 2002, current and long-term accrued environmental balance is
recorded as follows: </P>

<TABLE WIDTH="100%">
<TR VALIGN="TOP"><TD>&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">PFD</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">PFM</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">PFSG</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">PFMI</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">Total</TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
  <hr align="right" noshade size="3" color="#000080">
  </TD></TR>
<TR><TD>Current accrual</TD>
<TD ALIGN="RIGHT">$	269,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	301,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	98,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	114,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	782,000</TD></TR>
<TR><TD>Long-term accrual </TD>
<TD ALIGN="RIGHT">245,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">644,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">1,292,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">60,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">2,241,000</TD></TR>
<TR><TD> </TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="3" color="#000080">
  </TD></TR>
<TR><TD>	Total </TD>
<TD ALIGN="RIGHT">$	514,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	945,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	1,390,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	174,000</TD>
<TD ALIGN="RIGHT">&nbsp;</TD>
<TD ALIGN="RIGHT">$	3,023,000</TD></TR>
<TR><TD>	</TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT">
  <hr align="right" noshade size="5" color="#000080">
  </TD></TR></TABLE>

<P><STRONG>Interest Rate Swap<br>
</STRONG>The Company entered into an interest rate swap agreement effective December 22, 2000, to modify the
interest characteristics of its outstanding debt from a floating basis to a fixed rate, thus reducing the impact
of interest rate changes on future income. This agreement involves the receipt of floating rate amounts in
exchange for fixed rate interest payments over the life of the agreement without an exchange of the
underlying principal amount. The differential to be paid or received is accrued as interest rates change and
recognized as an adjustment to interest expense related to the debt. The related amount payable to or
receivable from counter parties is included in other assets or liabilities. The value of the interest rate swap
at January 1, 2001, was deminimus. At June 30, 2002, the market value of the interest rate swap was in an
unfavorable value position of $167,000 and was recorded as a liability. During the six months ended June
30, 2002, the Company recorded a loss on the interest rate swap of $9,000 which offset other comprehensive
income on the Statement of Stockholders' Equity (see Note 4 to Notes to Consolidated Financial Statements).</P>

<P><STRONG>Recently Adopted Accounting Standards<br>
</STRONG>The Company adopted the Financial Accounting Standards Board FASB Statements No. 141, <EM>Business
Combinations </EM>("SFAS 141"), and No. 142, <EM>Goodwill and Other Intangible Assets </EM>("SFAS 142"), effective
January 1, 2002. SFAS 141 requires the use of the purchase method of accounting and prohibits the use of
the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS
141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired
intangible assets meet certain criteria, SFAS 141 applies to all business combinations initiated after June 30,
2001, and for purchase business combinations completed on or after July 1<EM>, </EM>2001. It also requires, upon
adoption of SFAS 142, that the Company reclassify the carrying amounts of intangible assets and goodwill
based on the criteria in SFAS 141.</P>

<P>SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test
goodwill for impairment at least annually.  In addition, SFAS 142 requires that the Company identify</P>

<P>&nbsp;</P>

<P align="center">-26-</P>

<P>&nbsp;</P>

<P>reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful
lives of other existing recognized intangible assets, and cease amortization of intangible assets with an
indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142.   SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is also required to reassess the
useful lives of other intangible assets within the first interim quarter after adoption of SFAS 142.  The
Company has completed the first step of its evaluation of intangible assets for impairment, and has
determined that no impairment existed as of January 1, 2002.  The Company has discontinued amortizing its
indefinite-life intangible assets (goodwill and permits).  Prior to January 1, 2002, goodwill and permits were
amortized on a straight-line basis over ten to forty years.  Amortization expense for goodwill and permits for
the three and six months ended June 30, 2001, was $292,000 and $584,000, respectively.</P>

<P><FONT FACE="Times New Roman">Pursuant to the Company's adoption of SFAS 141 and 142, the Company changed its method of recording
acquired permits in connection with business combinations.  For all acquisitions prior to July 2001, the
Company allocated the excess purchase price between goodwill and permits, based upon the percentage of</FONT>
<FONT FACE="Times New Roman">revenue generated through permitted activities.  If all revenue/business base of an entity was derived from
and subject to the permit, then the full intangible amount was recorded to permits.  The permits, therefore
were allocated this intangible value, and were generally amortized over a 20 year life.</FONT></P>

<P><FONT FACE="Times New Roman">For permits acquired beginning in July 2001 the Company will determine the actual cost to obtain such a
permit and record it as an intangible permit with an indefinite life.  The Company will expense as incurred
any ongoing costs to maintain its permits which are significantly less than the initial costs to obtain a permit.</FONT></P>

<P><FONT FACE="Times New Roman">In conjunction with the final purchase price allocation as completed in June 2002, the Company reclassified
a portion of the permits recorded upon the acquisition of M&amp;EC on June 25, 2001.  Permits were originally
recorded at $10,553,000 when the Company recorded the acquisition in June 2001.  During June 2002,
$9,149,000 was reclassified from permits to goodwill, additional accrued liabilities were recognized in the
amount of $63,000 and $1,403,000 recorded in permits which represents the actual costs in obtaining the
permits.</FONT></P>

<P><STRONG>Recent Accounting Pronouncements<br>
</STRONG>In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards
No. 143 ("FAS 143"), Accounting for Asset Retirement Obligations, effective for the fiscal years beginning
after June 15, 2002.  This statement provides the accounting for the cost of legal obligations associated with
the retirement of long-lived assets.  FAS 143 requires that companies recognize the fair value of a liability
for asset retirement obligations in the period in which the obligations are incurred and capitalize that amount
as a part of the book value of the long-lived asset.  That cost is then depreciated over the remaining life of
the underlying long-lived asset.  The Company is currently evaluating the impact of the adoption of FAS 143.</P>

<P><FONT FACE="Times New Roman">SFAS No.&nbsp;146, "Accounting for Costs Associated with Exit or Disposal Activities," issued in July&nbsp;2002,
addresses financial accounting and reporting for costs associated with exit or disposal activities. It nullifies
EITF Issue No.&nbsp;94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to
Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS No.&nbsp;146 requires that a liability
be recognized for the cost associated with an exit or disposal activity only when the liability is incurred, that
is, when it meets the definition of a liability in the FASB conceptual framework. SFAS No.&nbsp;146 also
establishes fair value as the objective for initial measurement of liabilities related to exit or disposal activities.
The Statement is effective for exit or disposal activities that are initiated after December&nbsp;31, 2002. The
Company believes the adoption of SFAS No.&nbsp;146 will not have a material impact on the Company's financial
statements. </FONT></P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P align="center">-27-</P>

<P>&nbsp;</P>

<P>&nbsp;</P>

<P ALIGN="CENTER"><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</STRONG></P>

<P ALIGN="CENTER"><STRONG>PART I, ITEM 3</STRONG></P>

<P>The Company is exposed to certain market risks arising from adverse changes in interest rates, primarily due
to the potential effect of such changes on the Company's variable rate loan arrangements with PNC, as
described under Note 4 to Notes to Consolidated Financial Statements.  As discussed therein, the Company
entered into an interest rate swap agreement to modify the interest characteristics of $3.5 million of its $7.0
million term loan with PNC Bank, from a floating rate basis to a fixed rate, thus reducing the impact of
interest rate changes on this portion of the debt.<STRONG>  </STRONG></P>

&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">-28-</p>
<p>&nbsp;</p>
<P ALIGN="CENTER"><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES, INC.</STRONG></P>

<P><STRONG><CENTER>PART II - Other Information</STRONG></CENTER>
</P>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="60">
    <p align="left">Item 1.</p>
  </TD>
<TD width="577"><STRONG><U>Legal Proceedings</U></STRONG><U></U></TD></TR></TABLE>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD width="4"></TD>
<TD width="48"></TD>
<TD width="579">There are no additional material legal proceedings pending against the Company and/or its
subsidiaries not previously reported by the Company in Item 3 of its Form 10-K for the year
ended December 31, 2001, which Item 3 is incorporated herein by reference, except as follows:

<BR WP="BR1"><BR WP="BR2">
  During the second quarter of 2002 the Company's subsidiary, Perma-Fix of Michigan, Inc.
("PFMI") and other PRPs entered into an agreement in principal to settle the lawsuit filed by the
federal government in connection with the Four County Landfill site pending in the United States
District Court for the Northern District of Indiana, South Bend Division.  PFMI would pay
approximately $153,000 of the total settlement.  The settlement is subject to PFMI being allowed
twelve months to pay its portion of the settlement and the parties entering into a definitive
settlement agreement.</TD></TR></TABLE>

<TABLE WIDTH="651">
<TR VALIGN="TOP"><TD COLSPAN="2" ALIGN="RIGHT" width="643"></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57">
    <p align="left">Item 4.</p>
  </TD>
<TD width="580"><STRONG><U>Submission of Matters to a Vote of Security Holders</U></STRONG><U></U></TD></TR></TABLE>

<TABLE WIDTH="678">
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD COLSPAN="8" width="607">The Company's special meeting of stockholders ("Special Meeting") was held on June 14, 2002.
At the Special Meeting, the following  matters were voted on and approved by the stockholders:<br>
  </TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30">1.</TD>
<TD COLSPAN="7" width="571">Approval of the amendment to the Company's Restated Certificate of Incorporation, as
amended, to increase the number of authorized shares of the Company's common stock
from 50,000,000 to 75,000,000 shares.<br>
  </TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30">2.</TD>
<TD COLSPAN="7" width="571">Approval of the issuance of shares of common stock upon the exercise of warrants issued
by the Company to investors and certain placement agents pursuant to the Company's
private placement completed July 30, 2001.

<BR WP="BR1"><BR WP="BR2">
  At the Special Meeting the stockholders approved the amendment to the Company's
Restated Certificate of Incorporation, as amended.  Also, at the Special Meeting the
stockholders approved the issuance of common stock upon exercise of Warrants pursuant
to the private placement.
<P>The votes for, against and abstentions and broker non-votes are as follows:</TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30"></TD>
<TD VALIGN="MIDDLE" width="261"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="6"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="83"><font size="2">For</font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="59"><font size="2">Against</font></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="116"><font size="2">Abstentions
and Broker
Non-votes</font></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30"></TD>
<TD VALIGN="MIDDLE" width="261"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="6"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="83">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="59">
  <hr align="right" noshade size="3" color="#000080">
  </TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" width="116">
  <hr align="right" noshade size="3" color="#000080">
  </TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30"></TD>
<TD VALIGN="MIDDLE" width="261">Approval of the amendment to the
Company's Restated Certificate of
Incorporation, as amended</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="6"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="83">22,687,827</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="59">536,039</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="116">41,665</TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30"></TD>
<TD VALIGN="MIDDLE" width="261">Approval of the issuance of common
stock upon exercise of Warrants
pursuant to the private placement</P>
</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="6"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="83">22,630,305</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="59">609,261</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="116">25,965</TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30"></TD>
<TD VALIGN="MIDDLE" width="261">
</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="6"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="83"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="59"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="116"></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="center" width="622" colspan="9">&nbsp;
    <p>-29-</p>
    <p>&nbsp;</TD>
</TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57"></TD>
<TD width="30"></TD>
<TD VALIGN="MIDDLE" width="261">
</TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="6"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="83"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="59"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="5"></TD>
<TD ALIGN="CENTER" VALIGN="MIDDLE" width="116"></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="RIGHT" width="57">
    <p align="left">Item 6.</p>
  </TD>
<TD COLSPAN="8" width="607"><STRONG><U>Exhibits and Reports on Form 8-K</U></STRONG><U></U></TD></TR></TABLE>

<TABLE WIDTH="713">
<TR VALIGN="TOP"><TD width="65"></TD>
<TD ALIGN="RIGHT" width="32">
  <p align="left">(a)</p>
  </TD>
<TD COLSPAN="3" width="596"><STRONG><U>Exhibits</U></STRONG></TD></TR>
<TR VALIGN="TOP"><TD ROWSPAN="14" width="65"></TD>
<TD ROWSPAN="14" ALIGN="RIGHT" width="32"></TD>
<TD COLSPAN="2" width="87">3.1(i)</TD>
<TD width="503">Restated Certificate of Incorporation, as amended and all Certificates of
Designation.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">4.1</TD>
<TD width="503">Loan and Security Agreement between the Company, subsidiaries of the
Company and PNC Bank, incorporated by reference from Exhibit 99.1 to the
Company's Form 8-K dated, January 31, 2001.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87"><FONT FACE="Times New Roman">4.2</FONT></TD>
<TD width="503"><FONT FACE="Times New Roman">First Amendment to Loan Agreement and Consent, dated January 30,
2001, between the Company and PNC Bank, as incorporated by reference
from Exhibit 99.7 to the Company's Form 8-K, dated January 31, 2001.<br>
  </FONT></TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">4.3</TD>
<TD width="503">Amendment No. 1 to Revolving Credit, Term Loan and Security Agreement,
dated as of June 10, 2002, between the Company and PNC Bank.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">4.4</TD>
<TD width="503">Note and Warrant Purchase Agreement, dated July 331, 2001, between the
Company, Associated Mezzanine Investors-PESI (I), LP. and Bridge East
Capital, LLC is incorporated by reference from Exhibit 99.1 to the Company's
Form 8-K, dated July 30, 2001.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">10.1</TD>
<TD width="503">Basic Oak Ridge Agreement between East Tennessee Materials and Energy
Corporation and Bechtel Jacobs Company, LLC, No. 1GB-99446V, dated June
23, 1998, as incorporated by reference from Exhibit 10.1 to the Registrant's Form
10-Q for the quarter ended September 30, 1998, and filed on November 16, 1998.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">10.2</TD>
<TD width="503">Basic Oak Ridge Agreement between East Tennessee Materials and Energy
Corporation and Bechtel Jacobs Company, LLC, No. 1GB-99447V, dated June&nbsp;23, 1998, as incorporated by reference from Exhibit 10.2 to the Registrant's Form
10-Q for the quarter ended September 30, 1998, and filed on November 16, 1998.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">10.3</TD>
<TD width="503">Basic Oak Ridge Agreement between East Tennessee Materials and Energy
Corporation and Bechtel Jacobs Company, LLC, No. 1GB-99448V, dated June&nbsp;23, 1998, as incorporated by reference from Exhibit 10.3 to the Registrant's Form
10-Q for the quarter ended September 30, 1998, and filed on November 16, 1998.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">10.4</TD>
<TD width="503">Subcontract Change Notice between East Tennessee Materials and Energy
Corporation and Bechtel Jacobs Company, LLC, No. BA-99446/7 and 8F, dated
July 2, 2002, are incorporated by reference from Exhibit 10.24 to the Company's
Registration Statement No. 333-70676.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">10.5</TD>
<TD width="503">Option Agreement, dated July 31, 2001, among the Registrant, Associated
Mezzanine Investors-PESI (I), L.P. and Bridge East Capital, L.P., as incorporated
by reference from Exhibit 99.8 to the Registrant's Current Report on Form 8-K,
dated July 30, 2001, and filed on August 7, 2001.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">10.6</TD>
<TD width="503">Common Stock Purchase Warrant, dated July 31, 2001, granted by the Registrant
to Associated Mezzanine Investors-PESI (I), L.P. for the purchase of up to
712,073 shares of the Registrant's common stock at an exercise prices of $1.50
per share.  A substantially similar warrant was issued to Bridge East Capital, L.P.<br>
  </TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">99.1</TD>
<TD width="503"><FONT FACE="Times New Roman">Certification by Dr. Louis F. Centofanti, Chief Executive Officer of the
  Company.<br>
  </FONT></TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87">99.2</TD>
<TD width="503">Certification by Richard T. Kelecy, Chief Financial Officer of the Company.</TD></TR>
<TR VALIGN="TOP">
<TD COLSPAN="2" width="87"></TD>
<TD width="503"></TD></TR>
<TR VALIGN="TOP"><TD width="65"></TD>
<TD ALIGN="RIGHT" width="32"></TD>
<TD COLSPAN="2" width="87"></TD>
<TD width="503"></TD></TR>
<TR VALIGN="TOP"><TD width="687" colspan="5" align="center">&nbsp;
    <p>-30-</p>
    <p>&nbsp;</TD>
</TR>
<TR VALIGN="TOP"><TD width="65"></TD>
<TD ALIGN="RIGHT" width="32"></TD>
<TD COLSPAN="2" width="87"></TD>
<TD width="503"></TD></TR>
<TR VALIGN="TOP"><TD width="65"></TD>
<TD ALIGN="RIGHT" width="32">
  <p align="left">(b)</p>
  </TD>
<TD width="609" colspan="3"><STRONG>&nbsp;<U>Reports on Form 8-K</U></STRONG></TD>
</TR>
<TR VALIGN="TOP"><TD width="65"></TD>
<TD ALIGN="RIGHT" width="32"></TD>
<TD width="609" colspan="3">Current report on Form 8-K (Item 5-Other Events and Regulation FD Disclosure),&nbsp;<br>
was filed by the Company on June 19, 2002, announcing the results of the Special&nbsp;<br>
Meeting of Stockholders held on June 14, 2002.</TD>
</TR>
<TR VALIGN="TOP"><TD width="65"></TD>
<TD ALIGN="RIGHT" width="32"></TD>
<TD width="1"></TD>
<TD COLSPAN="2" width="608"></TD></TR>
<TR VALIGN="TOP"><TD width="65"></TD>
<TD ALIGN="RIGHT" width="32"></TD>
<TD width="1"></TD>
<TD COLSPAN="2" width="608"></TD></TR></TABLE>

&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">-31-</p>
<p>&nbsp;</p>
<P>		</P>

<P><CENTER><STRONG>SIGNATURES</STRONG></CENTER>
</P>

<P>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.</P>

<TABLE WIDTH="100%">
<TR VALIGN="TOP"><TD></TD>
<TD>PERMA-FIX ENVIRONMENTAL SERVICES, INC.</TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD></TD></TR>
<TR VALIGN="TOP"><TD>Date: August 14, 2002</TD>
<TD><br>
  <br>
  By:<U>&nbsp;&nbsp;&nbsp;/s/ Louis Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;			                        <br>
  </U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Executive Officer</TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD></TD></TR>
<TR VALIGN="TOP"><TD></P>
<BR WP="BR1"><BR WP="BR2">
<BR WP="BR1"><BR WP="BR2"></TD>
<TD>
<BR WP="BR1"><BR WP="BR2">By:<U>&nbsp;&nbsp;&nbsp;/s/ Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;					<br>
</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer</TD></TR></TABLE>

<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">-32-</p>
<p>&nbsp;</p>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>3
<FILENAME>coi-amend.htm
<DESCRIPTION>RESTATED CERTIFICATE OF INCORPORATION/AMENDMENTS
<TEXT>
<HEAD><TITLE>Exhibit 3.1(i) - Restated Certificate of Incorporation/Amendments</TITLE>
<P align=center><FONT size=3>State of Delaware<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAGE
1</FONT></P>
<P align=center><font size="4"><i>Office of the Secretary of State&nbsp;<br>
_______________________</i></font></P>
<P align=right></P><BR
WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>I, HARRIET SMITH WINDSOR,
SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED ARE
TRUE AND CORRECT COPIES OF ALL DOCUMENTS FILED FROM AND INCLUDING THE RESTATED
CERTIFICATE OF "PERMA-FIX ENVIRONMENTAL SERVICES, INC." AS RECEIVED AND FILED IN
THIS OFFICE.</FONT>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> THE FOLLOWING DOCUMENTS HAVE BEEN
CERTIFIED:</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> RESTATED CERTIFICATE, FILED THE TWENTY-SIXTH
DAY OF NOVEMBER, A.D. 1991, AT 10 O'CLOCK A.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF AMENDMENT, CHANGING ITS NAME
FROM "NATIONAL ENVIRONMENTAL INDUSTRIES, LTD." TO "PERMA-FIX ENVIRONMENTAL
SERVICES, INC.", FILED THE SEVENTEENTH DAY OF DECEMBER, A.D. 1991, AT 4:30
O'CLOCK A.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF AMENDMENT, FILED THE FOURTH
DAY OF SEPTEMBER, A.D. 1992, AT 11:30 O'CLOCK A.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE SIXTH
DAY OF FEBRUARY, A.D. 1996, AT 4 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
TWENTIETH DAY OF FEBRUARY, A.D. 1996, AT 10:45 O'CLOCK A.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
NINETEENTH DAY OF JULY, A.D. 1996, AT 12:30 O'CLOCK P.M.</FONT></P>
<P><FONT size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Harriett Smith Windsor&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</FONT><font size="2"><i>Harriet Smith Windsor, Secretary of State</i></font></P>
<P>&nbsp;<FONT size=3>2249849&nbsp;
8100X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUTHENTICATION:&nbsp;
</FONT><FONT size=3>1260024</FONT><FONT size=3><BR><BR>010358121&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATE:&nbsp;&nbsp;07-24-01</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>State of Delaware<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAGE
2</FONT></P>
<P align=center><font size="4"><i>Office of the Secretary of State&nbsp;<br>
_______________________</i></font></P>
<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
SIXTEENTH DAY OF DECEMBER, A.D. 1996, AT 4:30 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF AMENDMENT, FILED THE SIXTH DAY
OF JANUARY, A.D. 1997, AT 4:30 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED&nbsp; THE
ELEVENTH DAY OF JUNE, A.D. 1997, AT 11 O'CLOCK A.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
FOURTEENTH DAY OF JULY, A.D. 1997, AT 11:15 O'CLOCK A.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
THIRTEENTH DAY OF NOVEMBER, A.D. 1997, AT 1:30 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION FILED THE
THIRTEENTH DAY OF NOVEMBER, A.D. 1997, AT 1:31 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
TWENTH-SIXTH DAY OF NOVEMBER, A.D. 1997, AT 10 O'CLOCK A.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE TENTH
DAY OF JULY, A.D. 1998, AT 12 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
SIXTEENTH DAY OF JULY, A.D. 1998, AT 1:30 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
SIXTEENTH DAY OF JULY, A.D. 1998, AT 1:31 O'CLOCK P.M.</FONT></P>
<P><FONT size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Harriett Smith Windsor&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</FONT><font size="2"><i>Harriet Smith Windsor, Secretary of State</i></font></P>
<P>&nbsp;<FONT size=3>2249849&nbsp;
8100X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUTHENTICATION:&nbsp;
</FONT><FONT size=3>1260024</FONT><FONT size=3><BR><BR>010358121&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATE:&nbsp;&nbsp;07-24-01</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>State of Delaware<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAGE
3</FONT></P>
<P align=center><font size="4"><i>Office of the Secretary of State&nbsp;<br>
_______________________</i></font></P>
<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
SIXTEENTH DAY OF JULY, A.D. 1998, AT 1:32 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
FIFTEENTH DAY OF JULY, A.D. 1999, AT 12:30 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION,FILED THE
FIFTEENTH DAY OF JULY, A.D. 1999, AT 12:31 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGANTION, FILED THE
FIFTEENTH DAY OF JULY, A.D. 1999, AT 12:32 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE
FIFTEENTH DAY OF JULY, A.D. 1999, AT 12:33 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;<FONT size=3> CERTIFICATE OF DESIGNATION, FILED THE TENTH
DAY OF AUGUST, A.D. 1999, AT 12:30 O'CLOCK P.M.</FONT></P>
<P>&nbsp;&nbsp;&nbsp; CERTIFICATE OF DESIGNATION, FILED THE TENTH DAY OF AUGUST,
A.D. 1999, AT 12:31 O'CLOCK P.M.</P>
<P>&nbsp;&nbsp;&nbsp; CERTIFICATE OF DESIGNATION, FILED THE TENTH DAY OF AUGUST,
A.D. 1999, AT 12:32 O'CLOCK P.M.</P>
<P>&nbsp;&nbsp;&nbsp; CERTIFICATE OF DESIGNATION, FILED THE TENTH DAY OF AUGUST,
A.D. 1999, AT 12:33 O'CLOCK P.M.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CERTIFICATE OF DESIGNATION, FILED THE
FOURTEENTH DAY OF JUNE, A.D. 2001, AT 10 O'CLOCK A.M.</P>
<P><FONT size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Harriett Smith Windsor&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</FONT><font size="2"><i>Harriet Smith Windsor, Secretary of State</i></font></P>
<P>&nbsp;<FONT size=3>2249849&nbsp; 8100X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUTHENTICATION:&nbsp;
1260024<BR><BR>010358121&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATE:&nbsp;&nbsp;07-24-01</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>State of Delaware<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAGE
4</FONT></P>
<P align=center><font size="4"><i>Office of the Secretary of State&nbsp;<br>
_______________________</i></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;CERTIFICATE OF DESIGNATION, FILED THE FOURTEENTH DAY
OF JUNE, A.D. 2001, AT 10:01 O'CLOCK A.M.</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Harriett Smith Windsor&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</FONT><font size="2"><i>Harriet Smith Windsor, Secretary of State</i></font></P>
<P>&nbsp;<FONT size=3>2249849&nbsp; 8100X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUTHENTICATION:&nbsp;
1260024<BR><BR>010358121&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATE:&nbsp;&nbsp;07-24-01</FONT></P>
<P>&nbsp;</P>
<P align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;<br>
FILED 10:00 AM 11/26/1991<br>
913305254 - 2249849&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></P>
<P align=center><FONT size=3>RESTATED CERTIFICATE OF INCORPORATION</FONT></P>
<P align=center><FONT size=3>OF</FONT></P>
<P align=center><FONT size=3>NATIONAL ENVIRONMENTAL INDUSTRIES, LTD.</FONT></P>
<P><FONT
size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;The
present name of the corporation (hereinafter</FONT> <FONT size=3>called the
"Corporation") is National Environmental Industries,</FONT> <FONT size=3>Ltd.,
and the date of filing the original certificate of</FONT> <FONT
size=3>incorporation of the Corporation with the Secretary of State of
the</FONT> <FONT size=3>State of Delaware is December 19,
1990.<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;The
certificate of incorporation of the Corporation</FONT> <FONT size=3>is hereby
amended by striking out Articles FOURTH through NINTH</FONT> <FONT
size=3>thereof and by substituting in lieu thereof new Articles FOURTH</FONT>
<FONT size=3>through NINTH as set forth in the Restated Certificate of</FONT>
<FONT size=3>Incorporation hereinafter provided
for.<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;The
provisions of the certificate of incorporation</FONT> <FONT size=3>as heretofore
amended and/or supplemented, and as herein amended,</FONT> <FONT size=3>are
hereby restated and integrated into the single instrument which</FONT> <FONT
size=3>is hereinafter set forth, and which is entitled Restated</FONT> <FONT
size=3>Certificate of Incorporation of National Environmental Industries,</FONT>
<FONT size=3>Ltd. without any further amendment other than the amendment</FONT>
<FONT size=3>certified herein and without any discrepancy between the</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>provisions</FONT> <FONT size=3>of the certificate of
incorporation as heretofore amended and</FONT> <FONT size=3>supplemented and the
provisions of the said single instrument</FONT> <FONT size=3>hereinafter set
forth.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;The
amendment and restatement of the certificate of</FONT> <FONT
size=3>incorporation herein certified have been duly adopted by the</FONT> <FONT
size=3>stockholders in accordance with the provisions of Sections 228,
242</FONT> <FONT size=3>and 245 of the General Corporation Law of the State of
Delaware.</FONT>&nbsp; <FONT size=3>Prompt written notice of the adoption of the
amendment and of the</FONT> <FONT size=3>restatement of the certificate of
incorporation herein certified</FONT> <FONT size=3>has been given to those
stockholders who have not consented in</FONT> <FONT size=3>writing thereto, as
provided in Section 228 of the General</FONT> <FONT size=3>Corporation Law of
the State of Delaware.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;The
certificate of incorporation of the Corporation,</FONT> <FONT size=3>as amended
and restated herein, shall at the effective time of this</FONT> <FONT
size=3>Restated Certificate of Incorporation, read as follows:</FONT></P>
<P align=center><FONT size=3>"Restated Certificate of
Incorporation<BR>of<BR>National Environmental Industries, Ltd.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST:
The name of the Corporation is National</FONT> <FONT size=3>Environmental
Industries, Ltd.<BR><BR></FONT>&nbsp;&nbsp;<FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECOND:
The address of the Corporation's registered</FONT> <FONT size=3>office in the
State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of
Dover. The name of its registered</FONT> <FONT size=3>agent at such address is
The Prentice-Hall Corporation System, Inc.</FONT></P>
<P>&nbsp;</P>
<P align=center>2</P>
<P>&nbsp;</P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIRD:
The purpose of the Corporation is to engage in</FONT> <FONT size=3>any lawful
act or activity for which a corporation may be organized</FONT> <FONT
size=3>under the laws of the General Corproation Law of the State of</FONT>
<FONT size=3>Delaware.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOURTH:
The total number of shares of capital stock which the Corporation shall have
authority to issue is Twenty-Two Million (22,000,000) shares, of which Twenty
Million (20,000,000)</FONT> <FONT size=3>shares shall be Common Stock, par value
$.001 per share, and Two</FONT> <FONT size=3>Million (2,000,000) shares shall be
Preferred Stock, $.001 par</FONT> <FONT size=3>value per share.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Preferred Stock may be issued from time to time in one or more series. The Board
of Directors is hereby expressly authorized to provide, by resolution or
resolutions duly adopted by it prior to issuance, for the creation of each such
series and to fix the designation and the powers, preferences, rights,
qualifications, limitations and restrictions relating to the shares of each such
series. The authority of the Board of Directors with respect to each such series
of Preferred Stock shall include, but not be limited to, determining the
following:</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
the designation of such series, the number of shares to constitute such series
and the stated value if different from the par value thereof;&nbsp;</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
whether the shares of such series shall have voting rights, in addition to any
voting rights provided by law, and, if so, the terms of such voting rights,
which may be general</FONT> <FONT size=3>or limited;</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>3</FONT></P>
<P>&nbsp;</P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
the dividends, if any, payable on such series, whether any such dividends shall
be cumulative, and, if so, from what dates, the conditions and dates upon which
such dividends shall be payable, and the preference or relation which such
dividends shall bear to the dividends payable on any shares of stock of any
other class or any other series of Preferred Stock;</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
whether the shares of such series shall be subject to redemption by the
Corporation, and, if so, the times, prices and other conditions of such
redemption;&nbsp;</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
the amount or amounts payable upon shares of such</FONT> <FONT size=3>series
upon, and the rights of the holders of such series in,</FONT> <FONT size=3>the
voluntary or involuntary liquidation, dissolution or</FONT> <FONT size=3>winding
up, or upon any distribution of the assets of the</FONT> <FONT
size=3>Corporation;</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
whether the shares of such series shall be subject to the operation of a
retirement or sinking fund and, if so, the extent to and manner in which any
such retirement or sinking fund shall be applied to the purchase or redemption
of the shares of such series for retirement or other corporate purposes and the
terms and provisions relating to the operation thereof;</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>4</FONT></P>
<P>&nbsp;</P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
whether the shares of such series shall be convertible into, or exchangeable
for, shares of stock of any other class or any other series of Preferred Stock
or any other securities and, if so, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same, and any
other terms and conditions of conversion or exchange;</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
the limitations and restrictions, if any, to be effective while any shares of
such series are outstanding upon the payment of dividends or the making of other
distributions on, and upon the purchase, redemption or other acquisition by the
Corporation of, the Common Stock or shares of stock of any other class or any
other series of Preferred Stock;</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
the conditions or restrictions, if any, upon the creation of indebtedness of the
Corporation or upon the issue of any additional stock, including additional
shares of such series or of any other series of Preferred Stock or of any other
class; and</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
any other powers, preferences and relative participating, optional and other
special rights, and any qualifications, limitations and restrictions
thereof.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
powers, preferences and relative, participating, optional and other special
rights of each series of Preferred Stock, and the qualifications, limitations or
restrictions thereof,&nbsp;</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>5</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>if any, may differ from those of any and all other series at any
time outstanding. All shares of any one series of Preferred Stock shall be
identical in all respects with all other shares of such series, except that
shares of any one series issued at different times may differ as to the dates
from which dividends thereof shall be cumulative.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIFTH:
Unless required by law or determined by the chairman of the meeting to be
advisable, the vote by stockholders on any matter, including the election of
directors, need not be by written ballot.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SIXTH:
The Corporation reserves the right to increase or decrease its authorized
capital stock, or any class or series thereof, and to reclassify the same, and
to amend, alter, change or repeal any provision contained in the Certificate of
Incorporation under which the Corporation is organized or in any amendment
thereto, in the manner now or hereafter prescribed by law, and all rights
conferred upon stockholders in said Certificate of Incorporation or any
amendment thereto are granted subject to the aforementioned
reservation.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEVENTH:
The Board of Directors shall have the power at any time, and from time to time,
to adopt, amend and repeal any and all By-Laws of the Corporation.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EIGHTH:
All persons who the Corporation is empowered to indemnify pursuant to the
provisions of Section 145 of the General Corporation Law of the State of
Delaware (or any similar provision or provisions</FONT></P>
<P>&nbsp;</P>
<P align=center>6</P>
<P>&nbsp;</P>
<P><FONT size=3>of applicable law at the time in effect), shall be indemnified
by the Corporation to the full extent permitted thereby. The foregoing right of
indemnification shall not be deemed to be exclusive of any other rights to which
those seeking indemnification maybe entitled under any by-law, agreement, vote
of stockholders or disinterested directors, or otherwise. No repeal or amendment
of this Article EIGHTH shall adversely affect any rights of any person pursuant
to this Article Eighth which existed at the time of such repeal or amendment
with respect to acts or omissions occurring prior to such repeal or
amendment.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NINTH:
No director of the Corporation shall be personally liable to the Corporation or
its stockholders for any monetary damages for breaches of fiduciary duty as a
director, provided that this provisions shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the General Corporation Law of the State of Delaware;
or (iv) for any transaction from which the director derived an improper personal
benefit. No repeal or amendment of this Article NINTH shall adversely affect any
rights of any person pursuant to this</FONT></P>
<P>&nbsp;</P>
<P align=center>7</P>
<P>&nbsp;</P>
<P><FONT size=3>Article NINTH which existed at the time of such repeal or
amendment with</FONT> <FONT size=3>respect to acts or omissions occurring prior
to such repeal or</FONT> <FONT size=3>amendment."</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, we
have signed this Certificate this</FONT> <FONT size=3>22nd day of November,
1991.</FONT></P><BR><BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President

<P><BR>ATTEST:<BR><BR><BR><U>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Carol A.
Dixon&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>Secretary</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center>8</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="1">STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 04:30 PM 12/17/1991<br>
</font>&nbsp;&nbsp;&nbsp;<font size="1">913525113 - 2249849</font></P>
<P align=center><FONT size=3>CERTIFICATE OF AMENDMENT<BR>TO THE<BR>RESTATED
CERTIFICATE OF INCORPORATION<BR>OF<BR>NATIONAL ENVIRONMENTAL INDUSTRIES,
LTD.</FONT></P><FONT size=3><BR WP="BR1"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is hereby certified that:</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;The
name of the corporation (hereinafter called the "Corporation") is National
Environmental Industries, Ltd.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;The
Restated Certificate of Incorporation is hereby amended by striking out Article
FIRST thereof and by substituting</FONT> <FONT size=3>in lieu of said Article
FIRST the following new Article:</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"FIRST:
The name of the Corporation is Perma-Fix Environmental Services,
Inc."</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;The
amendment of the Certificate of Incorporation herein certified has been duly
adopted in accordance with the provisions of Sections 228 and 242 of the General
Corporation Law of the State of Delaware. Prompt written notice of the adoption
of the amendment herein certified has been given to those stockholders who have
not consented in writing thereto, as provided in Section 228 of the General
Corporation Law of the State of Delaware.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, we have signed this Certificate this 16th day of December,
1991.<BR><BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Louis Centofanti,
President</FONT></P>
<P><FONT size=3>ATTEST:</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"><U>/s/
Mark
Zwecker&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>Mark
Zwecker, Secretary</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2"><BR WP="BR1"></FONT><BR WP="BR2">
<P align="right">&nbsp;&nbsp;&nbsp;<font size="1">STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 11:30 PM 09/04/1992<br>
</font>&nbsp;&nbsp;&nbsp;<font size="1">922525072 - 2249849</font></P>
<P align=center><FONT size=3>CERTIFICATE OF AMENDMENT<BR>TO<BR>RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED<BR>OF<BR>PERMA-FIX ENVIRONMENTAL
SERVICES, INC.</FONT></P>
<P>&nbsp;</P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix
Environmental Services, Inc., a Delaware</FONT> <FONT size=3>corporation (the
"Corporation"), does hereby certify:<BR><BR
WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the
amendment set forth below to the Corporation's Restated Certificate of
Incorporation, as amended, was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware and written
notice thereof has been given as provided in Section 228 thereof:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I)
The first paragraph of Article FOURTH of the</FONT> <FONT size=3>Corporation's
Restated Certificate of Incorporation, as amended, is</FONT> <FONT size=3>hereby
deleted and replaced in its entirety by the following:</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fourth:
The total number of shares of capital</FONT> <FONT size=3>stock that the
Corporation shall
have&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authority
to</FONT> <FONT size=3>issue is 22,000,000 shares of which 20,000,000</FONT>
<FONT size=3>shares of the par
value&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
$.001 per share shall be</FONT> <FONT size=3>designated Common Stock ("Common
Stock"), and</FONT>&nbsp;<FONT
size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,000,000
shares of the par value of $.001 per</FONT> <FONT size=3>share shall be
designated
Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of September 4, 1992 (the "Effective Time"), each share of Common Stock
issued&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
outstanding immediately prior to the Effective Time shall automatically be
changed&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
converted, without any action on the part of the holder thereof, into
1/3.0236956&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
a share of Common Stock and, in connection with fractional interests in shares
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common
Stock of the Corporation, each holder whose aggregate holdings of
shares&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
Common stock prior to the Effective Time amounted to less than 3.0236956,
or&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
a number not evenly divisible by 3.0236956 shares of Common Stock shall
be&nbsp;</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;entitled
to receive for such fractional interest, and at such time, any such
fractional&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;interest
in shares of Common Stock of the Corporation shall be converted into
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;right
to receive, upon surrender of the stock certificates formerly
representing&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Common Stock of the Corporation, one whole share of Common Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS whereof, Perma-Fix Environmental Services,</FONT> <FONT size=3>Inc. has
caused this Certificate to be signed and attested to by</FONT> <FONT size=3>its
duly authorized officers as of this first day of September,</FONT> <FONT
size=3>1992.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix
Environmental Services, Inc.</FONT></P><FONT size=3><BR WP="BR2"><BR
WP="BR1"><BR
WP="BR2"></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>By: <U>/s/ Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Dr. Louis F.
Centofanti<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>President</FONT>
<P><FONT size=3><BR WP="BR1">ATTEST:</FONT>
<P>
<P><FONT size=3>By:<U> /s/ Mark
Zwecker&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Secretary</FONT></P><BR WP="BR1">
<P><FONT size=-1>981311720</FONT></P>&nbsp;
<P align="right"><font size="1">STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 04:00 PM 02/06/1996<br>
</font>&nbsp;&nbsp;&nbsp;<font size="1">9600435778 - 2249849</font></P>
<P align=center><FONT size=3>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES I CLASS A
PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES, INC.</FONT></P><FONT
size=3><BR WP="BR1"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, pursuant to authority
conferred upon by the Board of</FONT> <FONT size=3>Directors by the
Corporation's Certificate of Incorporation, as</FONT> <FONT size=3>amended, and
pursuant to the provisions of Section 151 of the</FONT> <FONT size=3>Delaware
Corporation Law, said Board of Directors, acting by</FONT> <FONT
size=3>unanimous written consent in lieu of a meeting dated February 2,</FONT>
<FONT size=3>1996, hereby adopted the terms of the Series I Class A
Preferred</FONT> <FONT size=3>Stock, which resolutions are set forth on the
attached page.</FONT></P>
<P><FONT size=3>Dated: February 2, 1996</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL SERVICES, INC.</FONT></P><FONT size=3><BR WP="BR1"><BR
WP="BR2"><BR
WP="BR1"></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>By<U> /s/ Louis F.
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.
Louis F.
Centofanti<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Chairman of the Board</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2">ATTEST:</FONT>
<P><U><FONT size=3>/s/ Mark A.
Zwecker&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></FONT></U>M<FONT
size=3>ark A. Zwecker, Secretary</FONT></P>&nbsp;
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3><B>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<BR>(the
"Corporation")<BR><BR>RESOLUTION OF THE BOARD OF DIRECTORS<BR><BR>FIXING THE
NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS
ATTACHING TO THE SERIES I CLASS A<BR>PREFERRED STOCK</B></FONT></P>
<P><FONT size=-1><BR></FONT><FONT size=3><B>WHEREAS,</B></FONT></P>
<P><FONT size=3>A.&nbsp;&nbsp;The Corporation's share capital includes Preferred
Stock, par</FONT> <FONT size=3>value $.001 per share ("Preferred
Stock"),<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; which Preferred</FONT> <FONT
size=3>Stock may be issued in one or more series with the directors</FONT> <FONT
size=3>of the Corporation (the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "Board") being
entitled by resolution</FONT> <FONT size=3>to fix the number of shares in each
series and to designate</FONT> <FONT
size=3>the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;rights, designations,
preferences, and relative,</FONT> <FONT size=3>participating, optional or other
special rights, privileges,<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT> <FONT
size=3>restrictions and conditions attaching to the shares of each</FONT> <FONT
size=3>such series; and<BR><BR>B.&nbsp;&nbsp;It is in the best interests of the
Corporation for the Board to create a new series from the
Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock designated
as</FONT> <FONT size=3>the Series I Class A Preferred Stock, par value
$.001.&nbsp;</FONT></P>
<P><FONT size=3><B>NOW, THEREFORE, BE IT RESOLVED,
THAT:<BR></B><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Series I Class A
Preferred Stock, par value $.001 (the</FONT> <FONT size=3>"Series I Class A
Preferred Stock") of the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation
shall</FONT> <FONT size=3>consist of 1,100 shares and no more and shall be
designated as</FONT> <FONT size=3>the Series I Class
A<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred Stock and in addition to
the</FONT> <FONT size=3>preferences, rights, privileges, restrictions and
conditions</FONT>&nbsp;<FONT
size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;attaching to all the Series I
Class A Preferred Stock as a</FONT> <FONT size=3>series, the rights, privileges,
restrictions&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and conditions</FONT>
<FONT size=3>attaching to the Series I Class A Preferred Stock shall be
as</FONT> <FONT size=3>follows:</FONT></P>
<P><FONT size=3><B><U>Part 1 - Voting and Preemptive Rights.</U></B></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;Except as otherwise provided herein, in the
Certificate of Incorporation (the "Articles") or the General Corporation Law of
the State of Delaware (the "GCL"), each holder of Series I Class A Preferred
Stock, by virtue of his ownership thereof, shall be entitled to cast that number
of votes per share thereof on each matter submitted to the Corporation's
shareholders for voting which equals the number of votes which could be cast by
such holder of the number of shares of the Corporation's Common Stock, par value
$.001 per share (the "Common Shares") into which such shares of Series I Class A
Preferred Stock would be converted into pursuant to Part 5 hereof immediately
prior to the record date of such vote. The outstanding Series I Class A
Preferred Stock and the Common Shares of the Corporation shall vote together as
a single class, except as otherwise expressly required by the GCL or Part 7
hereof. The Series I Class A Preferred Stock shall not have cumulative voting
rights.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>1.2&nbsp;&nbsp;The Series I Class A 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.</FONT></P>
<P><FONT size=3><B><U>Part 2 - Liquidation Rights.</U></B></FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;If the Corporation shall be voluntarily or
involuntarily liquidated, dissolved or wound up at any time when any Series I
Class A Preferred Stock shall be outstanding, the holders of the then
outstanding Series I Class A Preferred Stock shall have a preference in
distribution of the Corporation's property available for distribution to the
holders of the Common Shares equal to $1,000 consideration per outstanding share
of Series I Class A Preferred Stock, together with an amount equal to all unpaid
dividends accrued thereon, if any, to the date of payment of such distribution,
whether or not declared by the Board; <U>provided</U>, <U>however</U>, that the
merger of the Corporation with any corporation or corporations in which the
Corporation is not the survivor, or the sale or transfer by the Corporation of
all or substantially all of its property, or any reduction by at least seventy
percent (70%) of the then issued and outstanding Common Shares of the
Corporation, shall be deemed to be a liquidation of the Corporation within the
meaning of any of the provisions of this Part 2.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;Subject to the provisions of Part 6 hereof, all
amounts to be paid as preferential distributions to the holders of Series I
Class A 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
Common Shares, whether now or hereafter authorized, in connection with such
liquidation, dissolution or winding up.</FONT></P>
<P><FONT size=3><B><U>Part 3 - Dividends.</U></B></FONT></P>
<P><FONT size=3>3.1&nbsp;&nbsp;Holders of record of Series I Class A Preferred
Stock, out of funds legally available therefor and to the extent permitted by
law, shall be entitled to receive dividends on their Series I Class A Preferred
Stock, which dividends shall accrue at the rate per share of five percent (5%)
per annum of consideration paid for each share of Series I Class A Preferred
Stock ($50.00 per share per year for each full year) commencing on the date of
the issuance thereof, payable, at the option of the Corporation, (i) in cash, or
(ii) by the issuance of that number of whole Common Shares computed by dividing
the amount of the dividend by the market price applicable to such
dividend.</FONT></P>
<P><FONT size=3>3.2&nbsp;&nbsp;For the purposes of this Part 3 and Part 4
hereof, "market price" means the average of the daily closing prices of Common
Shares for a period of five (5) consecutive trading days ending on the date on
which any dividend becomes payable or of any notice of redemption as the case
may be. The closing price for each trading day shall be (i) for any period
during which the Common Shares shall be listed for trading on a national
securities exchange, the last reported bid price per share of Common Shares as
reported by the primary stock exchange, or the Nasdaq Stock Market, if the
Common Shares are quoted on the Nasdaq Stock Market, or (ii) if last sales price
information is not available, the average closing bid price of Common Shares as
reported</FONT></P>
<P>&nbsp;</P>
<P align=center>-2-</P>
<P>&nbsp;</P>
<P><FONT size=3>by the Nasdaq Stock Market, or if not so listed or reported,
then as reported by National Quotation Bureau, Incorporated, or (iii) in the
event neither clause (i) nor (ii) is applicable, the average of the closing bid
and asked prices as furnished by any member of the National Association of
Securities Dealers, Inc., selected from time to time by the Corporation for that
purpose.</FONT></P>
<P><FONT size=3>3.3&nbsp;&nbsp;Dividends on Series I Class A Preferred Stock
shall be</FONT> <FONT size=3>cumulative, and no dividends or other distributions
shall be paid</FONT> <FONT size=3>or declared and set aside for payment on the
Common Shares until</FONT> <FONT size=3>full cumulative dividends on all
outstanding Series I Class A Preferred Stock shall have been paid or declared
and set aside for payment.</FONT></P>
<P><FONT size=3>3.4&nbsp;&nbsp;Dividends shall be payable in arrears, at the
rate of $12.50 per share for each full calendar quarter on each February 28, May
31, August 31, and November 30 of each calendar year, to the holders of record
of the Series I Class A Preferred Stock as they appear in the securities
register of the Corporation on such record dates not more than sixty (60) nor
less than ten (10) days preceding the payment date thereof, as shall be fixed by
the Board; provided, however, that the initial dividend for the Series I Class A
Preferred Stock shall accrue for the period commencing on the date of the
issuance thereof to and including December 31, 1995.</FONT></P>
<P><FONT size=3>3.5&nbsp;&nbsp;If, in any quarter, insufficient funds are
available to pay such dividends as are then due and payable with respect to the
Series I Class A Preferred Stock and all other classes and series of the capital
stock of the Corporation ranking in parity therewith (or such payment is
otherwise prohibited by provisions of the GCL, such funds as are legally
available to pay such dividends shall be paid or Common Shares will be issued as
stock dividends to the holders of Series I Class A Preferred Stock and to the
holders of any other series of Class A Preferred Stock then outstanding as
provided in Part 6 hereof, in accordance with the rights of each such holder,
and the balance of accrued but undeclared and/or unpaid dividends, if any, shall
be declared and paid on the next succeeding dividend date to the extent that
funds are then legally available for such purpose.</FONT></P>
<P><FONT size=3><B><U>Part 4 - Redemption.</U></B></FONT></P>
<P><FONT size=3>4.1&nbsp;&nbsp;At any time, and from time to time, on and after
one hundred twenty (120) days from the date of the issuance of any Series I
Class A Preferred Stock, if the average of the closing bid prices for the Common
Shares for five (5) consecutive trading days shall be in excess of $1.50, the
Corporation may, at its sole option, but shall not be obligated to, redeem, in
whole or in part, the then outstanding Series I Class A Preferred Stock at a
price per share of U. S. $1,000 each (the "Redemption Price") (such price to be
adjusted proportionately in the event of any change of the Series I Class A
Shares into a different number of Shares).</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;Thirty (30) days prior to any date stipulated by
the Corporation for the redemption of Series I Class A 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 I Class A Preferred
Stock. The Redemption Notice shall</FONT></P>
<P>&nbsp;</P>
<P align=center>-3-</P>
<P>&nbsp;</P>
<P><FONT size=3>state: (i) the Redemption Date of such Shares, (ii) the number
of Series I Class A 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 I Class A Preferred Stock
to be redeemed from such holder, and (iv) instructions as to how to specify to
the Corporation the number of Series I Class A Preferred Stock to be redeemed as
provided in this Part 4, and the number of shares to be converted into Common
Shares as provided in Part 5 hereof.</FONT></P>
<P><FONT size=3>4.3&nbsp;&nbsp;Upon receipt of the Redemption Notice, any
Eligible Holder (as defined in Section 5.2 hereof) shall have the option, at its
sole election, to specify what portion of its Series I Class A Preferred Stock
called for redemption in the Redemption Notice shall be redeemed as provided in
this Part 4 or converted into Common Shares in the manner provided in Part 5
hereof, except that, notwithstanding any provision of such Part 5 to the
contrary, any Eligible Holder shall have the right to convert into Common Shares
that number of Series I Class A Preferred Stock called for redemption in the
Redemption Notice.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;On or before the Redemption Date in respect of
any Series I Class A 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 5.5 hereof, to the order of the
person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered share certificate shall be canceled and retired.
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
I Class A Shares which are not being redeemed to be registered in the names of
the persons whose names appear as the owners on the respective surrendered share
certificates and deliver such certificate to such person.</FONT></P>
<P><FONT size=3>4.5&nbsp;&nbsp;On the Redemption Date in respect of any Series I
Class A Shares 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 I
Class A Shares in respect of which the Corporation has received notice from the
Eligible Holder thereof of its election to convert Series I Class A Shares in to
Common Shares), 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 share 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</FONT></P>
<P>&nbsp;</P>
<P align=center>-4-</P>
<P>&nbsp;</P>
<P><FONT size=3>called for redemption shall be entitled to receive payment of
the Redemption Price in respect of their shares only from the
Corporation.</FONT></P>
<P><FONT size=3><B><U>Part 5 - Conversion.</U></B></FONT></P>
<P><FONT size=3>5.1&nbsp;&nbsp;For the purposes of conversion of the Series I
Class A</FONT> <FONT size=3>Preferred Stock shall be valued at $1,000 per share
("Value"), and,</FONT> <FONT size=3>if converted, the Series I Class A Preferred
Stock shall be</FONT> <FONT size=3>converted into such number of Common Shares
(the "Conversion</FONT> <FONT size=3>Shares") as is obtained by dividing the
aggregate Value of the</FONT> <FONT size=3>shares of Series I Class A Preferred
Stock being so converted,</FONT> <FONT size=3>together with all accrued but
unpaid dividends thereon, by the "Average Stock Price" per share of the
Conversion Shares (the "Conversion Price"), subject to adjustment pursuant to
the provisions of this Part 5. For purposes of this Part 5, the "Average Stock
Price" means the lesser of (x) seventy percent (70%) of the average daily
closing bid prices of the Common Shares for the period of five (5) consecutive
trading days immediately preceding the date of subscription by the Holder or (y)
seventy percent (70%) of the daily average closing bid prices of Common Shares
for the period of five (5) consecutive trading days immediately preceding the
date of the conversion of the Series I Class A Preferred Stock in respect of
which such Average Stock Price is determined. The closing price for each trading
day shall be determined as provided in the last sentence of Section
3.2.&nbsp;</FONT></P>
<P><FONT size=3>5.2&nbsp;&nbsp;Any holder of Series I Class A Preferred Stock
(an "Eligible Holder") may at any time commencing forty-five (45) days after the
issuance of any Series I Class A Preferred Stock convert up to one hundred
percent (100%) of his holdings of Series I Class A Preferred Stock in accordance
with this Part 5.</FONT></P>
<P><FONT size=3>5.3&nbsp;&nbsp;The conversion right granted by Section 5.2
hereof may be exercised only by an Eligible Holder of Series I Class A Preferred
Stock, in whole or in part, by the surrender of the share certificate or share
certificates representing the Series I Class A Preferred Stock to be converted
at the principal office of the Corporation (or at such other place as the
Corporation may designate in a written notice sent to the holder by first class
mail, postage prepaid, at its address shown on the books of the Corporation)
against delivery of that number of whole Common Shares as shall be computed by
dividing (1) the aggregate Value of the Series I Class A Preferred Stock so
surrendered for conversion plus any accrued but unpaid dividends thereon, if
any, by (2) the Conversion Price in effect at the date of the conversion. At the
time of conversion of a share of the Series I Class A Preferred Stock, the
Corporation shall pay in cash to the holder thereof an amount equal to all
unpaid dividends, if any, accrued thereon to the date of conversion, or, at the
Corporation's option, issue that number of whole Common Shares which is equal to
the product of dividing the amount of such unpaid dividends by the Average Stock
Price whether or not declared by the Board. Each Series I Class A Preferred
Stock share certificate surrendered for conversion shall be endorsed by its
holder. In the event of any exercise of the conversion right of the Series I
Class A Preferred Stock granted herein (i) share certificate representing the
Common Shares purchased by virtue of such exercise shall be delivered to such
holder within three (3) days of notice of conversion, and (ii) unless the Series
I Class A Preferred Stock has been fully converted, a new share certificate
representing the Series I Class A Preferred Stock not so converted, if any,
shall also be delivered to</FONT></P>
<P>&nbsp;</P>
<P align=center>-5-</P>
<P>&nbsp;</P>
<P><FONT size=3>such holder within three (3) days of notice of conversion. Any
Eligible Holder may exercise its right to convert the Series I Class A Preferred
Stock by telecopying an executed and completed Notice of Conversion to the
Corporation, and within seventy-two (72) hours thereafter, delivering the
original Notice of Conversion and the certificate representing the Series I
Class A Preferred Stock to the Corporation by express courier. Each date on
which a Notice of Conversion is telecopied to and received by the Corporation in
accordance with the provisions hereof shall be deemed a conversion date. The
Corporation will transmit the Common Shares certificates issuable upon
conversion of any Series I Class A Preferred Stock (together with the
certificates representing the Series I Class A Preferred Stock not so converted)
to the Eligible Holder via express courier within three (3) business days after
the conversion date if the Corporation has received the original Notice of
Conversion and the Series I Class A Shares certificates being so converted by
such date.</FONT></P>
<P><FONT size=3>5.4&nbsp;&nbsp;All Common Shares which may be issued upon
conversion of Series I Class A 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. At all times that any Series I Class A
Preferred Stock is outstanding, the Corporation shall have authorized, and shall
have reserved for the purpose of issuance upon such conversion, a sufficient
number of Common Shares to provide for the conversion into Common Shares of all
Series I Class A Preferred Stock then outstanding at the then effective
Conversion Price. Without limiting the generality of the foregoing, if, at any
time, the Conversion Price is decreased, the number of Common Shares authorized
and reserved for issuance upon the conversion of the Series I Class A Preferred
Stock shall be proportionately increased.&nbsp;</FONT></P>
<P><FONT size=3>5.5&nbsp;&nbsp;The number of Common Shares issued upon
conversion of Series I Class A Preferred Stock and the Conversion Price shall be
subject to adjustment from time to time upon the happening of certain events, as
follows:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5.1&nbsp;&nbsp;Change of
Designation of the Common Shares or the rights, privileges, restrictions and
conditions<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; in respect of the Common Shares or
division of the Common Shares into series. In the case of
any<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; amendment to the Articles to change the
designation of the Common Shares or the rights,
privileges,<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; restrictions or conditions in
respect of the Common Shares or division of the Common Shares into
series<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the rights of the holders of the Series
I Class A Preferred Stock shall be adjusted so as to provide
that<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; upon conversion thereof, the holder of
the Series I Class A Preferred Stock being converted shall<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; procure, in lieu of each Common Share
theretofore issuable upon such conversion, the kind and&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;amount of
shares, other securities, money and property
receivable upon such designation, change&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or division by the holder
of&nbsp;one Common Share issuable upon such
conversion had conversion&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;occurred immediately prior to
such designation, change or division. The
Series I Class A&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock shall be deemed thereafter
to provide for adjustments which shall be as
nearly<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<P>&nbsp;</P>
<P align=center>-6-</P>
<P>&nbsp;</P>
<P><FONT size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; equivalent as may be practicable to the adjustments
provided for in this Part 5.
The provisions&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of this subsection 5.5.1 shall apply in the same manner
to successive reclassifications, changes,<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;consolidations, and mergers.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5.2&nbsp;&nbsp;If the
Corporation, at any time while any of the Series I Class A Preferred Stock is
outstanding,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shall amend the
Articles so as to change the Common Shares into a different number of shares,
the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Conversion Price shall be proportionately
reduced, in case of such change increasing the
number&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Common Shares, as of the
effective date of such increase, or if the Corporation shall take a
record<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of holders of its Common Shares for the
purpose of such increase, as of such record date,
whichever&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is earlier, or the
Conversion Price shall be proportionately increased, in the case of such
change&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;decreasing the number of
Common Shares, as of the effective date of such decrease or, if
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation shall take a record
of holders of its Common Stock for the purpose of such
decrease,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as of such record date,
whichever is earlier.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5.3 If the Corporation, at
any time while any of the Series I Class A Preferred Stock is
outstanding,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shall pay a dividend
payable in Common Shares (except for any dividends of Common
Shares&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payable pursuant to Part 3
hereof), the Conversion Price shall be adjusted, as of the date
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation shall take a record
of the holders of its Common Shares for the purposes of
receiving&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such dividend (or if no
such record is taken, as of the date of payment of such dividend), to
that&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;price determined by
multiplying the Conversion Price therefor in effect by a fraction (1) the
numerator&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of which shall be the
total number of Common Shares outstanding immediately prior to such
dividend,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and (2) the denominator
of which shall be the total number of Common Shares
outstanding&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;immediately after such
dividend (plus in the event that the Corporation paid cash for fractional
shares,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the number of additional
shares which would have been outstanding had the Corporation
issued&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;fractional shares in
connection with said dividend).&nbsp;</FONT></P>
<P><FONT size=3>5.6&nbsp;&nbsp;Whenever the Conversion Price shall be adjusted
pursuant to Section 5.5 hereof, the Corporation shall make a certificate signed
by its President, or a Vice President and by its Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board of Directors made any determination hereunder), and the Conversion Price
after giving effect to such adjustment, and shall cause copies of such
certificates to be mailed (by first class mail, postage prepaid) to each holder
of the Series I Class A</FONT> <FONT size=3>Preferred Stock at its address shown
on the books of the</FONT> <FONT size=3>Corporation. The Corporation shall make
such certificate and mail</FONT> <FONT size=3>it to each such holder promptly
after each adjustment.</FONT></P>
<P><FONT size=3>5.7&nbsp;&nbsp;No fractional Common Shares shall be issued in
connection with any conversion of Series I Class A Preferred Stock, but in lieu
of such fractional shares, the Corporation shall make a cash payment therefor
equal in amount to the product of the applicable fraction multiplied by the
Conversion Price then in effect.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-7-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>5.8&nbsp;&nbsp;No Series I Class A Preferred Stock which has
been converted into Common Shares shall be reissued by the Corporation;
provided, however, that each such share shall be restored to the status of
authorized but unissued Preferred Stock without designation as to series and may
thereafter be issued as a series of Preferred Stock not designated as Series I
Class A Preferred Stock.</FONT></P>
<P><FONT size=3><B><U>Part 6 - Parity with Other Shares of Class A Preferred
Shares.</U></B></FONT></P>
<P><FONT size=3>6.1&nbsp;&nbsp;If any cumulative dividends or accounts payable
or return of capital in respect of Series I Class A 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.</FONT></P>
<P><FONT size=3><B><U>Part 7 - Amendment.</U></B></FONT></P>
<P><FONT size=3>7.1&nbsp;&nbsp;In addition to any requirement for a series vote
pursuant to the GCL in respect of any amendment to the Corporation's Certificate
of Incorporation that adversely affects the rights, privileges, restrictions and
conditions of the Series I Class A Preferred Stock, the rights, privileges,
restrictions and conditions attaching to the Series I Class A Preferred Stock
may be amended by an amendment to the Corporation's Certificate of Incorporation
so as to affect such adversely only if the Corporation has obtained the
affirmative vote at a duly called and held series meeting of the holders of the
Series I Class A Preferred Stock or written consent by the holders of a majority
of the Series I Class A Preferred Stock then outstanding. Notwithstanding the
above, the number of authorized shares of such class or classes of stock may be
increased or decreased (but not below the number of shares thereof outstanding)
by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon, voting as a single class, irrespective of
this Section 7.1.</FONT></P>&nbsp;
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center>-8-</P>
<P align="right">&nbsp;<font size="1">STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 10:45 AM 02/20/1996<br>
</font>&nbsp;&nbsp;&nbsp;<font size="1">960047351 - 2249849</font></P>
<P align=center><FONT size=3>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES 2 CLASS B
CONVERTIBLE PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.</FONT></P><FONT size=3><BR WP="BR2"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental
Services, Inc. (the "Corporation"), a</FONT> <FONT size=3>corporation organized
and existing under the General Corporation</FONT> <FONT size=3>Law of the State
of Delaware, does hereby certify:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2 Class B 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 2 Class B Convertible Preferred Stock as set
forth in the attached resolutions.</FONT></P>
<P><FONT size=3>Dated: February 16, 1996</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL SERVICES, INC.</FONT></P><BR WP="BR1"><BR WP="BR2"><BR
WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>By<U> /s/ Louis F.
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Dr. Louis F.
Centofanti<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Chairman of the Board</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2">ATTEST:</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2"><BR WP="BR1"><U>/s/ Mark A.
Zwecker&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>Mark
A. Zwecker, Secretary</FONT>
<P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><B><FONT size=3>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<BR>(the
"Corporation")<BR><BR>RESOLUTION OF THE BOARD OF DIRECTORS<BR><BR>FIXING THE
NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS
ATTACHING TO THE<BR>SERIES 2 CLASS B CONVERTIBLE PREFERRED
STOCK</FONT></B></P><BR>
<P><FONT size=3><B>WHEREAS,</B></FONT></P>
<P><FONT size=3>A.&nbsp;&nbsp;The Corporation's share capital includes Preferred
Stock, par value $.001 per share ("Preferred<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock"), which Preferred Stock may be issued
in one or more series with the directors of the<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporation
(the "Board") being entitled by resolution to
fix the number of shares in each series&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and to designate
the&nbsp;rights, designations,
preferences, and relative, participating, optional or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other special rights,
privileges, restrictions and conditions
attaching to the shares of each such&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;series; and</FONT></P>
<P><FONT size=3>B.&nbsp;&nbsp;&nbsp;It is in the best interests of the Corporation for
the Board to create a new series from the
Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock designated as the
Series 2 Class B Convertible Preferred Stock, par value</FONT> <FONT
size=3>$.001.</FONT></P>
<P><FONT size=3><B>NOW, THEREFORE, BE IT RESOLVED, THAT:</B></FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Series 2 Class B Convertible
Preferred Stock, par value $.001 (the "Series 2 Class B
Preferred<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock") of the Corporation shall
consist of 2,500 shares and no more and shall be designated as
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series 2 Class B Preferred Stock and
in addition to the preferences, rights, privileges,
restrictions&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and conditions attaching to
all the Series 2 Class B Preferred Stock as a series, the
rights,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;privileges, restrictions and
conditions attaching to the Series 2 Class B Preferred Stock shall
be&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as follows:</FONT></P>
<P><FONT size=3><B><U>Part 1 - Voting and Preemptive Rights.</U></B></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;Except as otherwise provided herein, in the
Corporation's Certificate of Incorporation (the "Articles") or the General
Corporation Law of the State of Delaware (the "GCL"), each holder of Series 2
Class B Preferred Stock, by virtue of his ownership thereof, shall be entitled
to cast that number of votes per share thereof on each matter submitted to the
Corporation's shareholders for voting which equals the number of votes which
could be cast by such holder of the number of shares of the Corporation's Common
Stock, par value $.001 per share (the "Common Shares") into which such shares of
Series 2 Class B Preferred Stock would be entitled to be converted into pursuant
to Part 5 hereof on the record date of such vote. The outstanding Series 2 Class
B Preferred Stock, the Common Shares of the Corporation and any other series of
Preferred Stock of the Corporation having voting rights shall vote together as a
single class, except as otherwise expressly required by the GCL or Part 7
hereof. The Series 2 Class B Preferred Stock shall not have cumulative voting
rights.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>1.2&nbsp;&nbsp;The Series 2 Class B 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.</FONT></P>
<P><FONT size=3><B><U>Part 2 - Liquidation Rights.</U></B></FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;If the Corporation shall be voluntarily or
involuntarily liquidated, dissolved or wound up at any time when any Series 2
Class B Preferred Stock shall be outstanding, the holders of the then
outstanding Series 2 Class B Preferred Stock shall have a preference in
distribution of the Corporation's property available for distribution to the
holders of the Common Shares equal to $1,000 consideration per outstanding share
of Series 2 Class B Preferred Stock, together with an amount equal to all unpaid
dividends accrued thereon, if any, to the date of payment of such distribution,
whether or not declared by the Board; provided, however, that the merger of the
Corporation with any corporation or corporations in which the Corporation is not
the survivor, or the sale or transfer by the Corporation of all or substantially
all of its property, or a reduction by at least seventy percent (70%) of the
then issued and outstanding Common Shares of the Corporation, shall be deemed to
be a liquidation of the Corporation within the meaning of any of the provisions
of this Part 2.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;Subject to the provisions of Part 6 hereof, all
amounts to be paid as preferential distributions to the holders of Series 2
Class B 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
Common Shares, whether now or hereafter authorized, in connection with such
liquidation, dissolution or winding up.</FONT></P>
<P><FONT size=3>2.3&nbsp;&nbsp;After the payment to the holders of the shares of
the Series 2 Class B Preferred Stock of the full preferential amounts provided
for in this Part 2, the holders of the Series 2 Class B Preferred Stock as such
shall have no right or claim to any of the remaining assets of the
Corporation.</FONT></P>
<P><FONT size=3>2.4&nbsp;&nbsp;In the event that the assets of the Corporation
available for distribution to the holders of shares of the Series 2 Class B
Preferred Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be 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 2
Class B Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series 2 Class B Preferred Stock and shares of such other class or series
ranking on a parity with the shares of this Series 2 Class B 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-2-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 3 - Dividends</U></B>.</FONT></P>
<P><FONT size=3>3.1&nbsp;&nbsp;Holders of record of Series 2 Class B Preferred
Stock, out of funds legally available therefor and to the extent permitted by
law, shall be entitled to receive dividends on their Series 2 Class B Preferred
Stock, which dividends shall accrue at the rate per share of five percent (5%)
per annum of consideration paid for each share of Series 2 Class B Preferred
Stock ($50.00 per share per year for each full year) commencing on the date of
the issuance thereof, payable, at the option of the Corporation, (i) in cash, or
(ii) by the issuance of that number of whole Common Shares computed by dividing
the amount of the dividend by the market price applicable to such
dividend.</FONT></P>
<P><FONT size=3>3.2&nbsp;&nbsp;For the purposes of this Part 3 and Part 4
hereof, "market price" means the average of the daily closing prices of Common
Shares for a period of five (5) consecutive trading days ending on the date on
which any dividend becomes payable or of any notice of redemption as the case
may be. The closing price for each trading day shall be (i) for any period
during which the Common Shares shall be listed for trading on a national
securities exchange, the last reported bid price per share of Common Shares as
reported by the primary stock exchange, or the Nasdaq Stock Market, if the
Common Shares are quoted on the Nasdaq Stock Market, or (ii) if last sales price
information is not available, the average closing bid price of Common Shares as
reported by the Nasdaq Stock Market, or if not so listed or reported, then as
reported by National Quotation Bureau, Incorporated, or (iii) in the event
neither clause (i) nor (ii) is applicable, the average of the closing bid and
asked prices as furnished by any member of the National Association of
Securities Dealers, Inc., selected from time to time by the Corporation for that
purpose.</FONT></P>
<P><FONT size=3>3.3&nbsp;&nbsp;Dividends on Series 2 Class B Preferred Stock
shall be</FONT> <FONT size=3>cumulative, and no dividends or other distributions
shall be paid</FONT> <FONT size=3>or declared and set aside for payment on the
Common Shares until</FONT> <FONT size=3>full cumulative dividends on all
outstanding Series 2 Class B</FONT> <FONT size=3>Preferred Stock shall have been
paid or declared and set aside for</FONT> <FONT size=3>payment.</FONT></P>
<P><FONT size=3>3.4&nbsp;&nbsp;Dividends shall be payable in arrears, at the
rate of $12.50</FONT> <FONT size=3>per share for each full calendar quarter on
each February 28, May</FONT> <FONT size=3>31, August 31, and November 30 of each
calendar year, to the</FONT> <FONT size=3>holders of record of the Series 2
Class B Preferred Stock as they</FONT> <FONT size=3>appear in the securities
register of the Corporation on such record</FONT> <FONT size=3>dates not more
than sixty (60) nor less than ten (10) days</FONT> <FONT size=3>preceding the
payment date thereof, as shall be fixed by the Board;</FONT> <FONT
size=3>provided, however, that the initial dividend for the Series 2
Class</FONT> <FONT size=3>B Preferred Stock shall accrue for the period
commencing on the</FONT> <FONT size=3>date of the issuance thereof.</FONT></P>
<P><FONT size=3>3.5&nbsp;&nbsp;If, in any quarter, insufficient funds are
available to pay such dividends as are then due and payable with respect to the
Series 2 Class B Preferred Stock and all other classes and series of the capital
stock of the Corporation ranking in parity therewith (or such payment is
otherwise prohibited by provisions of the GCL, such funds as are legally
available to pay such dividends shall be paid or Common Shares will be issued as
stock dividends to the holders of Series 2 Class B Preferred Stock and to the
holders of any other series of</FONT></P>
<P>&nbsp;</P>
<P align=center>-3-</P>
<P>&nbsp;</P>
<P><FONT size=3>Class B Preferred Stock then outstanding as provided in Part 6
hereof, in accordance with the rights of each such holder, and the balance of
accrued but undeclared and/or unpaid dividends, if any, shall be declared and
paid on the next succeeding dividend date to the extent that funds are then
legally available for such purpose.</FONT></P>
<P><FONT size=3><B><U>Part 4 - Redemption.</U></B></FONT></P>
<P><FONT size=3>4.1&nbsp;&nbsp;At any time, and from time to time, on and after
one hundred twenty (120) days from the date of the issuance of any Series 2
Class B Preferred Stock, if the average of the closing bid prices for the Common
Shares for five (5) consecutive trading days shall be in excess of $1.50 per
share, the Corporation may, at its sole option, but shall not be obligated to,
redeem, in whole or in part, the then outstanding Series 2 Class B Preferred
Stock at a price per share of U. S. $1,000 each (the "Redemption Price") (such
price to be adjusted proportionately in the event of any change of the Series 2
Class B Preferred Stock into a different number of shares of Series 2 Class B
Preferred Stock).</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;Thirty (30) days prior to any date stipulated by
the Corporation for the redemption of Series 2 Class B 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 2 Class B Preferred
Stock. The Redemption Notice shall state: (i) the Redemption Date of such
shares, (ii) the number of Series 2 Class B 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 2
Class B Preferred Stock to be redeemed from such holder, and (iv) instructions
as to how to specify to the Corporation the number of Series 2 Class B Preferred
Stock to be redeemed as provided in this Part 4, and the number of shares to be
converted into Common Shares as provided in Part 5 hereof.</FONT></P>
<P><FONT size=3>4.3&nbsp;&nbsp;Upon receipt of the Redemption Notice, any
Eligible Holder (as defined in Section 5.2 hereof) shall have the option, at its
sole election, to specify what portion of its Series 2 Class B Preferred Stock
called for redemption in the Redemption Notice shall be redeemed as provided in
this Part 4 or converted into Common Shares in the manner provided in Part 5
hereof, except that, notwithstanding any provision of such Part 5 to the
contrary, any Eligible Holder shall have the right to convert into Common Shares
that number of Series 2 Class B Preferred Stock called for redemption in the
Redemption Notice.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;On or before the Redemption Date in respect of
any Series 2 Class B 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 4.5 hereof, to the order of the
person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered share certificate shall be canceled and retired.
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
2</FONT></P>
<P>&nbsp;</P>
<P align=center>-4-</P>
<P>&nbsp;</P>
<P><FONT size=3>Class B Preferred Stock which are not being redeemed to be
registered in the names of the persons whose names appear as the owners on the
respective surrendered share certificates and deliver such certificate to such
person.</FONT></P>
<P><FONT size=3>4.5&nbsp;&nbsp;On the Redemption Date in respect of any Series 2
Class B</FONT> <FONT size=3>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 2 Class B Preferred Stock in respect of which
the Corporation has received notice from the Eligible Holder thereof of its
election to convert Series 2 Class B Preferred Stock in to Common Shares), 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 share 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.</FONT></P>
<P><FONT size=3><B><U>Part 5 - Conversion.</U></B></FONT></P>
<P><FONT size=3>5.1 For the purposes of conversion of the Series 2 Class B
Preferred Stock shall be valued at $1,000 per share ("Value"), and, if
converted, the Series 2 Class B Preferred Stock shall be converted into such
number of Common Shares (the "Conversion Shares") as is obtained by dividing the
aggregate Value of the shares of Series 2 Class B Preferred Stock being so
converted, together with all accrued but unpaid dividends thereon, by the
"Average Stock Price" per share of the Conversion Shares (the "Conversion
Price"), subject to adjustment pursuant to the provisions of this Part 5. For
purposes of this Part 5, the "Average Stock Price" means the lesser of (x)
seventy percent (70%) of the average daily closing bid prices of the Common
Shares for a period of five (5) consecutive trading days immediately preceding
the date of subscription by the Holder or (y) seventy percent (70%) of the
average daily closing bid prices of Common Shares for the period of five (5)
consecutive trading days immediately preceding the date of the conversion of the
Series 2 Class B Preferred Stock in respect of which such Average Stock Price is
determined. The closing price for each trading day shall be determined as
provided in the last sentence of Section 3.2.</FONT></P>
<P><FONT size=3>5.2&nbsp;&nbsp;Any holder of Series 2 Class B Preferred Stock
(an "Eligible Holder") may at any time commencing forty-five (45) days after the
issuance of any Series 2 Class B Preferred Stock convert up to one hundred
percent (100%) of his holdings of Series 2 Class B Preferred Stock in accordance
with this Part 5.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-5-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>5.3&nbsp;&nbsp;The conversion right granted by Section 5.2
hereof may be exercised only by an Eligible Holder of Series 2 Class B Preferred
Stock, in whole or in part, by the surrender of the share certificate or share
certificates representing the Series 2 Class B Preferred Stock to be converted
at the principal office of the Corporation (or at such other place as the
Corporation may designate in a written notice sent to the holder by first class
mail, postage prepaid, at its address shown on the books of the Corporation)
against delivery of that number of whole Common Shares</FONT> <FONT size=3>as
shall be computed by dividing (1) the aggregate Value of the</FONT> <FONT
size=3>Series 2 Class B Preferred Stock so surrendered for conversion
plus</FONT> <FONT size=3>any accrued but unpaid dividends thereon, if any, by
(2) the</FONT> <FONT size=3>Conversion Price in effect at the date of the
conversion. At the</FONT> <FONT size=3>time of conversion of a share of the
Series 2 Class B Preferred Stock, the Corporation shall pay in cash to the
holder thereof an amount equal to all unpaid dividends, if any, accrued thereon
to the date of conversion, or, at the Corporation's option, issue that number of
whole Common Shares which is equal to the product of dividing the amount of such
unpaid dividends by the Average Stock Price whether or not declared by the
Board. Each Series 2 Class B Preferred Stock share certificate surrendered for
conversion shall be endorsed by its holder. In the event of any exercise of the
conversion right of the Series 2 Class B Preferred Stock granted herein (i)
share certificate representing the Common Shares purchased by virtue of such
exercise shall be delivered to such holder within three (3) days of notice of
conversion, and (ii) unless the Series 2 Class B Preferred Stock has been fully
converted, a new share certificate representing the Series 2 Class B Preferred
Stock not so converted, if any, shall also be delivered to such holder within
three (3) days of notice of conversion. Any Eligible Holder may exercise its
right to convert the Series 2 Class B Preferred Stock by telecopying an executed
and completed Notice of Conversion to the Corporation, and within seventy-two
(72) hours thereafter, delivering the original Notice of Conversion and the
certificate representing the Series 2 Class B Preferred Stock to the Corporation
by express courier. Each date on which a Notice of Conversion is telecopied to
and received by the Corporation in accordance with the provisions hereof shall
be deemed a conversion date. The Corporation will transmit the Common Shares
certificates issuable upon conversion of any Series 2 Class B Preferred Stock
(together with the certificates representing the Series 2 Class B Preferred
Stock not so converted) to the Eligible Holder via express courier within three
(3) business days after the conversion date if the Corporation has received the
original Notice of Conversion and the Series 2 Class B Shares certificates being
so converted by such date.</FONT></P>
<P><FONT size=3>5.4&nbsp;&nbsp;All Common Shares which may be issued upon
conversion of Series 2 Class B 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. At all times that any Series 2 Class B
Preferred Stock is outstanding, the Corporation shall have authorized, and shall
have reserved for the purpose of issuance upon such conversion, a sufficient
number of Common Shares to provide for the conversion into Common Shares of all
Series 2 Class B Preferred Stock then outstanding at the then effective
Conversion Price. Without limiting the generality of the foregoing, if, at any
time, the Conversion Price is decreased, the number of Common Shares authorized
and reserved for issuance upon the conversion of the Series 2 Class B Preferred
Stock shall be proportionately increased.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-6-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>5.5&nbsp;&nbsp;The number of Common Shares issued upon
conversion of Series 2 Class B Preferred Stock and the Conversion Price shall be
subject to adjustment from time to time upon the happening of certain events, as
follows:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5.1 In the case of any amendment
to the Articles to change the designation of the Common
Shares&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or the rights, privileges,
restrictions or conditions in respect of the Common Shares or division of
the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Shares into series the rights of the
holders of the Series 2 Class B Preferred Stock shall
be<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;adjusted so as to provide that upon
conversion thereof, the holder of the Series 2 Class B
Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock being converted shall
procure, in lieu of each Common Share theretofore issuable upon
such<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;conversion, the kind and amount of shares,
other securities, money and property receivable upon
such<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;designation, change or division by the
holder of one Common Share issuable upon such
conversion&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;had conversion occurred
immediately prior to such designation, change or division. The Series
2&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class B Preferred Stock shall be deemed
thereafter to provide for adjustments which shall be
as&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;nearly equivalent as may be
practicable to the adjustments provided for in this Part 5. The
provisions&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of this subsection 5.5.1 shall
apply in the same manner to successive reclassifications,
changes,<BR>&nbsp;&nbsp;&nbsp;&nbsp; consolidations, and
mergers.&nbsp;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5.2 If the Corporation, at any
time while any of the Series 2 Class B Preferred Stock is
outstanding,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shall amend the Articles so
as to change the Common Shares into a different number of shares,
the<BR>&nbsp;&nbsp;&nbsp;&nbsp; Conversion Price shall be proportionately
reduced, in case of such change increasing the</FONT> <FONT size=3>number
of<BR>&nbsp;&nbsp;&nbsp;&nbsp; Common Shares, as of the effective date of
such</FONT> <FONT size=3>increase, or if the Corporation shall take a record
of<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;holders of its Common Shares for the purpose
of such increase, as of such record date, whichever
is<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;earlier, or the Conversion Price shall be
proportionately increased, in the case of such
change&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;decreasing the number of Common
Shares, as of the effective date of such decrease or, if
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation shall take a record of
holders of its Common Stock for the purpose of such
decrease,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as of such record date,
whichever is earlier.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5.3 If the Corporation, at any
time while any of the Series 2 Class B Preferred Stock is
outstanding,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shall pay a dividend payable
in Common Shares (except for any dividends of Common
Shares&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payable pursuant to Part 3
hereof), the Conversion Price shall be adjusted, as of the date
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation shall take a record of
the holders of its Common Shares for the purposes of
receiving&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such dividend (or if no such
record is taken, as of the date of payment of such dividend), to that
price<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;determined by multiplying the Conversion
Price therefor in effect by a fraction (1) the numerator
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;which shall be the total number of
Common Shares outstanding immediately prior to such
dividend,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and (2) the denominator of
which shall be the total number of Common Shares
outstanding&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;immediately after such
dividend (plus in the event that the Corporation paid cash for fractional
shares,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the number of additional shares
which would have been outstanding had the Corporation
issued&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;fractional shares in connection
with said dividend).</FONT></P>
<P><FONT size=3>5.6&nbsp;&nbsp;Whenever the Conversion Price shall be adjusted
pursuant to Section 5.5 hereof, the Corporation shall make a certificate signed
by its President, or a Vice President and by its Treasurer, Assistant
Treasurer,</FONT></P>
<P>&nbsp;</P>
<P align=center>-7-</P>
<P>&nbsp;</P>
<P><FONT size=3>Secretary or Assistant Secretary, setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board of Directors made any determination hereunder), and the
Conversion Price after giving effect to such adjustment, and shall cause copies
of such certificates to be mailed (by first class mail, postage prepaid) to each
holder of the Series 2 Class B Preferred Stock at its address shown on the books
of the Corporation. The Corporation shall make such certificate and mail it to
each such holder promptly after each adjustment.&nbsp; <BR WP="BR1"><BR
WP="BR2">5.7&nbsp;&nbsp;No fractional Common Shares shall be issued in
connection with any conversion of Series 2 Class B Preferred Stock, but in lieu
of such fractional shares, the Corporation shall make a cash payment therefor
equal in amount to the product of the applicable fraction multiplied by the
Conversion Price then in effect.</FONT></P>
<P><FONT size=3>5.8 No Series 2 Class B Preferred Stock which has been converted
into Common Shares shall be reissued by the Corporation; provided, however, that
each such share shall be restored to the status of authorized but unissued
Preferred Stock without designation as to series and may thereafter be issued as
a series of Preferred Stock not designated as Series 2 Class B Preferred
Stock.</FONT></P>
<P><U><B><FONT size=3>Part 6 - Parity with Other Shares of Series 2 Class B
Preferred</FONT></B></U><FONT size=3><B><U> Stock and
Priority.</U></B></FONT></P>
<P><FONT size=3>6.1&nbsp;&nbsp;If any cumulative dividends or accounts payable
or return of capital in respect of Series 2 Class B 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.</FONT></P>
<P><FONT size=3>6.2&nbsp;&nbsp;For purposes of this resolution, any stock of any
class or series of the Corporation shall be deemed to rank:&nbsp;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1 Prior or senior to the
shares of this Series 2 Class B Preferred Stock either as to dividends
or&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon liquidation, if the holders of
such class or classes shall be entitled to the receipt of
dividends&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or of amounts distributable
upon dissolution, liquidation or winding up of the Corporation,
whether&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;voluntary or involuntary, as the
case may be, in preference or priority to the holders of shares
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;this Series 2 Class B Preferred
Stock;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2 On a parity with, or equal
to, shares of this Series 2 Class B Preferred Stock, either as
to&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or upon liquidation, whether
or not the dividend rates, dividend payment dates,
or&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;redemption or liquidation prices per
share or sinking fund provisions, if any, are different from
those&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of this Series 2 Class B Preferred
Stock, if the holders of such stock are entitled to the receipt
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or of amounts distributable
upon dissolution, liquidation or winding up of the
Corporation,<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether voluntary or involuntary,
in proportion to their respective dividend rates or
liquidation&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prices, without preference or
priority, one over the other, as between the holders of such stock
and&nbsp;</FONT></P>
<P>&nbsp;</P>
<P align=center>-8-</P>
<P>&nbsp;</P>
<P><FONT size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;over the other, as between the
holders of such stock and the holders of shares of this Series
2&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class B Preferred Stock;
and,</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3 Junior to shares of this
Series 2 Class B Preferred Stock, either as to dividends or
upon&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation, if such class or series
shall be Common Shares or if the holders of shares of this
Series&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 Class B Preferred Stock shall be
entitled to receipt of dividends or of amounts
distributable&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon dissolution,
liquidation or winding up of the Corporation, whether voluntary or
involuntary,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as the case may be, in
preference or priority to the holders of shares of such class or
series.</FONT></P>
<P><FONT size=3><B><U>Part 7 - Amendment.</U></B></FONT></P>
<P><FONT size=3>7.1&nbsp;&nbsp;In addition to any requirement for a series vote
pursuant to</FONT> <FONT size=3>the GCL in respect of any amendment to the
Articles that adversely</FONT> <FONT size=3>affects the rights, privileges,
restrictions and conditions of the</FONT> <FONT size=3>Series 2 Class B
Preferred Stock, the rights, privileges,</FONT> <FONT size=3>restrictions and
conditions attaching to the Series 2 Class B</FONT> <FONT size=3>Preferred Stock
may be amended by an amendment to the Corporation's</FONT> <FONT
size=3>Certificate of Incorporation so as to affect such adversely only if the
Corporation has obtained the affirmative vote at a duly called and held series
meeting of the holders of the Series 2 Class B Preferred Stock or written
consent by the holders of a majority of the Series 2 Class B Preferred Stock
then outstanding. Notwithstanding the above, the number of authorized shares of
such class or classes of stock may be increased or decreased (but not below the
number of shares thereof outstanding) by the affirmative vote of the holders of
a majority of the stock of the Corporation entitled to vote thereon, voting
together as a single class, irrespective of this Section 7.1.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-9-</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;<font size="1">STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 12:30 PM 07/19/1996<br>
</font>&nbsp;&nbsp;&nbsp;<font size="1">960210746 - 2249849</font></P>
<P align=center><FONT size=3><B>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES 3 CLASS
C CONVERTIBLE PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.</B></FONT></P><BR WP="BR2">
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental Services,
Inc. (the "Corporation"), a</FONT> <FONT size=3>corporation organized and
existing under the General Corporation</FONT> <FONT size=3>Law of the State of
Delaware, does hereby certify:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 3 Class C 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 3 Class C Convertible Preferred Stock as set
forth in the attached resolutions.</FONT></P>
<P><FONT size=3>Dated: July 17, 1996</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL SERVICES, INC.</FONT></P><FONT size=3><BR WP="BR1"><BR
WP="BR2"><BR
WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By<U>
/s/ Louis F.
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.
Louis F.
Centofanti<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman
of the Board</FONT>
<P><FONT size=3>ATTEST:</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"><BR
WP="BR1"><U>/s/ Richard T.
Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>Richard
T. Kelecy, Secretary</FONT>
<P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><B><FONT size=3>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<BR>(the
"Corporation")</FONT></B></P>
<P align=center><B><FONT size=3>RESOLUTION OF THE BOARD OF
DIRECTORS<BR><BR>FIXING THE NUMBER AND DESIGNATING THE RIGHTS,
PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS ATTACHING TO THE<BR>SERIES 3 CLASS C
CONVERTIBLE PREFERRED STOCK</FONT></B></P><BR WP="BR2">
<P><FONT size=3><B>WHEREAS,</B></FONT></P>
<P><FONT size=3>A.&nbsp;&nbsp;The Corporation's share capital includes Preferred
Stock, par value $.001 per share
("Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock"), which
Preferred Stock may be issued in one or more series by the Board of
Directors&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the Corporation (the
"Board") being entitled by resolution to fix the number of shares in
each&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;series and to designate the
rights, designations, preferences, and relative, participating,
optional&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or other special rights,
privileges, restrictions and conditions attaching to the shares of each
such&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;series; and</FONT></P>
<P><FONT size=3>B.&nbsp;&nbsp;It is in the best interests of the Corporation for
the Board to create a new series from the
Preferred<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock designated as the Series 3
Class C Convertible Preferred Stock, par value $.001.</FONT></P>
<P><FONT size=3><B>NOW, THEREFORE, BE IT RESOLVED, THAT:</B></FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Series 3 Class C Convertible
Preferred Stock, par value</FONT> <FONT size=3>$.001 (the "Series 3 Class C
Preferred<BR>&nbsp;&nbsp;&nbsp;&nbsp; Stock") of the</FONT> <FONT
size=3>Corporation shall consist of 5,500 shares and no more and</FONT> <FONT
size=3>shall be designated as the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
3 Class C Convertible</FONT> <FONT size=3>Preferred Stock, and the preferences,
rights, privileges,</FONT> <FONT
size=3>restrictions&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and conditions
attaching to the Series 3 Class C</FONT> <FONT size=3>Preferred Stock shall be
as follows:</FONT></P>
<P><FONT size=3><B><U>Part 1 - Voting and Preemptive Rights.</U></B></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;<B><U>Voting Rights</U></B>. Except as otherwise
provided herein, in the Corporation's Certificate of Incorporation (the
"Articles") or the General Corporation Law of the State of Delaware (the "GCL"),
the holders of the Series 3 Class C Preferred Stock shall have no voting rights
whatsoever. To the extent that under the GCL the vote of the holders of the
Series 3 Class C 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 3 Class C 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 3 Class C 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 the GCL the holders of the Series 3 Class C Preferred Stock are
entitled to vote on a matter with holders of Corporation's Common Stock and/or
any other class or series of the Corporation's voting securities, the Series 3
Class C Preferred Stock, the Corporation's Common Stock and all other
classes</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>or series of the Corporation's voting securities shall vote
together as one class, with each share of Series 3 Class C Preferred Stock
entitled to a number of votes equal to the number of shares of the Corporation's
Common Stock into which it is then convertible using the record date for the
taking of such vote of stockholders as the date as of which the Conversion Price
(as defined in Section 4.2 hereof) is calculated and conversion is effected.
Holders of the Series 3 Class C 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.</FONT></P>
<P><FONT size=3>1.2&nbsp;&nbsp;<B><U>No Preemptive Rights</U></B>. The Series 3
Class C 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.</FONT></P>
<P><FONT size=3><B><U>Part 2 - Liquidation Rights.</U></B></FONT></P>
<P><FONT size=3>2.1 <B><U>Liquidation</U></B>. If the Corporation shall be
voluntarily or involuntarily liquidated, dissolved or wound up at any time when
any shares of the Series 3 Class C Preferred Stock shall be</FONT> <FONT
size=3>outstanding, the holders of the then outstanding Series 3 Class C
Preferred Stock shall have a preference in distribution of the Corporation's
property available for distribution to the holders of the Corporation's Common
Stock equal to $1,000 consideration per outstanding share of Series 3 Class C
Preferred Stock, 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.</FONT></P>
<P><FONT size=3>2.2 <B><U>Payment of Liquidation Preferences</U></B>. Subject to
the provisions of Part 6 hereof, all amounts to be paid as Liquidation
Preference to the holders of Series 3 Class C 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.</FONT></P>
<P><FONT size=3>2.3 <B><U>No Rights After Payment</U></B>. After the payment to
the holders of the shares of the Series 3 Class C Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the holders of the
Series 3 Class C Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.</FONT></P>
<P><FONT size=3>2.4 <B><U>Assets Insufficient to Pay Full Liquidation
Preference</U></B>. In the event that the assets of the Corporation available
for distribution to the holders of shares of the Series 3 Class C Preferred
Stock upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be 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 3 Class C
Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series 3 Class C Preferred Stock and shares of such other class or series
ranking on a parity with the shares of this Series 3 Class C 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-2-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 3 - Dividends.</U></B></FONT></P>
<P><FONT size=3>3.1 The holders of the Series 3 Class C Preferred Stock
are</FONT> <FONT size=3>entitled to receive if, when and as declared by the
Board out of</FONT> <FONT size=3>funds legally available therefor, cumulative
dividends, payable in</FONT> <FONT size=3>cash or Common Stock of the
Corporation, par value $.001 per share</FONT> <FONT size=3>(the "Common Stock"),
at the Corporation's election, at the rate of</FONT> <FONT size=3>six percent
(6%) per annum of the Liquidation Value of the Series</FONT> <FONT size=3>3
Class C Preferred Stock. The Liquidation Value of the Series 3 Class C Preferred
Stock shall be $1,000.00 per share (the "Dividend Rate"). 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, 1996 (each, a "Dividend
Declaration Date"). Dividends shall be paid only with respect to shares of
Series 3 Class C Preferred Stock actually issued and outstanding on a Dividend
Declaration Date and to holders of record 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 3 Class C
Preferred Stock. In the event that the Corporation elects to pay dividends in
Common Stock of the Corporation, each holder of the Series 3 Class C Preferred
Stock shall receive shares of Common Stock of the Corporation equal to the
quotient of (i) the Dividend Rate in effect on the applicable Dividend
Declaration Date dividend by (ii) the average of the 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 prior to the Dividend Declaration Date (the "Stock Dividend Price").
Dividends on the Series 3 Class C Preferred Stock shall be cumulative, and no
dividends or other distributions shall be paid or declared or set aside for
payment on the Common Stock until all accrued and unpaid dividends on all
outstanding shares of Series 3 Class C Preferred Stock shall have been paid or
declared and set aside for payment.</FONT></P>
<P><FONT size=3><B><U>Part 4 - Conversion</U></B>. The holders of the Series 3
Class C Preferred Stock shall have rights to convert the shares of Series 3
Class C Preferred Stock into shares of the Corporation's Common Stock, par value
$.001 per share ("Common Stock"), as follows (the "Conversion
Rights"):</FONT></P>
<P><FONT size=3>4.1 <B><U>Right to Convert</U></B>. The Series 3 Class C
Preferred Stock shall be convertible into shares of Common Stock, as
follows:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1&nbsp;&nbsp;Up to one
thousand eight hundred thirty-three (1,833) shares of Series 3 Class C
Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
may be converted at the Conversion Price (as that term is defined in Section 4.2
below)&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;at
any time on or after October 1, 1996;</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-3-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2&nbsp;&nbsp;Up to one
thousand eight hundred thirty-three (1,833) shares of Series 3 Class C
Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
may be converted at the Conversion Price at any time on or after November 1,
1996; and,</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.3&nbsp;&nbsp;Up to one
thousand eight hundred thirty-four (1,834) shares of Series 3 Class C
Preferred&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
may be converted at the Conversion Price on or after December 1,
1996.</FONT></P>
<P><FONT size=3>4.2&nbsp; <B><U>Conversion Price</U></B>. As used herein, the
term Conversion Price shall be the product 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 (ii) seventy-five percent (75%).
Notwithstanding the foregoing, the Conversion Price shall not be (i) less than a
minimum of $.75 per share ("Minimum Conversion Price") or (ii) more than a
maximum of $1.50 per share ("Maximum Conversion Price"). If, after July 1, 1996,
the Corporation sustains a net loss, on a consolidated basis, in each of two (2)
consecutive quarters, as determined under generally accepted accounting
principles, the Minimum Conversion Price shall be reduced $.25 a share, but
there shall be no change to, or reduction of, the Maximum Conversion Price. For
the purpose of determining whether the Corporation has had a net loss in each of
two (2) consecutive quarters, at no time shall a quarter that has already been
considered in such determination be considered in any subsequent determination
(as an example the third quarter of 1996 in which there is a net profit and the
fourth quarter of 1996 in which there is a net loss shall be considered as two
consecutive quarters, and, as a result, the fourth quarter of 1996 shall not be
considered along with the first quarter of 1997 as two (2) consecutive quarters,
but the first quarter of 1997 must be considered with the second quarter of 1997
for the purposes of such determination). For the purposes of this Section 4.2, a
"quarter" is a three (3) month period ending on March 31, June 30, September 30,
and December 31. If any of the outstanding shares of Series 3 Class C 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 3 Class C Preferred Stock</FONT>
<FONT size=3>so surrendered for conversion by (b) the Conversion Price in
effect</FONT> <FONT size=3>at the date of the conversion. At the time of
conversion of shares of the Series 3 Class C 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 product of dividing the amount of such unpaid and accrued dividends to the
date of conversion on the shares of Series 3 Class C Preferred Stock so
converted by the Conversion Price in effect at the date of
conversion.</FONT></P>
<P><FONT size=3>4.3&nbsp;&nbsp;<B><U>Mechanics of Conversion</U></B>. Any holder
of the Series 3 Class C Preferred Stock who wishes to exercise its Conversion
Rights pursuant to Section 4.1 of this Part 4 must, if such shares are not being
held in escrow by the Corporation's attorneys, surrender the certificate
therefor at the principal executive office of&nbsp;</FONT></P>
<P>&nbsp;</P>
<P align=center>-4-</P>
<P>&nbsp;</P>
<P><FONT size=3> the Corporation, and give written notice, which may be via facsimile
transmission, to the Corporation at such office that it elects to convert the
same (the "Conversion Notice"). In the event that the shares of Series 3 Class C
Preferred Stock are being held in escrow by the Corporation's attorneys, no
delivery of the certificates shall be required. No Conversion Notice with
respect to any shares of Series 3 Class C Preferred Stock can be given prior to
the time such shares of Series 3 Class C Preferred Stock are eligible for
conversion in accordance with the provision of Section 4.1 above.&nbsp; Any such
premature Conversion Notice shall automatically be null and void. The
Corporation shall, within five (5) business days after receipt of an appropriate
and timely Conversion Notice (and certificate, if necessary), issue to such
holder of Series 3 Class C 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 3 Class C 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 3 Class
C Preferred Stock to be converted have been surrendered and the Conversion
Notice is received by the Corporation (or in the event that no surrender of the
Certificate is required, then only upon the receipt by the Corporation of the
Conversion Notice) (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. If the Corporation
fails to deliver to the holder or its agent the certificate representing the
shares of Common Stock that the holder is entitled to receive as a result of
such conversion within five (5) business days after receipt by the Corporation
from the holder of an appropriate and timely Conversion Notice and certificates
pursuant to the terms of this Section 4.3, the Corporation shall pay to the
holder U.S. $1,000 for each day that the Corporation is late in delivering such
certificate to the holder or its agent.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;<B><U>Adjustments to Conversion Price for Stock
Dividends and for Combinations or Subdivisions of Common Stock</U></B>. If the
Corporation at any time or from time to time while shares of Series 3 Class C
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. If the Corporation shall
declare or pay, without consideration, any dividend on the Common Stock payable
in any right to acquire Common stock for no consideration, then the Corporation
shall be deemed to have made a</FONT></P>
<P>&nbsp;</P>
<P align=center>-5-</P>
<P>&nbsp;</P>
<P><FONT size=3>dividend payable in Common Stock in an amount of shares equal to
the maximum number of shares issuable upon exercise of such rights to acquire
Common Stock.</FONT></P>
<P><FONT size=3>4.5.&nbsp;&nbsp;<U><B>Adjustments for Reclassification and
Reorganization</B></U>. If the Common Stock issuable upon conversion of the
Series 3 Class C 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 3 Class C
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 3 Class C 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
3 Class C Preferred Stock immediately before that change.</FONT></P>
<P><FONT size=3>4.6&nbsp;&nbsp;<B><U>Common Stock Duly Issued</U></B>. All
Common Stock which may be issued upon conversion of Series 3 Class C 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.</FONT></P>
<P><FONT size=3>4.7&nbsp;&nbsp;<B><U>Notice of Adjustments</U></B>. 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 3 Class C Preferred
Stock a notice setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment is based.</FONT></P>
<P><FONT size=3>4.8&nbsp;&nbsp;<B><U>Issue Taxes</U></B>. The Corporation shall
pay any and all issue and</FONT> <FONT size=3>other taxes that may be payable in
respect of any issue or delivery</FONT> <FONT size=3>of shares of Common Stock
on conversion of the Series 3 Class C</FONT> <FONT size=3>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 3 Class C Preferred Stock in connection with such conversion.</FONT></P>
<P><FONT size=3>4.9&nbsp;&nbsp;<B><U>Reservation of Stock Issuable Upon
Conversion</U></B>. 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 3 Class C
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 3 Class C 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 3 Class C 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-6-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>4.10&nbsp;&nbsp;<B><U>Fractional Shares</U></B>. No fractional
share shall be issued upon the conversion of any share or shares of Series 3
Class C Preferred Stock. All shares of Common Stock (including fractions
thereof) issuable upon conversion of more than one share of Series 3 Class C
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.</FONT></P>
<P><FONT size=3>4.11 <B><U>Notices</U></B>. Any notices required by the
provisions of this Part 4 to be given to the holders of shares of Series 3 Class
C 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.</FONT></P>
<P><FONT size=3>4.12 <B><U>Business Day</U></B>. 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
permitted to close.</FONT></P>
<P><FONT size=3><B><U>Part 5 - Redemption</U></B>.</FONT></P>
<P><FONT size=3>5.1 <B><U>Redemption During First 180 Days</U></B>. At any time,
and from time to time, during the first one hundred eighty (180) days from the
date of issuance of the Series 3 Class C Preferred Stock, the Corporation may,
at its sole option, but shall not be obligated to, redeem, in whole or in part,
the then outstanding Series 3 Class C Preferred Stock at a price per share of U.
S. $1,300.00 each ("First Six Months Redemption Price"). The Company may
exercise such redemption by giving the holder of the Series 3 Class C Preferred
Stock written notice of such redemption at any time during such 180-day
period.</FONT></P>
<P><FONT size=3>5.2&nbsp;&nbsp;<B><U>Other Rights of Redemption by the
Corporation</U></B>. At any time, and from time to time, after one hundred
eighty (180) days from the date of the issuance of any Series 3 Class C
Preferred Stock, if the average of the closing bid price of the Common Stock for
ten (10) consecutive days shall be in excess of $2.50 per share, the Corporation
may, at its sole option, but shall not be obligated to, redeem, in whole or in
part, the then outstanding Series 3 Class C Preferred Stock at a price per share
of U. S. $1,000 each (the "Redemption Price") (such price to be adjusted
proportionately in the event of any change of the Series 3 Class C Preferred
Stock into a different number of shares of Series 3 Class C Preferred
Stock).</FONT></P>
<P><FONT size=3>5.3 <B><U>Mechanics of Redemption</U></B>. Thirty (30) days
prior to any date</FONT> <FONT size=3>stipulated by the Corporation for the
redemption of Series 3 Class C 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 3 Class C Preferred Stock. The Redemption Notice
shall state: (i) the Redemption Date of such shares, (ii) the number of Series 3
Class C 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 3 Class C Preferred Stock to be redeemed from
such</FONT></P>
<P>&nbsp;</P>
<P align=center>-7-</P>
<P>&nbsp;</P>
<P><FONT size=3>holder, and (iv) instructions as to how to specify to the
Corporation the number of Series 3 Class C Preferred Stock to be redeemed as
provided in this Part 5 and, if the Redemption Notice is mailed to the Holder
after the first one hundred eighty (180) days from the date of issuance of the
Series 3 Class C Preferred Stock, the number of shares to be converted into
Common Stock as provided in Part 4 hereof.</FONT></P>
<P><FONT size=3>5.4 <B><U>Rights of Conversion Upon Redemption</U></B>. If the
redemption occurs pursuant to Section 5.1 hereof, the Holder of the Series 3
Class C Preferred Stock shall not have the right to convert those outstanding
shares of Series 3 Class C Preferred Stock that the Company is redeeming after
receipt of the Redemption Notice. If the redemption occurs pursuant to Section
5.2 hereof, then, upon receipt of the Redemption Notice, any holder of Series 3
Class C Preferred Stock shall have the option, at its sole election, to specify
what portion of its Series 3 Class C 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, except that,
notwithstanding any provision of such Part 4 to the contrary, such holder shall
have the right to convert into Common Stock that number of Series 3 Class C
Preferred Stock called for redemption in the Redemption Notice.</FONT></P>
<P><FONT size=3>5.5&nbsp;&nbsp;<U><B>Surrender of Certificates</B></U>. On or
before the Redemption Date in respect of any Series 3 Class C 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 5.5 hereof, to the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered share
certificate shall be canceled and retired. 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 3 Class C 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.</FONT></P>
<P><FONT size=3>5.6</FONT>&nbsp;&nbsp;<FONT size=3><B><U>Payment</U></B>. On the
Redemption Date in respect of any Series 3 Class C 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 First Six Months Redemption Price or the Redemption Price,
whichever is applicable, of all such shares called from redemption (less the
aggregate Redemption Price for those Series 3 Class C Preferred Stock in respect
of which the Corporation has received notice from the holder thereof of its
election to convert Series 3 Class C 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 First Six Months Redemption Price or the
Redemption Price, whichever is applicable, 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</FONT></P>
<P>&nbsp;</P>
<P align=center>-8-</P>
<P>&nbsp;</P>
<P><FONT size=3>First Six Months Redemption Price or the Redemption Price,
whichever is applicable, 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 First Six Months Redemption Price or
the Redemption Price, whichever is applicable, in respect of their shares only
from the Corporation.</FONT></P>
<P><FONT size=3><B><U>Part 6 - Parity with Other Shares of Series 3 Class C
Preferred Stock and Priority</U></B>.</FONT></P>
<P><FONT size=3>6.1&nbsp;&nbsp;<B><U>Rateable Participation</U></B>. If any
cumulative dividends or return of capital in respect of Series 3 Class C
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.</FONT></P>
<P><FONT size=3>6.2&nbsp;&nbsp;<B><U>Ranking</U></B>. For purposes of this
resolution, any stock of any class or series of the Corporation shall be deemed
to rank:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;Prior or
senior to the shares of this Series 3 Class C Preferred Stock either as to
dividends&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
upon liquidation, if the holders of such class or classes shall be entitled to
the receipt
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or of amounts distributable upon dissolution, liquidation or winding up of
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation,
whether voluntary or involuntary, as the case may be, in preference or
priority&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the holders of shares of this Series 3 Class C Preferred Stock;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;On a parity with,
or equal to, shares of this Series 3 Class C Preferred Stock, either as
to&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or upon liquidation, whether or not the dividend rates, dividend payment dates,
or<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;redemption
or liquidation prices per share or sinking fund provisions, if any, are
different
from&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;those
of this Series 3 Class C Preferred Stock, if the holders of such stock are
entitled to
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;receipt
of dividends or of amounts distributable upon dissolution, liquidation or
winding up of
the<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation,
whether voluntary or involuntary, in proportion to their respective dividend
rates
or<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation
prices, without preference or priority, one over the other, as between the
holders
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
stock and over the other, as between the holders of such stock and the holders
of
shares&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
this Series 3 Class C Preferred Stock; and,</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;Junior to shares
of this Series 3 Class C Preferred Stock, either as to dividends or
upon&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation,
if such class or series shall be Common Stock or if the holders of shares of
this&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
3 Class C Preferred Stock shall be entitled to receipt of dividends or of
amounts&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;distributable
upon dissolution, liquidation or winding up of the Corporation, whether
voluntary<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
involuntary, as the case may be, in preference or priority to the holders of
shares of
such&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;class
or series.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-9-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 7 - Amendment and Reissue.</U></B></FONT></P>
<P><FONT size=3>7.1&nbsp;&nbsp;<U><B>Amendment</B></U>. If any proposed
amendment to the Corporation's Certificate of Incorporation would alter or
change the powers, preferences or special rights of the Series 3 Class C
Preferred Stock so as to affect such adversely, then the Corporation must obtain
the affirmative vote of such amendment to the Certificate of Incorporation at a
duly called and held series meeting of the holders of the Series 3 Class C
Preferred Stock or written consent by the holders of a majority of the Series 3
Class C Preferred Stock then outstanding. Notwithstanding the above, the number
of authorized shares of any class or classes of stock may be increased or
decreased (but not below the number of shares thereof outstanding) by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote thereon, voting together as a single class, irrespective of
this Section 7.1 or the requirements of Section 242 of the GCL.</FONT></P>
<P><FONT size=3>7.2&nbsp;&nbsp;<B><U>Authorized</U></B>. Any shares of Series 3
Class C Preferred Stock</FONT>&nbsp;<FONT size=3>acquired by the Corporation by
reason of purchase, conversion,</FONT> <FONT size=3>redemption or otherwise
shall be retired and shall become</FONT> <FONT size=3>authorized but unissued
shares of Preferred Stock, which may be</FONT> <FONT size=3>reissued as part of
a new series of Preferred Stock hereafter</FONT> <FONT
size=3>created.</FONT></P>&nbsp;
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-10-</FONT></P>
<P align=left><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 04:30 PM 12/16/1996<br>
&nbsp;&nbsp;&nbsp;960370787 - 2249849</font>&nbsp;</P>
<P align=center><FONT size=3><B>CERTIFICATE OF ELIMINATION<BR>OF<BR>SERIES I
CLASS A PREFERRED STOCK<BR>AND<BR>SERIES 2 CLASS B CONVERTIBLE PREFERRED
STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.<BR></B>____________________________________________</FONT></P><FONT
size=3><BR WP="BR1"></FONT>
<P align=left><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a corporation</FONT> <FONT size=3>organized and existing under
the Delaware General Corporation Law</FONT> <FONT size=3>of the State of
Delaware (hereinafter called the "Corporation"),</FONT> <FONT size=3>hereby
certifies the following:</FONT>&nbsp;<FONT
size=3><BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;That the Certificate
of Designations of Series I Class A</FONT> <FONT size=3>Preferred Stock of the
Corporation (the "Series I Preferred") was</FONT> <FONT size=3>filed on February
6, 1996 (the "Series I Certificate of</FONT> <FONT
size=3>Designations").<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;That
all outstanding shares of the Series I Preferred have been converted into shares
of common stock of the Company pursuant to the terms and conditions of the
Series I Certificate of Designations.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;That no shares of
Series I Preferred remain
outstanding.<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;That all shares
of the Series I Preferred which have been converted have the status of
authorized and unissued shares of the Preferred Stock of the Corporation without
designation as to series, until such shares are once more designated as part of
a particular series by the Board of Directors.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. That on September 19, 1996, the
Board of Directors of the company duly adopted the following
resolution:</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED,
that no authorized shares of Series</FONT> <FONT size=3>I Class A Preferred
Stock remain
outstanding<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size=3>and no shares of Series I Class A Preferred</FONT> <FONT
size=3>Stock will be issued subject to the</FONT> <FONT size=3>Certificate
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designation
previously filed</FONT> <FONT size=3>with respect to the Series I Class A
Preferred</FONT> <FONT size=3>Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;That the Certificate
of Designations of the Series 2 Class B Convertible Preferred Stock of the
Corporation (the "Series 2 Preferred") was filed on February 20, 1996 (the
"Series 2 Certificate of Designations").</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;That all outstanding
shares of the Series 2 Preferred have been converted into shares of common stock
of the Company pursuant to the terms and conditions of the Series 2 Certificate
of Designations.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. That no shares of Series 2
Preferred remain outstanding.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;That all shares of
the Series 2 Preferred which have been</FONT> <FONT size=3>converted have the
status of authorized and unissued shares of the</FONT> <FONT size=3>Preferred
Stock of the Corporation without designation as to</FONT> <FONT size=3>series,
until such shares are once more designated as part of a</FONT> <FONT
size=3>particular series by the Board of Directors.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp; That on September 19,
1996, the Board of Directors of the</FONT> <FONT size=3>company duly adopted the
following resolution:</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED,
that no authorized shares of Series</FONT> <FONT size=3>2 Class B Preferred
Stock remain
outstanding<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>and no shares of Series 2 Class B Convertible</FONT> <FONT
size=3>Preferred Stock will be issued subject to the</FONT>&nbsp;<FONT
size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificate
of Designation previously filed</FONT> <FONT size=3>with respect to the Series 2
Class B</FONT> <FONT
size=3>Convertible&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;That pursuant to
the provisions of Section 151(g) of the</FONT> <FONT size=3>Delaware General
Corporation Law, upon the effective date of the</FONT> <FONT size=3>filing of
this Certificate, this Certificate will have the effect</FONT> <FONT size=3>of
eliminating from the Restated Certificate of Incorporation only</FONT> <FONT
size=3>those matters set forth in the Restated Certificate of</FONT> <FONT
size=3>Incorporation with respect to the Series I Class A Preferred Stock</FONT>
<FONT size=3>and the Series 2 Class B Convertible Preferred Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, this
Certificate of Elimination has been executed this 4th day of December, 1996, by
the President of the Company.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL<BR>ATTEST:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SERVICES,
INC.</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"><BR WP="BR1"><U>/s/
Richard T. Kelecy
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;By <U>/s/ Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>Richard
T. Kelecy,
Secretary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Dr. Louis F.
Centofanti,<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>President</FONT>
<P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-2-</FONT></P>
<P>&nbsp;</P>
<P><font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 04:30 PM 01/06/1997<br>
&nbsp;&nbsp;&nbsp;971005393 - 2249849</font>&nbsp;</P>
<P align=center><FONT size=3><B>CERTIFICATE OF AMENDMENT<BR>OF<BR>RESTATED
CERTIFICATE OF INCORPORATION<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.<BR>___________________________________________</B></FONT></P><FONT
size=3><BR WP="BR1"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental Services,
Inc., a Delaware</FONT> <FONT size=3>corporation (the "Corporation"), for
purposes of amending its</FONT> <FONT size=3>Restated Certificate of
Incorporation, as amended ("Restated</FONT> <FONT size=3>Certificate of
Incorporation"), as provided by Section 242 of the</FONT> <FONT size=3>Delaware
General Corporation Law, does hereby certify:</FONT>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;The amendment set
forth below to the Corporation's</FONT> <FONT size=3>Restated Certificate of
Incorporation was duly adopted in</FONT> <FONT size=3>accordance with the
provisions of Section 242 of the General</FONT> <FONT size=3>Corporation Law of
the State of Delaware:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
first paragraph of Article Fourth of the</FONT> <FONT size=3>Corporation's
Restated Certificate of Incorporation is hereby</FONT> <FONT size=3>deleted and
replaced in its entirety by the following:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
total number of shares of capital stock that the Corporation shall have
authority to
issue<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is
52,000,000, of which 50,000,000 shall be designated as common stock of the par
value&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
$.001 per share ("Common Stock") and 2,000,000 shall be designated as preferred
stock<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the par
value of $.001 per share ("Preferred Stock").</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;Only the first
paragraph of Article Fourth is amended by</FONT> <FONT size=3>this Amendment,
and the remainder of Article Fourth shall remain in</FONT> <FONT size=3>full
force and effect. No other provision, paragraph or article of</FONT> <FONT
size=3>the Restated Certificate of Incorporation is amended or changed by</FONT>
<FONT size=3>this Amendment. The Restated Certificate of Incorporation,
as</FONT> <FONT size=3>expressly amended by paragraph 1 of this Amendment, shall
be in</FONT> <FONT size=3>full force and effect.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;At a meeting of the
Board of Directors held on the 19th</FONT> <FONT size=3>day of September, 1996,
a resolution was duly adopted setting forth</FONT> <FONT size=3>the foregoing
proposed amendment to the first paragraph of Article</FONT> <FONT size=3>Fourth
of the Restated Certificate of Incorporation, declaring such</FONT> <FONT
size=3>amendment to be advisable and setting the next Annual Meeting of</FONT>
<FONT size=3>Stockholders for consideration thereof.</FONT></P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;Thereafter, pursuant to said
resolution of its Board of</FONT> <FONT size=3>Directors, the Annual Meeting of
Stockholders was duly called and</FONT> <FONT size=3>held on December 12, 1996,
at which meeting the necessary number of</FONT> <FONT size=3>shares as required
by statute were voted in favor of such</FONT> <FONT size=3>amendment.</FONT>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS whereof, Perma-Fix
Environmental Services,</FONT> <FONT size=3>Inc. has caused this Certificate to
be signed and attested to by</FONT> <FONT size=3>its duly authorized officers as
of this 16th day of December, 1996.</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix
Environmental<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>Services,
Inc.,<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>a Delaware
corporation</FONT></P><FONT size=3><BR
WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <U>/s/Louis F.
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Dr. Louis F.
Centofanti<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President
and<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Chief Executive Officer<BR><BR>ATTEST:</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2"><U>/s/ Richard T.
Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>Richard
T. Kelecy,<BR>Secretary</FONT>
<P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center>-2-</P>
<P>&nbsp;<font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 11:00 AM 06/11/1997<br>
&nbsp;&nbsp;&nbsp;971190682 - 2249849</font>&nbsp;</P>
<P align=center><FONT size=3><B>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES 4 CLASS
D CONVERTIBLE PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.</B></FONT></P><BR WP="BR2">
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental Services,
Inc. (the "Corporation"), a corporation organized and existing under the General
Corporation</FONT> <FONT size=3>Law of the State of Delaware, does hereby
certify:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 4 Class D 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 4 Class D Convertible Preferred Stock as set
forth in the attached resolutions.</FONT></P>
<P><FONT size=3>Dated: June 9,
1997&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>SERVICES, INC.</FONT></P><FONT size=3><BR
WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
<U>/s/ Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F.
Centofanti<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>Chairman of the Board</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2">ATTEST:</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2"><U>/s/ Richard T.
Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>Richard
T. Kelecy, Secretary</FONT>
<P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3><B>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<BR>(the
"Corporation")<BR><BR>RESOLUTION OF THE BOARD OF DIRECTORS<BR><BR>FIXING THE
NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS
ATTACHING TO THE<BR>SERIES 4 CLASS C CONVERTIBLE PREFERRED
STOCK</B></FONT></P><FONT size=3><BR WP="BR2"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the
Corporation's capital includes preferred stock,</FONT> <FONT size=3>par value
$.001 per share ("Preferred Stock"), which Preferred</FONT> <FONT size=3>Stock
may be issued in one or more series by resolutions adopted by</FONT> <FONT
size=3>the directors, and with the directors being entitled by resolution</FONT>
<FONT size=3>to fix the number of shares in each series and to designate
the</FONT> <FONT size=3>rights, designations, preferences and relative,
participating,</FONT> <FONT size=3>optional or other special rights and
privileges, restrictions and</FONT> <FONT size=3>conditions attaching to the
shares of each such series;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>it is in the best
interests of the Corporation for</FONT> <FONT size=3>the Board to create a new
series from the Preferred Stock</FONT> <FONT size=3>designated as the Series 4
Class D Convertible Preferred Stock, par</FONT> <FONT size=3>value $.001 per
share ("Series 4 Class D Preferred
Stock");<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, BE IT
RESOLVED</B>, that the Series 4 Class D Convertible Preferred Stock, par value
$.001 (the "Series 4 Class D Preferred Stock") of the Corporation shall consist
of two thousand five hundred (2,500) shares and no more and shall be designated
as the Series 4 Class D Convertible Preferred Stock, and the preferences,
rights, privileges, restrictions and conditions attaching to the Series 4 Class
D Preferred Stock shall be as follows:</FONT></P>
<P><FONT size=3><B><U>Part 1 - Voting and Preemptive Rights.</U></B></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;<U><B>Voting Rights</B></U>. Except as otherwise
provided in Part 7 hereof</FONT> <FONT size=3>or under the General Corporation
Law of the State of Delaware (the</FONT> <FONT size=3>"GCL"), the holders of the
Series 4 Class D Preferred Stock shall</FONT> <FONT size=3>have no voting rights
whatsoever. To the extent that under Part 7 hereof or the GCL the vote of the
holders of the Series 4 Class D 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 4 Class D 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 4 Class D 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 the GCL or Part 7 hereof, the holders of
the Series 4 Class D Preferred Stock are entitled to vote on a matter, each
share of the Series 4 Class D Preferred Stock shall be entitled one (1) vote for
each outstanding share of Series 4 Class D Preferred Stock. Holders of the
Series 4 Class D Preferred Stock shall be entitled to notice of (and copies of
proxy materials and other information sent to stockholders) for all shareholder
meetings or</FONT></P>
<P>&nbsp;</P>
<P align=center>-2-</P>
<P>&nbsp;</P>
<P><FONT size=3>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.</FONT></P>
<P><FONT size=3>1.2&nbsp;&nbsp;<B><U>No Preemptive Rights</U></B>. The Series 4
Class D Preferred Stock</FONT> <FONT size=3>shall not give its holders any
preemptive rights to acquire any</FONT> <FONT size=3>other securities issued by
the Corporation at any time in the</FONT> <FONT size=3>future.</FONT></P>
<P><FONT size=3><B><U>Part 2 - Liquidation Rights.</U></B></FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;<B><U>Liquidation</U></B>. If the Corporation
shall be voluntarily or</FONT> <FONT size=3>involuntarily liquidated, dissolved
or wound up at any time when</FONT> <FONT size=3>any shares of the Series 4
Class D Preferred Stock shall be</FONT> <FONT size=3>outstanding, the holders of
the then outstanding Series 4 Class D</FONT> <FONT size=3>Preferred Stock shall
have a preference in distribution of the</FONT> <FONT size=3>Corporation's
property available for distribution to the holders of</FONT> <FONT size=3>the
Corporation's Common Stock equal to $1,000 consideration per</FONT> <FONT
size=3>outstanding share of Series 4 Class D Preferred Stock, plus an</FONT>
<FONT size=3>amount equal to all unpaid dividends accrued thereon to the date
of</FONT> <FONT size=3>payment of such distribution ("Liquidation Preference"),
whether or</FONT> <FONT size=3>not declared by the Board.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;<B><U>Payment of Liquidation Preferences</U></B>.
Subject to the provisions</FONT> <FONT size=3>of Part 6 hereof, all amounts to
be paid as Liquidation Preference</FONT> <FONT size=3>to the holders of Series 4
Class D Preferred Stock, as provided in</FONT> <FONT size=3>this Part 2, shall
be paid or set apart for payment before the</FONT> <FONT size=3>payment or
setting apart for payment of any amount for, or the</FONT> <FONT
size=3>distribution of any of the Corporation's property to the holders
of</FONT> <FONT size=3>the Corporation's Common Stock, whether now or
hereafter</FONT> <FONT size=3>authorized, in connection with such liquidation,
dissolution or</FONT> <FONT size=3>winding up.</FONT></P>
<P><FONT size=3>2.3 <B><U>No Rights After Payment</U></B>. After the payment to
the holders of</FONT> <FONT size=3>the shares of the Series 4 Class D Preferred
Stock of the full</FONT> <FONT size=3>Liquidation Preference amounts provided
for in this Part 2, the</FONT> <FONT size=3>holders of the Series 4 Class D
Preferred Stock as such shall have</FONT> <FONT size=3>no right or claim to any
of the remaining assets of the</FONT> <FONT size=3>Corporation.</FONT></P>
<P><FONT size=3>2.4&nbsp;&nbsp;<B><U>Assets Insufficient to Pay Full Liquidation
Preference</U></B>. In the event that the assets of the Corporation available
for distribution to the holders of shares of the Series 4 Class D Preferred
Stock upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be 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 4 Class D
Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series 4 Class D Preferred Stock and shares of such other class or series
ranking on a parity with the shares of this Series 4 Class D 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-3-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 3 - Dividends</U></B>.</FONT></P>
<P><FONT size=3>3.1&nbsp;&nbsp;The holders of the Series 4 Class D Preferred
Stock are entitled to receive if, when and as declared by the Board out of funds
legally available therefor, cumulative 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 4 Class D Preferred Stock (the "Dividend Rate"). The
Liquidation Value of the Series 4 Class D Preferred Stock shall be $1,000 per
outstanding share of the Series 4 Class D 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 4 Class D Preferred Stock actually issued and outstanding on
a Dividend Declaration Date and to holders of record of the Series 4 Class D
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 4 Class D 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 4 Class D 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 4 Class D 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 4 Class D
Preferred Stock shall have been paid or declared and set aside for
payment.</FONT></P>
<P><FONT size=3><B><U>Part 4 - Conversion</U></B>. The holders of the Series 4
Class D Preferred Stock shall have rights to convert the shares of Series 4
Class D Preferred Stock into shares of the Corporation's Common Stock, par value
$.001 per share ("Common Stock"), as follows (the "Conversion
Rights"):</FONT></P>
<P><FONT size=3>4.1&nbsp;&nbsp;<B><U>Right to Convert</U></B>. The Series 4
Class D Preferred Stock shall</FONT> <FONT size=3>be convertible into shares of
Common Stock, as follows:</FONT>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>4.1.1&nbsp;&nbsp;Up to one
thousand two hundred fifty (1,250) shares</FONT> <FONT size=3>of Series 4 Class
D Preferred Stock
may&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;be</FONT>
<FONT size=3>converted at the Conversion Price (as that term is</FONT> <FONT
size=3>defined in Section 4.2 below) at any
time&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on
or</FONT> <FONT size=3>after October 5, 1997; and,</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-4-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2&nbsp;&nbsp;Up to an
additional one thousand two hundred fifty</FONT> <FONT size=3>(1,250) shares of
Series 4 Class
D&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
Stock</FONT> <FONT size=3>may be converted at the Conversion Price at any</FONT>
<FONT size=3>time on or after November
5,<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1997.</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;<B><U>Conversion Price</U></B>. Subject to the
terms hereof, as used</FONT> <FONT size=3>herein, the term Conversion Price per
outstanding share of</FONT> <FONT size=3>Series 4 Class D Preferred Stock shall
be the product of the</FONT> <FONT size=3>lesser of (i) the average closing bid
quotation of the Common</FONT> <FONT size=3>Stock as reported on the
over-the-counter market, or the</FONT> <FONT size=3>closing sale price if listed
on a national securities</FONT> <FONT size=3>exchange, for the five (5) trading
days immediately preceding</FONT> <FONT size=3>the date of the Conversion Notice
referred to in Section 4.3</FONT> <FONT size=3>below multiplied by eighty
percent (80%) or (ii) U.S. $1.6875.</FONT> <FONT size=3>Notwithstanding the
foregoing, the Conversion Price shall not</FONT> <FONT size=3>be less than a
minimum of $.75 per share ("Minimum Conversion</FONT> <FONT size=3>Price"),
which Minimum Conversion Price shall be eliminated</FONT> <FONT size=3>from and
after September 6, 1998. If any of the outstanding</FONT> <FONT size=3>shares of
Series 4 Class D Preferred Stock are converted, in</FONT> <FONT size=3>whole or
in part, into Common Stock pursuant to the terms of</FONT> <FONT size=3>this
Part 4, the number of shares of whole Common Stock to be</FONT> <FONT
size=3>issued to the holder as a result of such conversion shall be</FONT> <FONT
size=3>determined by dividing (a) the aggregate Liquidation Value of</FONT>
<FONT size=3>the Series 4 Class D Preferred Stock so surrendered for</FONT>
<FONT size=3>conversion by (b) the Conversion Price in effect at the date</FONT>
<FONT size=3>of the conversion. At the time of conversion of shares of
the</FONT> <FONT size=3>Series 4 Class D Preferred Stock, the Corporation shall
pay in</FONT> <FONT size=3>cash to the holder thereof an amount equal to all
unpaid and</FONT> <FONT size=3>accrued dividends, if any, accrued thereon to the
date of</FONT> <FONT size=3>conversion, or, at the Corporation's option, in lieu
of paying</FONT> <FONT size=3>cash for the accrued and unpaid dividends, issue
that number</FONT> <FONT size=3>of shares of whole Common Stock which is equal
to the quotient</FONT> <FONT size=3>of the amount of such unpaid and accrued
dividends to the date</FONT> <FONT size=3>of conversion on the shares of Series
4 Class D Preferred</FONT> <FONT size=3>Stock so converted divided by the Stock
Dividend Price, as</FONT> <FONT size=3>defined in Section 3.1 hereof, in effect
at the date of</FONT> <FONT size=3>conversion.</FONT></P>
<P><FONT size=3>4.3 <U><B>Mechanics of Conversion</B></U>. Any holder of the
Series 4 Class D Preferred Stock who wishes to exercise its Conversion Rights
pursuant to Section 4.1 of this Part 4 must, if such shares are not being held
in escrow by the Corporation's attorneys, surrender the certificate therefor at
the principal executive office of the Corporation, and give written notice,
which may be via facsimile transmission, to the Corporation at such office that
it elects to convert the same (the "Conversion Notice"). In the event that the
shares of Series 4 Class D Preferred Stock are being held in escrow by the
Corporation's attorneys, no delivery of the certificates shall be required. No
Conversion Notice with respect to any shares of Series 4 Class D Preferred Stock
can be given prior to the time such shares of Series 4 Class D Preferred Stock
are eligible for</FONT> <FONT size=3>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 five (5) business days after receipt of an appropriate and timely
Conversion Notice (and certificate, if necessary), issue to such holder of
Series 4 Class D 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</FONT></P>
<P>&nbsp;</P>
<P align=center>-5-</P>
<P>&nbsp;</P>
<P><FONT size=3>the contrary, all shares of Common Stock issuable upon
conversion of the Series 4 Class D 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 4 Class D Preferred Stock to be converted have been surrendered and the
Conversion Notice is received by the Corporation (or in the event that no
surrender of the Certificate is required, then only upon the receipt by the
Corporation of the Conversion Notice) (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. If
the Corporation fails to deliver to the holder or its agent the certificate
representing the shares of Common Stock that the holder is entitled to receive
as a result of such conversion within seven (7) business days after receipt by
the Corporation from the holder of an appropriate and timely Conversion Notice
and certificates pursuant to the terms of this Section 4.3 ("Seven (7) Business
Day Period"), then, upon the written demand of RBB Bank Aktiengesellschaft ("RBB
Bank"), the holder of the Series 4 Class D Preferred Stock, for payment of the
penalty described below in this Section 4.3, which demand must be received by
the Corporation no later than ten (10) calendar days after the expiration of
such Seven (7) Business Day Period, the Corporation shall pay to RBB Bank the
following penalty for each business day after the Seven (7) Business Day Period
until the Corporation delivers to the holder or its agent the certificate
representing the shares of Common Stock that the holder is entitled to receive
as a result of such conversion:</FONT> <FONT size=3>business day eight (8) -
U.S. $1,000; business day nine (9) - U.S. $2,000, and each business day
thereafter an amount equal</FONT> <FONT size=3>to the penalty due on the
immediately preceding business day</FONT> <FONT size=3>times two (2) until the
Corporation delivers to the holder or</FONT> <FONT size=3>its agent the
certificate representing the shares of Common</FONT> <FONT size=3>Stock that the
holder is entitled to receive as a result of</FONT> <FONT size=3>such
conversion.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;<B><U>Merger or Consolidation</U></B>. In case of
either (a) any merger or</FONT> <FONT size=3>consolidation to which the
Corporation is a party</FONT> <FONT size=3>(collectively, the "Merger"), other
than a Merger in which the</FONT> <FONT size=3>Corporation is the surviving or
continuing corporation, or (b)</FONT> <FONT size=3>any sale or conveyance to
another corporation of all, or</FONT> <FONT size=3>substantially all, of the
assets of the Corporation</FONT> <FONT size=3>(collectively, the "Sale"), and
such Merger or Sale becomes</FONT> <FONT size=3>effective (x) while any shares
of Series 4 Class D Preferred</FONT> <FONT size=3>Stock are outstanding and
prior to the date that the</FONT> <FONT size=3>Corporation's Registration
Statement covering up to 1,482,000</FONT> <FONT size=3>shares of Common Stock
issuable upon the conversion of the</FONT> <FONT size=3>Series 4 Class D
Preferred Stock is declared effective by the</FONT> <FONT size=3>U. S.
Securities and Exchange Commission or (y) prior to the</FONT> <FONT size=3>end
of the restriction periods in Section 4.1, then, in such</FONT> <FONT
size=3>event, the Corporation or such successor corporation, as the</FONT> <FONT
size=3>case may be, shall make appropriate provision so that the</FONT> <FONT
size=3>holder of each share of Series 4</FONT></P>
<P>&nbsp;</P>
<P align=center>-6-</P>
<P>&nbsp;</P>
<P><FONT size=3>Class D Preferred Stock then</FONT> <FONT size=3>outstanding
shall have the right to convert such share of</FONT> <FONT size=3>Series 4 Class
D Preferred Stock into the kind and amount of</FONT> <FONT size=3>shares of
stock or other securities and property receivable upon such Merger or Sale by a
holder of the number of shares</FONT> <FONT size=3>of Common Stock into which
such shares of Series 4 Class D</FONT> <FONT size=3>Preferred Stock could have
been converted into immediately</FONT> <FONT size=3>prior to such Merger or
Sale, subject to adjustments which</FONT> <FONT size=3>shall be as nearly
equivalent as may be practicable to the</FONT> <FONT size=3>adjustments provided
for in this Part 4.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;<U><B>Adjustments to Conversion Price for
Stock</B></U>&nbsp;&nbsp;Dividends and for Combinations or Subdivisions of
Common Stock. If the Corporation at any time or from time to time while shares
of Series 4 Class D 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.</FONT></P>
<P><FONT size=3>4.5.&nbsp;&nbsp;<B><U>Adjustments for Reclassification and
Reorganization</U></B>. If the Common Stock issuable upon conversion of the
Series 4 Class D 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 4 Class D
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 4 Class D 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
4 Class D Preferred Stock immediately before that change.</FONT></P><FONT
size=3>4.6&nbsp;&nbsp;<U><B>Common Stock Duly Issued</B></U>. All Common Stock
which may be</FONT> <FONT size=3>issued upon conversion of Series 4 Class D
Preferred Stock</FONT> <FONT size=3>will, upon issuance, be duly issued, fully
paid and</FONT> <FONT size=3>nonassessable and free from all taxes, liens, and
charges with</FONT> <FONT size=3>respect to the issue thereof.</FONT>
<P><FONT size=3>4.7&nbsp;&nbsp;<B><U>Notice of Adjustments.</U></B> 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 4 Class D Preferred
Stock a notice setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment is based.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-7-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>4.8&nbsp;&nbsp;<B><U>Issue Taxes</U></B>. The Corporation shall
pay any and all issue and</FONT> <FONT size=3>other taxes that may be payable in
respect of any issue or</FONT> <FONT size=3>delivery of shares of Common Stock
on conversion of the Series</FONT> <FONT size=3>4 Class D Preferred Stock
pursuant thereto; provided, however,</FONT> <FONT size=3>that the Corporation
shall not be obligated to pay any</FONT> <FONT size=3>transfer taxes resulting
from any transfer requested by any</FONT> <FONT size=3>holder of Series 4 Class
D Preferred Stock in connection with</FONT> <FONT size=3>such
conversion.</FONT></P>
<P><FONT size=3>4.9&nbsp;&nbsp;<B><U>Reservation of Stock Issuable Upon
Conversion</U></B>. 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 4 Class D
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 4 Class D 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 4 Class D 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.</FONT></P>
<P><FONT size=3>4.10&nbsp;&nbsp;<B><U>Fractional Shares</U></B>. No fractional
shares shall be issued upon</FONT> <FONT size=3>the conversion of any share or
shares of Series 4 Class D Preferred Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Series 4 Class D 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.</FONT></P>
<P><FONT size=3>4.11&nbsp;&nbsp;<B><U>Notices</U></B>. Any notices required by
the provisions of this Part</FONT> <FONT size=3>4 to be given to the holders of
shares of Series 4 Class D</FONT> <FONT size=3>Preferred Stock shall be deemed
given if deposited in the</FONT> <FONT size=3>United States mail, postage
prepaid, and addressed to each</FONT> <FONT size=3>holder of record at his
address appearing on the books of the</FONT> <FONT
size=3>Corporation.</FONT></P>
<P><FONT size=3>4.12&nbsp;&nbsp;<B><U>Business Day</U></B>. As used herein, the
term "business day" shall</FONT> <FONT size=3>mean any day other than a
Saturday, Sunday or a day when the</FONT> <FONT size=3>federal and state banks
located in the State of New York are</FONT> <FONT size=3>required or is
permitted to close.</FONT></P>
<P><FONT size=3><B><U>Part 5 - Redemption</U></B>.</FONT></P>
<P><FONT size=3>5.1&nbsp;&nbsp;Redemption at Corporation's Option. Except as
otherwise</FONT> <FONT size=3>provided in this Section 5.1, at any time, and
from time to</FONT> <FONT size=3>time, after the expiration of one (1) year from
the date of</FONT> <FONT size=3>the first issuance of the Series 4 Class
D</FONT></P>
<P>&nbsp;</P>
<P align=center>-8-</P>
<P>&nbsp;</P>
<P><FONT size=3>Preferred Stock,</FONT> <FONT size=3>the Corporation may, at its
sole option, but shall not be </FONT>o<FONT size=3>bligated to, redeem, in whole
or in part, at any time, and</FONT> <FONT size=3>from time to time, the then
outstanding Series 4 Class D</FONT> <FONT size=3>Preferred Stock at the
following cash redemption prices per</FONT> <FONT size=3>share (the "Redemption
Price") if redeemed during the</FONT> <FONT size=3>following periods: (a) within
four (4) years from the date of</FONT> <FONT size=3>the first issuance of Series
4 Class D Preferred Stock -</FONT> <FONT size=3>$1,300 per share, if at any time
during such four (4) year</FONT> <FONT size=3>period the average of the closing
bid price of the Common</FONT> <FONT size=3>Stock for ten (10) consecutive
trading days shall be in excess</FONT> <FONT size=3>of Four U.S. Dollars ($4.00)
per share, and (b) after four (4)</FONT> <FONT size=3>years from the date of the
first issuance of Series 4 Class D</FONT> <FONT size=3>Preferred Stock - $1,000
per share.</FONT></P>
<P><FONT size=3>5.3&nbsp;&nbsp;<B><U>Mechanics of Redemption</U></B>. Thirty
(30) days prior to any date stipulated by the Corporation for the redemption of
Series 4 Class D 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 4 Class D Preferred Stock. The Redemption Notice shall state:
(i) the Redemption Date of such shares, (ii) the number of Series 4 Class D
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 4 Class D Preferred Stock to be redeemed from
such holder, and (iv) instructions as to how to specify to the Corporation the
number of Series 4 Class D Preferred Stock to be redeemed as provided in this
Part 5 and, if the Redemption Notice is mailed to the Holder after the first one
hundred eighty (180) days from the date of issuance of the Series 4 Class D
Preferred Stock, the number of shares to be converted into Common Stock as
provided in Part 4 hereof.</FONT></P>
<P><FONT size=3>5.4&nbsp;&nbsp;<B><U>Rights of Conversion Upon
Redemption</U></B>. If the redemption</FONT> <FONT size=3>occurs after the first
one hundred eighty (180) days after the first issuance of Series 4 Class D
Preferred Stock, then, upon receipt of the Redemption Notice, any holder of
Series 4 Class D Preferred Stock shall have the option, at its sole election, to
specify what portion of its Series 4 Class D 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, except
that, notwithstanding any provision of such Part 4 to the contrary, such holder
shall have the right to convert into Common Stock that number of Series 4 Class
D Preferred Stock called for redemption in the Redemption Notice.</FONT></P>
<P><FONT size=3>5.5&nbsp;&nbsp;<B><U>Surrender of Certificates</U></B>. On or
before the Redemption Date in respect of any Series 4 Class D 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, and each surrendered share
certificate shall be canceled and retired. If a share certificate is</FONT></P>
<P>&nbsp;</P>
<P align=center>-9-</P>
<P>&nbsp;</P>
<P><FONT size=3>surrendered and all the shares evidenced thereby are not being
redeemed (as described below), the Corporation shall cause the Series 4 Class D
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.</FONT></P>
<P><FONT size=3>5.6&nbsp;&nbsp;<B><U>Payment</U></B>.&nbsp;&nbsp;On the
Redemption Date in respect of any Series 4</FONT> <FONT size=3>Class D 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 4 Class D
Preferred Stock in respect of which the Corporation has received notice from the
holder thereof of its election to convert Series 4 Class D 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.&nbsp;</FONT></P>
<P><FONT size=3><B><U>Part 6 - Parity with Other Shares of Series 4 Class D
Preferred Stock and Priority.</U></B></FONT></P>
<P><FONT size=3>6.1&nbsp;&nbsp;<B><U>Rateable Participation.</U></B> If any
cumulative dividends or return of capital in respect of Series 4 Class D
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.</FONT></P>
<P><FONT size=3>6.2&nbsp;&nbsp;<U><B>Ranking.</B></U>&nbsp;&nbsp;For purposes of
this resolution, any stock of any class or series of the Corporation shall be
deemed to rank: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;Prior or senior
to the shares of this Series 4 Class D Preferred Stock either as to dividends
or&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt of
dividends<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
or of amounts distributable upon dissolution, liquidation or winding up of the
Corporation,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether
voluntary or involuntary, as the case may be, in preference or priority to the
holders&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
shares of this Series 4 Class D Preferred Stock;</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-10-</FONT></P>
<P>&nbsp;</P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;On a
parity with, or equal to, shares of this</FONT> <FONT size=3>Series 4 Class D
Preferred Stock, either as to</FONT> <FONT
size=3>dividends<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
or upon liquidation, whether or not the dividend rates, dividend payment dates,
or redemption
or<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
liquidation prices per share or sinking fund provisions, if any, are different
from those of
this&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
4 Class C Preferred Stock, if the holders of such stock are entitled to the
receipt
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or of amounts distributable upon dissolution, liquidation or winding up of
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation,
whether voluntary or involuntary, in proportion to their respective dividend
rates<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
or liquidation prices, without preference or priority, one over the other, as
between the</FONT> <FONT
size=3>holders&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
such stock and over the other, as between the holders of such stock and
the</FONT> <FONT size=3>holders of
shares&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
this Series 4 Class D Preferred Stock; and,</FONT>
<P><FONT size=3>6.2.3 Junior to shares of this Series 4 Class D 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 4 Class D 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.</FONT></P>
<P><FONT size=3><B><U>Part 7 - Amendment and Reissue.</U></B></FONT></P>
<P><FONT size=3>7.1&nbsp;&nbsp;Amendment. If any proposed amendment to
the</FONT> <FONT size=3>Corporation's Certificate of Incorporation (the</FONT>
<FONT size=3>"Articles") would alter or change the powers, preferences or
special rights of the Series 4 Class D Preferred Stock so as to affect such
adversely, then the Corporation must obtain the affirmative vote of such
amendment to the</FONT> <FONT size=3>Articles at a duly called and held series
meeting of the holders of the Series 4 Class D Preferred Stock or</FONT> <FONT
size=3>written consent by the holders of a majority of the Series 4 Class D
Preferred Stock then outstanding.</FONT> <FONT size=3>Notwithstanding the above
or the provisions of the GCL, the number of authorized shares of any class or
classes</FONT> <FONT size=3>of stock of the Corporation may be increased or
decreased (but not below the number of shares thereof outstanding)</FONT> <FONT
size=3>by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon,</FONT> <FONT size=3>voting together as a
single class, irrespective of the provisions of this Section 7.1 or Section 242
of the GCL.</FONT></P>
<P><FONT size=3>7.2&nbsp;&nbsp;<B><U>Authorized</U></B>. Any shares of Series 4
Class D 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. <BR WP="BR1"></FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-1</FONT>1</P>
<P align=right><font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 11:15 AM 07/14/1997<br>
&nbsp;&nbsp;&nbsp;971232152 - 2249849</font>&nbsp;</P>
<P align=center><FONT size=3><B>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES 5 CLASS
E CONVERTIBLE PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.</B></FONT></P><BR WP="BR1">
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental Services,
Inc. (the "Corporation"), a</FONT> <FONT size=3>corporation organized and
existing under the General Corporation</FONT> <FONT size=3>Law of the State of
Delaware, does hereby certify:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, pursuant to authority
conferred upon by the Board of</FONT> <FONT size=3>Directors by the
Corporation's Restated Certificate of</FONT> <FONT size=3>Incorporation, as
amended, and pursuant to the provisions of</FONT> <FONT size=3>Section 151 of
the Delaware Corporation Law, the Board of Directors</FONT> <FONT size=3>of the
Corporation has adopted resolutions, a copy of which is</FONT> <FONT
size=3>attached hereto, establishing and providing for the issuance of a</FONT>
<FONT size=3>series of Preferred Stock designated as Series 5 Class E</FONT>
<FONT size=3>Convertible Preferred Stock and has established and fixed
the</FONT> <FONT size=3>voting powers, designations, preferences and
relative</FONT> <FONT size=3>participating, optional and other special rights
and</FONT> <FONT size=3>qualifications, limitations and restrictions of such
Series 5 Class</FONT> <FONT size=3>E Convertible Preferred Stock as set forth in
the attached</FONT> <FONT size=3>resolutions.</FONT></P>
<P><FONT size=3>Dated: July 3,
1997&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>SERVICES, INC.</FONT></P><FONT size=3><BR WP="BR1"><BR
WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
<U>/s/ Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Dr. Louis F.
Centofanti<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman
of the Board</FONT>
<P><FONT size=3>ATTEST:</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"><U>/s/
Richard T.
Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U></FONT>R<FONT
size=3>ichard T. Kelecy, Secretary</FONT>
<P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3><B>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.<BR></B></FONT><B><FONT size=3>(the "Corporation")<BR><BR>RESOLUTION OF THE
BOARD OF DIRECTORS<BR><BR>FIXING THE NUMBER AND DESIGNATING THE RIGHTS,
PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS ATTACHING TO THE<BR>SERIES 5 CLASS E
CONVERTIBLE PREFERRED STOCK</FONT></B></P><BR WP="BR2">
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>the Corporation's
capital includes preferred stock,</FONT> <FONT size=3>par value $.001 per share
("Preferred Stock"), which Preferred</FONT> <FONT size=3>Stock may be issued in
one or more series by resolutions adopted by</FONT> <FONT size=3>the directors,
and with the directors being entitled by resolution</FONT> <FONT size=3>to fix
the number of shares in each series and to designate the</FONT> <FONT
size=3>rights, designations, preferences and relative, participating,</FONT>
<FONT size=3>optional or other special rights and privileges, and</FONT> <FONT
size=3>qualifications, limitations or restrictions attaching to the
shares</FONT> <FONT size=3>of each such series;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, 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");&nbsp;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, BE IT
RESOLVED</B>, 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:</FONT></P>
<P><FONT size=3><B><U>Part 1 - Voting and Preemptive Rights.</U></B></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;<B><U>Voting Rights</U></B>. Except as otherwise
provided in Section</FONT> <FONT size=3>242(b)(2) of the General Corporation Law
of the State of Delaware</FONT> <FONT size=3>(the "GCL"), the holders of the
Series 5 Class E Preferred Stock</FONT> <FONT size=3>shall have no voting rights
whatsoever. To the extent that under</FONT> <FONT size=3>Section 242(b)(2) of
the GCL the vote of the holders of the Series</FONT> <FONT size=3>5 Class E
Preferred Stock, voting separately as a class or series</FONT> <FONT size=3>as
applicable, is required to authorize a given action of the</FONT> <FONT
size=3>Corporation, the affirmative vote or consent of the holders of at</FONT>
<FONT size=3>least a majority of the shares of the Series 5 Class E
Preferred</FONT> <FONT size=3>Stock represented at a duly held meeting at which
a quorum is</FONT> <FONT size=3>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 Preferred Stock shall be entitled to</FONT></P>
<P>&nbsp;</P>
<P align=center>-2-</P>
<P>&nbsp;</P>
<P><FONT size=3>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.</FONT></P>
<P><FONT size=3>1.2&nbsp;&nbsp;<B><U>No Preemptive Rights</U></B>. The Series 5
Class E Preferred Stock</FONT> <FONT size=3>shall not give its holders any
preemptive rights to acquire any</FONT> <FONT size=3>other securities issued by
the Corporation at any time in the</FONT> <FONT size=3>future.</FONT></P>
<P><FONT size=3><B><U>Part 2 - Liquidation Rights.</U></B></FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;<U><B>Liquidation</B></U>. If the Corporation
shall be voluntarily or</FONT> <FONT size=3>involuntarily liquidated, dissolved
or wound up at any time when</FONT> <FONT size=3>any shares of the Series 5
Class E Preferred Stock shall be</FONT> <FONT size=3>outstanding, the holders of
the then outstanding Series 5 Class E</FONT> <FONT size=3>Preferred Stock shall
be entitled to receive out of the assets of</FONT> <FONT size=3>the Corporation
available for distribution to shareholders an</FONT> <FONT size=3>amount equal
to $1,000 consideration per outstanding share of</FONT> <FONT size=3>Series 5
Class E Preferred Stock, and no more, plus an amount equal</FONT> <FONT
size=3>to all unpaid dividends accrued thereon to the date of payment of</FONT>
<FONT size=3>such distribution ("Liquidation Preference"), whether or not</FONT>
<FONT size=3>declared by the Board of Directors, before any payment shall
be</FONT> <FONT size=3>made or any assets distributed to the holders of the
Corporation's</FONT> <FONT size=3>Common Stock.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;<B><U>Payment of Liquidation Preferences</U></B>.
Subject to the provisions</FONT> <FONT size=3>of Part 6 hereof, all amounts to
be paid as Liquidation Preference</FONT> <FONT size=3>to the holders of Series 5
Class E Preferred Stock, as provided in</FONT> <FONT size=3>this Part 2, shall
be paid or set apart for payment before the</FONT> <FONT size=3>payment or
setting apart for payment of any amount for, or the</FONT> <FONT
size=3>distribution of any of the Corporation's property to the holders
of</FONT> <FONT size=3>the Corporation's Common Stock, whether now or
hereafter</FONT> <FONT size=3>authorized, in connection with such liquidation,
dissolution or</FONT> <FONT size=3>winding up.</FONT></P>
<P><FONT size=3>2.3&nbsp;&nbsp;<B><U>No Rights After Payment</U></B>. After the
payment to the holders of</FONT> <FONT size=3>the shares of the Series 5 Class E
Preferred Stock of the full</FONT> <FONT size=3>Liquidation Preference amounts
provided for in this Part 2, the</FONT> <FONT size=3>holders of the Series 5
Class E Preferred Stock as such shall have</FONT> <FONT size=3>no right or claim
to any of the remaining assets of the</FONT> <FONT
size=3>Corporation.</FONT></P>
<P><FONT size=3>2.4&nbsp;&nbsp;<B><U>Assets Insufficient to Pay Full Liquidation
Preference</U></B>. In</FONT> <FONT size=3>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 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-3-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 3 - Dividends.</U></B></FONT></P>
<P><FONT size=3>3.1&nbsp;&nbsp;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</FONT> <FONT size=3>the five (5) trading days immediately prior to the
Dividend</FONT> <FONT size=3>Declaration Date (the "Stock Dividend Price"),
times (b) a</FONT> <FONT size=3>fraction, the numerator of which is the number
of days elapsed</FONT> <FONT size=3>during the period for which the dividend is
to be paid, and the</FONT> <FONT size=3>denominator of which is 365. Dividends
on the Series 5 Class E</FONT> <FONT size=3>Preferred Stock shall be cumulative,
and no dividends or other</FONT> <FONT size=3>distributions shall be paid or
declared or set aside for payment on</FONT> <FONT size=3>the Corporation's
Common Stock until all accrued and unpaid</FONT> <FONT size=3>dividends on all
outstanding shares of Series 5 Class E Preferred</FONT> <FONT size=3>Stock shall
have been paid or declared and set aside for payment.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-4-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 4 - Conversion</U></B>. The holders of the Series 5
Class E Preferred</FONT> <FONT size=3>Stock shall have rights to convert the
shares of Series 5 Class E</FONT> <FONT size=3>Preferred Stock into shares of
the Corporation's Common Stock, as</FONT> <FONT size=3>follows (the "Conversion
Rights"):</FONT></P>
<P><FONT size=3>4.1 <B><U>Right to Convert</U></B>. The Series 5 Class E
Preferred Stock shall</FONT> <FONT size=3>be convertible into shares of Common
Stock, as follows:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1&nbsp;&nbsp;Up to one
hundred seventy-five (175) shares of</FONT> <FONT size=3>Series 5 Class E
Preferred Stock may
be&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;converted</FONT>
<FONT size=3>at the Conversion Price (as that term is defined in</FONT> <FONT
size=3>Section 4.2 below) at any
time&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on
or after November</FONT> <FONT size=3>3, 1997; and,</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2&nbsp;&nbsp;Up to an
additional one hundred seventy-five (175) shares of Series 5 Class E Preferred
Stock<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;may
be converted at the Conversion Price at any time on or after December 3,
1997.</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;<B><U>Conversion Price</U></B>. Subject to the
terms hereof, as used</FONT> <FONT size=3>herein, the term Conversion Price per
outstanding share of</FONT> <FONT size=3>Series 5 Class E Preferred Stock shall
be the product of the</FONT> <FONT size=3>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.</FONT></P>
<P><FONT size=3>4.3&nbsp;&nbsp;<B><U>Mechanics of Conversion</U></B>. 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 facsimile transmission,</FONT></P>
<P>&nbsp;</P>
<P align=center>-5-</P>
<P>&nbsp;</P>
<P><FONT size=3>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.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;<B><U>Merger or
Consolidation</U></B>.&nbsp;&nbsp;In case of either (a) any merger or</FONT>
<FONT size=3>consolidation to which the Corporation is a party</FONT> <FONT
size=3>(collectively, the "Merger"), other than a Merger in which the</FONT>
<FONT size=3>Corporation is the surviving or continuing corporation, or
(b)</FONT> <FONT size=3>any sale or conveyance to another corporation of all,
or</FONT> <FONT size=3>substantially all, of the assets of the
Corporation</FONT> <FONT size=3>(collectively, the "Sale"), and such Merger or
Sale becomes</FONT> <FONT size=3>effective (x) while any shares of Series 5
Class E Preferred</FONT> <FONT size=3>Stock are outstanding and prior to the
date that the</FONT> <FONT size=3>Corporation's Registration Statement covering
up to 200,000</FONT> <FONT size=3>shares of Common Stock issuable upon the
conversion of the</FONT> <FONT size=3>Series 5 Class E Preferred Stock is
declared effective by the</FONT> <FONT size=3>U. S. Securities and Exchange
Commission or (y) prior to the</FONT> <FONT size=3>end of the restriction
periods in Section 4.1, then, in such</FONT> <FONT size=3>event, the Corporation
or such successor corporation, as the</FONT> <FONT size=3>case may be, shall
make appropriate provision so that the</FONT> <FONT size=3>holder of each share
of Series 5 Class E Preferred Stock then</FONT> <FONT size=3>outstanding shall
have the right to convert such share of</FONT> <FONT size=3>Series 5 Class E
Preferred Stock into the kind and amount of</FONT> <FONT size=3>shares of stock
or other securities and property receivable</FONT> <FONT size=3>upon such Merger
or Sale by a holder of the number of shares</FONT> <FONT size=3>of Common Stock
into which such shares of Series 5 Class E</FONT> <FONT size=3>Preferred Stock
could have been converted into immediately</FONT> <FONT size=3>prior to such
Merger or Sale, subject to adjustments which</FONT> <FONT size=3>shall be as
nearly equivalent as may be practicable to the</FONT> <FONT size=3>adjustments
provided for in this Part 4.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-6-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>4.4&nbsp;&nbsp;<U><B>Adjustments to Conversion Price for Stock
Dividends and for</B></U></FONT> <U><B><FONT size=3>Combinations or Subdivisions
of Common Stock.</FONT></B></U><FONT size=3> 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.</FONT></P><FONT
size=3>4.5.&nbsp;&nbsp;<B><U>Adjustments for Reclassification and
Reorganization</U></B>. 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.</FONT>
<P><FONT size=3>4.6&nbsp;&nbsp;<B><U>Common Stock Duly Issued.</U></B> 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.</FONT></P>
<P><FONT size=3>4.7&nbsp;&nbsp;<B><U>Notice of Adjustments</U></B>. 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.</FONT></P>
<P><FONT size=3>4.8&nbsp;&nbsp;<B><U>Issue Taxes</U></B>. 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-7-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>4.9&nbsp;&nbsp;<B><U>Reservation of Stock Issuable Upon
Conversion</U></B>. 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.</FONT></P>
<P><FONT size=3>4.10&nbsp;&nbsp;<B><U>Fractional Shares</U></B>. No fractional
shares shall be issued upon</FONT> <FONT size=3>the conversion of any share or
shares of Series 5 Class E</FONT> <FONT size=3>Preferred Stock. All shares of
Common Stock (including</FONT> <FONT size=3>fractions thereof) issuable upon
conversion of more than one</FONT> <FONT size=3>share of Series 5 Class E
Preferred Stock by a holder thereof</FONT> <FONT size=3>shall be aggregated for
purposes of determining whether the</FONT> <FONT size=3>conversion would result
in the issuance of any fractional</FONT> <FONT size=3>share. If, after the
aforementioned aggregation, the</FONT> <FONT size=3>conversion would result in
the issuance of a fractional share</FONT> <FONT size=3>of Common Stock, such
fractional share shall be rounded up to</FONT> <FONT size=3>the nearest whole
share.</FONT></P>
<P><FONT size=3>4.11 <B><U>Notices</U></B>. Any notices required by the
provisions of this Part</FONT> <FONT size=3>4 to be given to the holders of
shares of Series 5 Class E</FONT> <FONT size=3>Preferred Stock shall be deemed
given if deposited in the</FONT> <FONT size=3>United States mail, postage
prepaid, and addressed to each</FONT> <FONT size=3>holder of record at his
address appearing on the books of the</FONT> <FONT
size=3>Corporation.</FONT></P>
<P><FONT size=3>4.12&nbsp;&nbsp;<B><U>Business Day</U></B>. As used herein, the
term "business day" shall</FONT> <FONT size=3>mean any day other than a
Saturday, Sunday or a day when the</FONT> <FONT size=3>federal and state banks
located in the State of New York are</FONT> <FONT size=3>required or is
permitted to close.</FONT></P>
<P><FONT size=3><B><U>Part 5 - Redemption</U></B>.</FONT></P>
<P><FONT size=3>5.1&nbsp;&nbsp;<B><U>Redemption at Corporation's Option</U></B>.
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 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-8-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>5.3&nbsp;&nbsp;<B><U>Mechanics of Redemption</U></B>. Thirty
(30) days prior to any date</FONT> <FONT size=3>stipulated by the Corporation
for the redemption of Series 5</FONT> <FONT size=3>Class E Preferred Stock (the
"Redemption Date"), written</FONT> <FONT size=3>notice (the "Redemption Notice")
shall be mailed to each</FONT> <FONT size=3>holder of record on such notice date
of the Series 5 Class E</FONT> <FONT size=3>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.</FONT></P>
<P><FONT size=3>5.4&nbsp;&nbsp;<B><U>Rights of Conversion Upon
Redemption</U></B>. 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.</FONT></P>
<P><FONT size=3>5.5 <U><B>Surrender of Certificates.</B></U> On or before the
Redemption Date</FONT> <FONT size=3>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.</FONT></P>
<P><FONT size=3>5.6&nbsp;&nbsp;<B><U>Payment</U></B>. On the Redemption Date in
respect of any Series 5</FONT> <FONT size=3>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 its election to convert Series 5 Class E</FONT></P>
<P>&nbsp;</P>
<P align=center>-9-</P>
<P>&nbsp;</P>
<P><FONT size=3>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.</FONT></P>
<P><B><U><FONT size=3>Part 6 - Parity with Other Shares of Series 5 Class E
Preferred Stock and Priority.</FONT></U></B></P>
<P><FONT size=3>6.1&nbsp;&nbsp;<B><U>Rateable Participation</U></B>. 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.</FONT></P>
<P><FONT size=3>6.2&nbsp;&nbsp;<B><U>Ranking</U></B>. For purposes of this
resolution, any stock of any class or series of the Corporation shall be deemed
to rank:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;Prior or senior
to the shares of this Series 5 Class E Preferred Stock either as to
dividends<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
upon liquidation, if the holders of such</FONT> <FONT size=3>class or classes
shall be entitled to the</FONT> <FONT size=3>receipt
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or of amounts distributable upon dissolution, liquidation or winding up of
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation,
whether voluntary or involuntary, as the case may be, in preference or
priority&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the holders of shares of this Series 5 Class E Preferred Stock;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;On a parity with,
or equal to, shares of this Series 5 Class E Preferred Stock, either as
to&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or upon liquidation, whether or not the dividend rates, dividend payment
dates,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
redemption or liquidation prices per share or sinking fund provisions, if any,
are
different&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from
those of this Series 5 Class E Preferred Stock, if the holders of such stock are
entitled&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the receipt of dividends or of amounts distributable upon dissolution,
liquidation or
winding&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;up
of the Corporation, whether voluntary or involuntary, in proportion to their
respective&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividend
rates or liquidation prices, without preference or priority, one over the other,
as&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;between
the holders of such stock and over the other, as between the holders of such
stock&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
the holders of shares of this Series 5 Class E Preferred Stock; and,</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-10-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;Junior to shares
of this Series 5 Class E Preferred Stock, either as to dividends or
upon&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation,
if such class or series shall be Common Stock or if the holders of shares of
this&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
5 Class E Preferred Stock shall be entitled to receipt of dividends or of
amounts&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;distributable
upon dissolution, liquidation or winding up of the Corporation, whether
voluntary<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
involuntary, as the case may be, in preference or priority to the holders of
shares of
such&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;class
or series.</FONT></P>
<P><FONT size=3><B><U>Part 7 - Reissue.</U></B></FONT></P>
<P><FONT size=3>7.1&nbsp;&nbsp;<B><U>Authorized</U></B>. 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.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-11-</FONT></P>
<P>&nbsp;<font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 01:30 PM 11/13/1997<br>
&nbsp;&nbsp;&nbsp;971387107 - 2249849</font>&nbsp;</P>
<P align=center><FONT size=3><B>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES 6 CLASS
F CONVERTIBLE PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.</B></FONT></P><FONT size=3><BR WP="BR1"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental Services,
Inc. (the "Corporation"), a</FONT> <FONT size=3>corporation organized and
existing under the General Corporation</FONT> <FONT size=3>Law of the State of
Delaware, does hereby certify:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, pursuant to authority
conferred upon by the Board of</FONT> <FONT size=3>Directors by the
Corporation's Restated Certificate of</FONT> <FONT size=3>Incorporation, as
amended, and pursuant to the provisions of</FONT> <FONT size=3>Section 151 of
the Delaware Corporation Law, the Board of Directors</FONT> <FONT size=3>of the
Corporation has adopted resolutions, a copy of which is</FONT> <FONT
size=3>attached hereto, establishing and providing for the issuance of </FONT>a
<FONT size=3>series of Preferred Stock designated as Series 6 Class F</FONT>
<FONT size=3>Convertible Preferred Stock and has established and fixed
the</FONT> <FONT size=3>voting powers, designations, preferences and
relative</FONT> <FONT size=3>participating, optional and other special rights
and</FONT> <FONT size=3>qualifications, limitations and restrictions of such
Series 6 Class</FONT> <FONT size=3>F Convertible Preferred Stock as set forth in
the attached</FONT> <FONT size=3>resolutions.</FONT></P>
<P><FONT size=3>Dated: November 12,
1997<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;PERMA-FIX
ENVIRONMENTAL<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;SERVICES, INC.</FONT></P><FONT size=3><BR WP="BR1"><BR
WP="BR2"></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;<FONT size=3>By<U> /s/ Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>Dr. Louis F.
Centofanti<BR></FONT>&nbsp;<FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of
the Board<BR><BR>ATTEST:</FONT>
<P><FONT size=3><BR WP="BR1"><BR WP="BR2"><U>/s/ Richard T.
Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>Richard
T. Kelecy, Secretary</FONT>
<P>
<P>&nbsp;</P>
<P align=center><B><FONT size=3>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<BR>(the
"Corporation")<BR><BR>RESOLUTION OF THE BOARD OF DIRECTORS<BR><BR>FIXING THE
NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS
ATTACHING TO THE<BR>SERIES 6 CLASS F CONVERTIBLE PREFERRED
STOCK</FONT></B></P><BR WP="BR2">
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the Corporation's
capital includes preferred stock,</FONT> <FONT size=3>par value $.001 per share
("Preferred Stock"), which Preferred</FONT> <FONT size=3>Stock may be issued in
one or more series by resolutions adopted by</FONT> <FONT size=3>the directors,
and with the directors being entitled by resolution</FONT> <FONT size=3>to fix
the number of shares in each series and to designate the</FONT> <FONT
size=3>rights, designations, preferences and relative, participating,</FONT>
<FONT size=3>optional or other special rights and privileges, restrictions
and</FONT> <FONT size=3>conditions attaching to the shares of each such
series;</FONT></P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;<B>&nbsp;WHEREAS</B>, it
is in the best interests of the Corporation for</FONT> <FONT size=3>the Board to
create a new series from the Preferred Stock</FONT> <FONT size=3>designated as
the Series 6 Class F Convertible Preferred Stock, par</FONT> <FONT size=3>value
$.001 per share (the "Series 6 Class F Preferred
Stock");<BR><BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3><B>NOW,
THEREFORE, BE IT RESOLVED</B>, that the Series 6 Class F</FONT> <FONT
size=3>Preferred Stock shall consist of two thousand five hundred (2,500)</FONT>
<FONT size=3>shares and no more and shall be designated as the Series 6 Class
F</FONT> <FONT size=3>Convertible Preferred Stock, and the preferences,
rights,</FONT> <FONT size=3>privileges, restrictions and conditions attaching to
the Series 6</FONT> <FONT size=3>Class F Preferred Stock shall be as
follows:</FONT>
<P><FONT size=3><B><U>Part 1 - Voting and Preemptive Rights.</U></B></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;<B><U>Voting Rights</U></B>.&nbsp;&nbsp;Except as
otherwise provided in Part</FONT> <FONT size=3>7 hereof or under the General
Corporation Law of the</FONT> <FONT size=3>State of Delaware (the "GCL"), the
holders of the Series</FONT> <FONT size=3>6 Class F Preferred Stock shall have
no voting rights</FONT> <FONT size=3>whatsoever. To the extent that under Part 7
hereof or</FONT> <FONT size=3>the GCL the vote of the holders of the Series 6
Class F</FONT> <FONT size=3>Preferred Stock, voting separately as a class or
series</FONT> <FONT size=3>as applicable, is required to authorize a given
action of</FONT> <FONT size=3>the Corporation, the affirmative vote or consent
of the</FONT> <FONT size=3>holders of at least a majority of the shares of
the</FONT> <FONT size=3>Series 6 Class F Preferred Stock represented at a
duly</FONT> <FONT size=3>held meeting at which a quorum is present or by
written</FONT> <FONT size=3>consent of a majority of the shares of Series 6
Class F</FONT> <FONT size=3>Preferred Stock (except as otherwise may be
required</FONT> <FONT size=3>under the GCL) shall constitute the approval of
such action by the series. To the extent that under the GCL</FONT> <FONT
size=3>or Part 7 hereof, the holders of the Series 6 Class F</FONT> <FONT
size=3>Preferred Stock are entitled to vote on a matter, each</FONT> <FONT
size=3>share of the Series 6 Class F Preferred Stock shall be</FONT> <FONT
size=3>entitled one (1) vote for each outstanding share of</FONT> <FONT
size=3>Series 6 Class F Preferred Stock. Holders of the Series</FONT> <FONT
size=3>6 Class F Preferred Stock shall be entitled to notice of</FONT> <FONT
size=3>(and copies of proxy materials and other information sent</FONT> <FONT
size=3>to stockholders) for all shareholder meetings or</FONT></P>
<P>&nbsp;</P>
<P align=center>-1-</P>
<P>&nbsp;</P>
<P><FONT size=3>written consents with respect to which they would be entitled
to</FONT> <FONT size=3>vote, which notice would be provided pursuant to
the</FONT> <FONT size=3>Corporation's bylaws and applicable statutes.</FONT></P>
<P><FONT size=3>1.2&nbsp;&nbsp;<B><U>No Preemptive Rights</U></B>. The Series 6
Class F</FONT> <FONT size=3>Preferred Stock shall not give its holders any
preemptive</FONT> <FONT size=3>rights to acquire any other securities issued by
the Corporation at any time in the future.</FONT></P>
<P><FONT size=3><B><U>Part 2 - Liquidation Rights</U></B>.</FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;<B><U>Liquidation</U></B>.&nbsp;&nbsp;If the
Corporation shall be</FONT> <FONT size=3>voluntarily or involuntarily
liquidated, dissolved or</FONT> <FONT size=3>wound up at any time when any
shares of the Series 6</FONT> <FONT size=3>Class F Preferred Stock shall be
outstanding, the holders</FONT> <FONT size=3>of the then outstanding Series 6
Class F Preferred Stock</FONT> <FONT size=3>shall have a preference in
distribution of the</FONT> <FONT size=3>Corporation's property available for
distribution to the</FONT> <FONT size=3>holders of the Corporation's Common
Stock equal to $1,000</FONT> <FONT size=3>consideration per outstanding share of
Series 6 Class F</FONT> <FONT size=3>Preferred Stock, plus an amount equal to
all unpaid</FONT> <FONT size=3>dividends accrued thereon to the date of payment
of such</FONT> <FONT size=3>distribution ("Liquidation Preference"), whether or
not</FONT> <FONT size=3>declared by the Board.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;<B><U>Payment of Liquidation Preferences.</U></B>
Subject to the provisions of Part 6 hereof, all amounts to be paid as
Liquidation Preference to the holders of Series 6 Class F 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.</FONT></P>
<P><FONT size=3>2.3&nbsp;&nbsp;<B><U>No Rights After Payment</U></B>. After the
payment to the holders of the shares of the Series 6 Class F Preferred Stock of
the full Liquidation Preference amounts provided for in this Part 2, the holders
of the Series 6 Class F Preferred Stock as such shall have no right or claim to
any of the remaining assets of the Corporation.</FONT></P>
<P><FONT size=3>2.4&nbsp;&nbsp;<U><B>Assets Insufficient to Pay Full Liquidation
Preference</B></U>. In the event that the assets of the Corporation available
for distribution to the holders of shares of the Series 6 Class F Preferred
Stock upon any dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, shall be 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 6 Class F
Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series 6 Class F Preferred Stock and shares of such other class or series
ranking on a parity with the shares of this Series 6 Class F Preferred
Stock,</FONT></P>
<P>&nbsp;</P>
<P align=center>-2-</P>
<P>&nbsp;</P>
<P><FONT size=3>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.</FONT></P>
<P><FONT size=3><B><U>Part 3 - Dividends</U></B>. The holders of the Series 6
Class F</FONT> <FONT size=3>Preferred Stock are entitled to receive if, when and
as</FONT> <FONT size=3>declared by the Board out of funds legally
available</FONT> <FONT size=3>therefor, cumulative dividends, payable in cash or
Common</FONT> <FONT size=3>Stock of the Corporation, par value $.001 per share
(the</FONT> <FONT size=3>"Common Stock"), or any combination thereof, at
the</FONT> <FONT size=3>Corporation's election, at the rate of four percent
(4%)</FONT> <FONT size=3>per annum of the Liquidation Value (as defined below)
of</FONT> <FONT size=3>each issued and outstanding share of Series 6 Class
F</FONT> <FONT size=3>Preferred Stock (the "Dividend Rate"). The
Liquidation</FONT> <FONT size=3>Value of the Series 6 Class F Preferred Stock
shall be</FONT> <FONT size=3>$1,000 per outstanding share of the Series 6 Class
F</FONT> <FONT size=3>Preferred Stock (the "Liquidation Value"). The
dividend</FONT> <FONT size=3>is payable semi-annually within seven (7) business
days</FONT> <FONT size=3>after each of December 31 and June 30 of each
year,</FONT> <FONT size=3>commencing December 31, 1997 (each, a "Dividend</FONT>
<FONT size=3>Declaration Date"). Dividends shall be paid only with</FONT> <FONT
size=3>respect to shares of Series 6 Class F Preferred Stock</FONT> <FONT
size=3>actually issued and outstanding on a Dividend Declaration</FONT> <FONT
size=3>Date and to holders of record of the Series 6 Class F</FONT> <FONT
size=3>Preferred Stock as of the Dividend Declaration Date.</FONT> <FONT
size=3>Dividends shall accrue from the first day of the semi-annual period in
which such dividend may be payable,</FONT> <FONT size=3>except with respect to
the first semi-annual dividend</FONT> <FONT size=3>which shall accrue from
September 16, 1997. In the event</FONT> <FONT size=3>that the Corporation elects
to pay the accrued dividends</FONT> <FONT size=3>due as of a Dividend
Declaration Date on an outstanding</FONT> <FONT size=3>share of the Series 6
Class F Preferred Stock in Common</FONT> <FONT size=3>Stock of the Corporation,
the holder of such share shall</FONT> <FONT size=3>receive that number of shares
of Common Stock of the</FONT> <FONT size=3>Corporation equal to the product of
(a) the quotient of</FONT> <FONT size=3>(i) the Dividend Rate divided by (ii)
the average of the</FONT> <FONT size=3>closing bid quotation of the
Corporation's Common Stock</FONT> <FONT size=3>as reported on the National
Association of Securities</FONT> <FONT size=3>Dealers Automated Quotation system
("NASDAQ"), or the</FONT> <FONT size=3>average closing sale price if listed on a
national</FONT> <FONT size=3>securities exchange, for the five (5) trading
days</FONT> <FONT size=3>immediately prior to the Dividend Declaration Date
(the</FONT> <FONT size=3>"Stock Dividend Price"), times (b) a fraction,
the</FONT> <FONT size=3>numerator of which is the number of days elapsed
during</FONT> <FONT size=3>the period for which the dividend is to be paid, and
the</FONT> <FONT size=3>denominator of which is 365. Dividends on the Series
6</FONT> <FONT size=3>Class F Preferred Stock shall be cumulative, and no</FONT>
<FONT size=3>dividends or other distributions shall be paid or</FONT> <FONT
size=3>declared or set aside for payment on the Corporation's</FONT> <FONT
size=3>Common Stock until all accrued and unpaid dividends on</FONT> <FONT
size=3>all outstanding shares of Series 6 Class F Preferred</FONT> <FONT
size=3>Stock shall have been paid or declared and set aside for</FONT> <FONT
size=3>payment.</FONT></P>
<P><FONT size=3><B><U>Part 4 - Conversion</U></B>. The holders of the Series 6
Class</FONT> <FONT size=3>F Preferred Stock shall have rights to convert the
shares of Series 6 Class F Preferred Stock into shares of the Corporation's
Common Stock, par value $.001 per share ("Common Stock"), as follows (the
"Conversion Rights"):</FONT></P>
<P><FONT size=3>4.1&nbsp;&nbsp;<B><U>Right to Convert</U></B>. The Series 6
Class F Preferred Stock shall be convertible into shares of Common Stock, as
follows:&nbsp;</FONT></P>
<P align=center><FONT size=3>-3-</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1&nbsp;&nbsp;Up to one
thousand two hundred fifty (1,250)</FONT> <FONT size=3>shares of Series 6 Class
F Preferred Stock may</FONT>&nbsp;<FONT
size=3><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;be
converted at the Conversion Price (as that</FONT> <FONT size=3>term is defined
in Section 4.2 below) at any</FONT> <FONT
size=3>time&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on
or after October 5, 1997; and,</FONT>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2&nbsp;&nbsp;Up to an
additional one thousand two hundred fifty (1,250) shares of Series 6 Class F
Preferred<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
may be converted at the Conversion Price at any time on or after November 5,
1997.</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;<U><B>Conversion Price</B></U>. Subject to the
terms hereof, as used herein, the Conversion Price per outstanding share of
Series 6 Class F Preferred Stock shall be $1.8125, except that, in the event the
average closing bid price per share of the Common Stock for 20 of any 30
consecutive trading days after March 1, 1998 shall be less than $2.50 as
reported on the over-the-counter market, or the closing sale price if listed on
a national securities exchange, the Conversion Price shall thereafter 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 trading days immediately
preceding the date of the Conversion Notice referred to in Section 4.3 below
multiplied by eighty percent (80%) or (ii) $1.8125. 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 6 Class F 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 6 Class
F Preferred Stock so surrendered for conversion by (b) the Conversion Price as
of such conversion. At the time of conversion of shares of the Series 6 Class F
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 whole shares of 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 6 Class F Preferred
Stock so converted divided by the Stock Dividend Price, as defined in Part 3
hereof, in effect at the date of conversion.</FONT></P>
<P><FONT size=3>4.3&nbsp;&nbsp;<B><U>Mechanics of Conversion</U></B>. Any holder
of the Series 6 Class F Preferred Stock who wishes to exercise its Conversion
Rights pursuant to Section 4.1 of this Part 4 must, if such shares are not being
held in escrow by the Corporation's attorneys, surrender the certificate
therefor at the principal executive office of the Corporation, and give written
notice, which may be via facsimile transmission, to the Corporation at such
office that it elects to convert the same (the "Conversion Notice"). In the
event that the shares of Series 6 Class F</FONT></P>
<P>&nbsp;</P>
<P align=center>-4-</P>
<P>&nbsp;</P>
<P><FONT size=3>Preferred Stock are being held in escrow by the Corporation's
attorneys, no delivery of the certificates shall be required. No Conversion
Notice with respect to any shares of Series 6 Class F Preferred Stock can be
given prior to the time such shares of Series 6 Class F 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 five (5) business
days after receipt of an appropriate and timely Conversion Notice (and
certificate, if necessary), issue to such holder of Series 6 Class F 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 6 Class F 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 6 Class F Preferred Stock to be converted
have been surrendered and the Conversion Notice is received by the Corporation
(or in the event that no surrender of the Certificate is required, then only
upon the receipt by the Corporation of the Conversion Notice) (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. If the Corporation fails to deliver to the holder
or its agent the certificate representing the shares of Common Stock that the
holder is entitled to receive as a result of such conversion within seven (7)
business days after receipt by the Corporation from the holder of an appropriate
and timely Conversion Notice and certificates pursuant to the terms of this
Section 4.3 ("Seven (7) Business Day Period"), then, upon the written demand of
RBB Bank Aktiengesellschaft ("RBB Bank"), the holder of the Series 6 Class F
Preferred Stock, for payment of the penalty described below in this Section 4.3,
which demand must be received by the Corporation no later than ten (10) calendar
days after the expiration of such Seven (7) Business Day Period, the Corporation
shall pay to RBB Bank the following penalty for each business day after the
Seven (7) Business Day Period until the Corporation delivers to the holder or
its agent the certificate representing the shares of Common Stock that the
holder is entitled to receive as a result of such conversion: business day eight
(8) - U.S. $1,000; business day nine (9) - U.S. $2,000, and each business day
thereafter an amount equal to the penalty due on the immediately preceding
business day times two (2) until the Corporation delivers to the holder or its
agent the certificate representing the shares of Common Stock that the holder is
entitled to receive as a result of such conversion.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-5-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>4.4&nbsp;&nbsp;<U><B>Merger or
Consolidation.</B></U>&nbsp;&nbsp;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 6 Class
F Preferred Stock are outstanding and prior to the date that the Corporation's
Registration Statement covering up to 1,379,500 shares of Common Stock issuable
upon the conversion of the Series 6 Class F 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 6 Class F
Preferred Stock then outstanding shall have the right to convert such share of
Series 6 Class F 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 6 Class F
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.</FONT></P>
<P><FONT size=3>4.5&nbsp;&nbsp;<U><B>Adjustments to Conversion Price for Stock
Dividends</B></U> <U><B>and for Combinations or Subdivisions of Common
Stock.</B></U>&nbsp; If the Corporation at any time or from time to time while
shares of Series 6 Class F 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.</FONT></P>
<P><FONT size=3>4.6&nbsp;&nbsp;<B><U>Adjustments for Reclassification and
Reorganization</U></B>. If the Common Stock issuable upon conversion of the
Series 6 Class F 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
shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series 6 Class F
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 6 Class F Preferred Stock would
otherwise have been entitled to</FONT></P>
<P>&nbsp;</P>
<P align=center>-6-</P>
<P>&nbsp;</P>
<P><FONT size=3>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 6 Class F
Preferred Stock immediately before that change.</FONT></P>
<P><FONT size=3>4.7&nbsp;&nbsp;<B><U>Common Stock Duly Issued</U></B>. All
Common Stock which</FONT> <FONT size=3>may be issued upon conversion of Series 6
Class F</FONT> <FONT size=3>Preferred Stock will, upon issuance, be duly
issued,</FONT> <FONT size=3>fully paid and nonassessable and free from all
taxes,</FONT> <FONT size=3>liens, and charges with respect to the issue
thereof.</FONT></P>
<P><FONT size=3>4.8&nbsp;&nbsp;<B><U>Notice of Adjustments</U></B>. 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 6 Class F Preferred
Stock a notice setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment is based.</FONT></P>
<P><FONT size=3>4.9 <B><U>Issue Taxes</U></B>. The Corporation shall pay any and
all</FONT> <FONT size=3>issue and other taxes that may be payable in respect
of</FONT> <FONT size=3>any issue or delivery of shares of Common Stock on</FONT>
<FONT size=3>conversion of the Series 6 Class F Preferred Stock</FONT> <FONT
size=3>pursuant thereto; provided, however, that the Corporation</FONT> <FONT
size=3>shall not be obligated to pay any transfer taxes</FONT> <FONT
size=3>resulting from any transfer requested by any holder of</FONT> <FONT
size=3>Series 6 Class F Preferred Stock in connection with such</FONT> <FONT
size=3>conversion.</FONT></P>
<P><FONT size=3>4.10 <B><U>Reservation of Stock Issuable Upon
Conversion</U></B>. The</FONT> <FONT size=3>Corporation shall at all times
reserve and keep available</FONT> <FONT size=3>out of its authorized but
unissued shares of Common</FONT> <FONT size=3>Stock, solely for the purpose of
effecting the conversion</FONT> <FONT size=3>of the shares of the Series 6 Class
F Preferred Stock,</FONT> <FONT size=3>such number of its shares of Common Stock
as shall, from</FONT> <FONT size=3>time to time, be sufficient to effect the
conversion of</FONT> <FONT size=3>all outstanding shares of the Series 6 Class F
Preferred</FONT> <FONT size=3>stock, and, if at any time, the number of
authorized but</FONT> <FONT size=3>unissued shares of Common Stock shall not be
sufficient</FONT> <FONT size=3>to effect the conversion of all then outstanding
shares</FONT> <FONT size=3>of the Series 6 Class F Preferred Stock, the
Corporation</FONT> <FONT size=3>will take such corporate action as may be
necessary to</FONT> <FONT size=3>increase its authorized but unissued shares of
Common</FONT> <FONT size=3>Stock to such number of shares as shall be sufficient
for</FONT> <FONT size=3>such purposes, including, without limitation, engaging
in</FONT> <FONT size=3>reasonable efforts to obtain the requisite
stockholder</FONT> <FONT size=3>approval of any necessary amendment to its
Certificate of</FONT> <FONT size=3>Incorporation.</FONT></P>
<P><FONT size=3>4.11&nbsp;&nbsp;<B><U>Fractional Shares</U></B>. No fractional
shares shall be</FONT> <FONT size=3>issued upon the conversion of any share or
shares of</FONT> <FONT size=3>Series 6 Class F Preferred Stock. All shares of
Common</FONT> <FONT size=3>Stock (including fractions thereof) issuable
upon</FONT> <FONT size=3>conversion of more than one share of Series 6 Class
F</FONT> <FONT size=3>Preferred Stock by a holder thereof shall be
aggregated</FONT> <FONT size=3>for purposes of determining whether the
conversion would</FONT> <FONT size=3>result in the issuance of any fractional
share. If,</FONT> <FONT size=3>after</FONT></P>
<P>&nbsp;</P>
<P align=center>-7-</P>
<P>&nbsp;</P>
<P><FONT size=3>the aforementioned aggregation, the conversion</FONT> <FONT
size=3>would result in the issuance of a fractional share of</FONT> <FONT
size=3>Common Stock, such fractional share shall be rounded up</FONT> <FONT
size=3>to the nearest whole share.</FONT></P>
<P><FONT size=3>4.12&nbsp;&nbsp;<B><U>Notices</U></B>. Any notices required by
the provisions of</FONT> <FONT size=3>this Part 4 to be given to the holders of
shares of</FONT> <FONT size=3>Series 6 Class F Preferred Stock shall be deemed
given if</FONT> <FONT size=3>deposited in the United States mail, postage
prepaid, and</FONT> <FONT size=3>addressed to each holder of record at his
address</FONT> <FONT size=3>appearing on the books of the
Corporation.</FONT></P>
<P><FONT size=3>4.13&nbsp;&nbsp;<B><U>Business Day</U></B>. As used herein, the
term "business</FONT> <FONT size=3>day" shall mean any day other than a
Saturday, Sunday or</FONT> <FONT size=3>a day when the federal and state banks
located in the</FONT> <FONT size=3>State of New York are required or is
permitted to close.</FONT></P>
<P><FONT size=3><B><U>Part 5 - Redemption</U></B>.</FONT></P>
<P><FONT size=3>5.1&nbsp;&nbsp;<B><U>Redemption at Corporation's Option</U></B>.
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 June 9, 1997, 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 6 Class F
Preferred Stock at the following cash redemption prices per share (the
"Redemption Price") if redeemed during the following periods: (a) within four
years from June 9, 1997 - $1,300 per share, if at any time during such four year
period the average of the closing bid price of the Common Stock for ten
consecutive trading days shall be in excess of Four Dollars ($4.00) per share,
and (b) after four years from June 9, 1997 - $1,000 per share.</FONT></P>
<P><FONT size=3>5.2&nbsp;&nbsp;<B><U>Mechanics of Redemption</U></B>. Thirty
days prior to any date stipulated by the Corporation for the redemption of
Series 6 Class F 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 6 Class F Preferred Stock. The Redemption Notice shall state:
(i) the Redemption Date of such shares, (ii) the number of Series 6 Class F
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 6 Class F Preferred Stock to be redeemed from
such holder, and (iv) instructions as to how to specify to the Corporation the
number of Series 6 Class F Preferred Stock to be redeemed as provided in this
Part 5 and, if the Redemption Notice is mailed to the Holder after the first 180
days from the date of issuance of the Series 6 Class F Preferred Stock, the
number of shares to be converted into Common Stock as provided in Part 4
hereof.</FONT></P>
<P><FONT size=3>5.3&nbsp;&nbsp;<B><U>Rights of Conversion Upon
Redemption</U></B>.&nbsp;&nbsp;If the redemption occurs after the first 180 days
after the first issuance of Series 6 Class F Preferred Stock, then, upon receipt
of the Redemption Notice, any holder of</FONT></P>
<P>&nbsp;</P>
<P align=center>-8-</P>
<P>&nbsp;</P>
<P><FONT size=3>Series 6 Class F Preferred Stock shall have the option, at its
sole election, to specify what portion of its Series 6 Class F 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, except that, notwithstanding any provision of such Part 4 to the
contrary, such holder shall have the right to convert into Common Stock that
number of Series 6 Class F Preferred Stock called for redemption in the
Redemption Notice.</FONT></P>
<P><FONT size=3>5.4&nbsp;&nbsp;<B><U>Surrender of
Certificates</U></B>.&nbsp;&nbsp;On or before the Redemption Date in respect of
any Series 6 Class F 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, and each surrendered share certificate shall be canceled and retired.
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
6 Class F 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.</FONT></P>
<P><FONT size=3>5.5&nbsp;&nbsp;<B><U>Payment</U></B>. On the Redemption Date in
respect of any Series 6 Class F Preferred Stock or prior thereto, the
Corporation shall deposit with any bank or trust company having a capital and
surplus of at least $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 6 Class F Preferred Stock in respect of which
the Corporation has received notice from the holder thereof of its election to
convert Series 6 Class F 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.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-9-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 6 - Parity with Other Shares of Series 6 Class F
Preferred Stock and Priority.</U></B></FONT></P>
<P><FONT size=3>6.1&nbsp;&nbsp;<B><U>Rateable Participation</U></B>. If any
cumulative dividends</FONT> <FONT size=3>or return of capital in respect of
Series 6 Class F</FONT> <FONT size=3>Preferred Stock are not paid in full, the
owners of all</FONT> <FONT size=3>series of outstanding Preferred Stock shall
participate</FONT> <FONT size=3>rateably in respect of accumulated dividends and
return</FONT> <FONT size=3>of capital.</FONT></P>
<P><FONT size=3>6.2&nbsp;&nbsp;<B><U>Ranking</U></B>. For purposes of this
resolution, any stock of any class or series of the Corporation shall be deemed
to rank:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;Prior or senior
to the shares of this Series 6 Class F Preferred Stock either as to dividends
or&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon
liquidation, if the holders of such class or classes shall be entitled to the
receipt
of&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or of amounts distributable upon dissolution, liquidation or winding up of
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporation,
whether voluntary or involuntary, as the case may be, in preference or
priority<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the holders of shares of this Series 6 Class F Preferred Stock;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;On a parity with,
or equal to, shares of this Series 6 Class F Preferred Stock, either as
to&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or upon liquidation, whether or not the dividend rates, dividend payment dates,
or<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
redemption or liquidation prices per share or sinking fund provisions, if any,
are different
from&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;those
of this Series 6 Class F Preferred Stock, if the holders of such stock are
entitled to
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;receipt
of dividends or of amounts distributable upon dissolution, liquidation or
winding
up&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
the Corporation, whether voluntary or involuntary, in proportion to their
respective
dividend&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;rates
or liquidation prices, without preference or priority, one over the other, as
between
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;holders
of such stock and over the other, as between the holders of such stock and
the&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;holders
of shares of this Series 6 Class F Preferred Stock; and,&nbsp;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3 Junior to shares of this
Series 6 Class F Preferred Stock, either as to dividends or
upon&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation,
if such class or series shall be Common Stock or if the holders of shares of
this&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
6 Class F Preferred Stock shall be entitled to receipt of dividends or of
amounts&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;distributable
upon dissolution, liquidation or winding up of the Corporation,
whether&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;voluntary
or involuntary, as the case may be, in preference or priority to the holders of
shares&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
such class or series.</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-10-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3><B><U>Part 7 - Amendment and Reissue.</U></B></FONT></P>
<P><FONT size=3>7.1&nbsp;&nbsp;<U><B>Amendment.</B></U>&nbsp;&nbsp;If any
proposed amendment to the</FONT> <FONT size=3>Corporation's Certificate of
Incorporation (the</FONT> <FONT size=3>"Articles") would alter or change the
powers, preferences</FONT> <FONT size=3>or special rights of the Series 6 Class
F Preferred Stock</FONT> <FONT size=3>so as to affect such adversely, then the
Corporation must</FONT> <FONT size=3>obtain the affirmative vote of such
amendment to the</FONT> <FONT size=3>Articles at a duly called and held series
meeting of the</FONT> <FONT size=3>holders of the Series 6 Class F Preferred
Stock or</FONT> <FONT size=3>written consent by the holders of a majority of
the</FONT> <FONT size=3>Series 6 Class F Preferred Stock then
outstanding.</FONT> <FONT size=3>Notwithstanding the above or the provisions of
the GCL,</FONT> <FONT size=3>the number of authorized shares of any class or
classes</FONT> <FONT size=3>of stock of the Corporation may be increased or
decreased</FONT> <FONT size=3>(but not below the number of shares thereof
outstanding)</FONT> <FONT size=3>by the affirmative vote of the holders of a
majority of</FONT> <FONT size=3>the stock of the Corporation entitled to vote
thereon,</FONT> <FONT size=3>voting together as a single class, irrespective of
the</FONT> <FONT size=3>provisions of this Section 7.1 or Section 242 of the
GCL.</FONT></P>
<P><FONT size=3>7.2&nbsp;&nbsp;<B><U>Authorized</U></B>. Any shares of Series 6
Class F</FONT> <FONT size=3>Preferred Stock acquired by the Corporation by
reason of</FONT> <FONT size=3>purchase, conversion, redemption or otherwise
shall be</FONT> <FONT size=3>retired and shall become authorized but unissued
shares</FONT> <FONT size=3>of Preferred Stock, which may be reissued as part of
a</FONT> <FONT size=3>new series of Preferred Stock hereafter
created.</FONT></P>&nbsp;
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-11-</FONT></P>
<P align=left><font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 01:31 PM 11/13/1997<br>
&nbsp;&nbsp;&nbsp;971387113 - 2249849</font>&nbsp;&nbsp;</P>
<P align=center><FONT size=3><B>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES 7 CLASS
G CONVERTIBLE PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.</B></FONT></P><BR WP="BR2">
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 7 Class G 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 7 Class G Convertible Preferred Stock as set
forth in the attached resolutions.</FONT></P>
<P><FONT size=3>Dated: November 12, 1997</FONT></P>
<P><FONT
size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>SERVICES, INC.</FONT></P><FONT size=3><BR
WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By<U>
/s/ Louis F.
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.
Louis F.
Centofanti<BR></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Chairman of the Board</FONT>
<P><FONT size=3>ATTEST:</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"><BR
WP="BR1"><U>/s/ Richard T.
Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></U>Richard
T. Kelecy, Secretary</FONT>
<P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><FONT size=3><B>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<BR>(the
"Corporation")<BR><BR>RESOLUTION OF THE BOARD OF DIRECTORS<BR><BR>FIXING THE
NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS
ATTACHING TO THE<BR>SERIES 7 CLASS G CONVERTIBLE PREFERRED
STOCK</B></FONT></P><FONT size=3><BR></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS,</B> the Corporation's
capital includes preferred stock,</FONT> <FONT size=3>par value $.001 per share
("Preferred Stock"), which Preferred</FONT> <FONT size=3>Stock may be issued in
one or more series by resolutions adopted by</FONT> <FONT size=3>the directors,
and with the directors being entitled by resolution</FONT> <FONT size=3>to fix
the number of shares in each series and to designate the</FONT> <FONT
size=3>rights, designations, preferences and relative, participating,</FONT>
<FONT size=3>optional or other special rights and privileges, restrictions
and</FONT> <FONT size=3>conditions attaching to the shares of each such
series;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, it is in the best
interests of the Corporation for</FONT> <FONT size=3>the Board to create a new
series from the Preferred Stock</FONT> <FONT size=3>designated as the Series 7
Class G Convertible Preferred Stock, par</FONT> <FONT size=3>value $.001 per
share (the "Series 7 Class G Preferred Stock");</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, BE IT
RESOLVED</B>, that the Series 7 Class G</FONT> <FONT size=3>Preferred Stock
shall consist of three hundred (350) shares and no</FONT> <FONT size=3>more and
shall be designated as the Series 7 Class G Convertible</FONT> <FONT
size=3>Preferred Stock, and the preferences, rights, privileges,</FONT> <FONT
size=3>restrictions and conditions attaching to the Series 7 Class G</FONT>
<FONT size=3>Preferred Stock shall be as follows:</FONT></P>
<P><FONT size=3><B><U>Part 1 - Voting and Preemptive Rights</U></B>.</FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;<B><U>Voting Rights</U></B>.&nbsp;&nbsp;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 7 Class G 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 7 Class G 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 7 Class G
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 7 Class G 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 7 Class G Preferred Stock are
entitled to vote on a matter, each share of the Series 7 Class G Preferred Stock
shall be entitled one (1) vote for each outstanding share of Series 7 Class G
Preferred Stock. Holders of the Series 7 Class G 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 7 Class G 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.&nbsp;</FONT></P>
<P>&nbsp;</P>
<P align=center><FONT size=3>-1-</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>1.2&nbsp;&nbsp;<B><U>No Preemptive Rights</U></B>. The Series 7
Class G Preferred Stock</FONT> <FONT size=3>shall not give its holders any
preemptive rights to acquire any</FONT> <FONT size=3>other securities issued by
the Corporation at any time in the</FONT> <FONT size=3>future.</FONT></P>
<P><FONT size=3><B><U>Part 2 - Liquidation Rights</U></B>.</FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;<B><U>Liquidation</U></B>. If the Corporation
shall be voluntarily or</FONT> <FONT size=3>involuntarily liquidated, dissolved
or wound up at any time when</FONT> <FONT size=3>any shares of the Series 7
Class G Preferred Stock shall be</FONT> <FONT size=3>outstanding, the holders of
the then outstanding Series 7 Class G</FONT> <FONT size=3>Preferred Stock shall
be entitled to receive out of the assets of</FONT> <FONT size=3>the Corporation
available for distribution to shareholders an</FONT> <FONT size=3>amount equal
to $1,000 consideration per outstanding share of</FONT> <FONT size=3>Series 7
Class G Preferred Stock, and no more, plus an amount equal</FONT> <FONT
size=3>to all unpaid dividends accrued thereon to the date of payment of</FONT>
<FONT size=3>such distribution ("Liquidation Preference"), whether or not</FONT>
<FONT size=3>declared by the Board of Directors, before any payment shall
be</FONT> <FONT size=3>made or any assets distributed to the holders of the
Corporation's</FONT> <FONT size=3>Common Stock.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;<U><B>Payment of Liquidation Preferences</B></U>.
Subject to the provisions</FONT> <FONT size=3>of Part 6 hereof, all amounts to
be paid as Liquidation Preference</FONT> <FONT size=3>to the holders of Series 7
Class G Preferred Stock, as provided in</FONT> <FONT size=3>this Part 2, shall
be paid or set apart for payment before the</FONT> <FONT size=3>payment or
setting apart for payment of any amount for, or the</FONT> <FONT
size=3>distribution of any of the Corporation's property to the holders
of</FONT> <FONT size=3>the Corporation's Common Stock, whether now or
hereafter</FONT> <FONT size=3>authorized, in connection with such liquidation,
dissolution or winding up.</FONT></P>
<P><FONT size=3>2.3&nbsp;&nbsp;<B><U>No Rights After Payment</U></B>. After the
payment to the holders of</FONT> <FONT size=3>the shares of the Series 7 Class G
Preferred Stock of the full</FONT> <FONT size=3>Liquidation Preference amounts
provided for in this Part 2, the</FONT> <FONT size=3>holders of the Series 7
Class G Preferred Stock as such shall have</FONT> <FONT size=3>no right or claim
to any of the remaining assets of the</FONT> <FONT
size=3>Corporation.</FONT></P>
<P><FONT size=3>2.4&nbsp;&nbsp;<B><U>Assets Insufficient to Pay Full Liquidation
Preference</U></B>. In</FONT> <FONT size=3>the event that the assets of the
Corporation available for</FONT> <FONT size=3>distribution to the holders of
shares of the Series 7 Class G</FONT> <FONT size=3>Preferred Stock upon any
dissolution, liquidation or winding up of</FONT> <FONT size=3>the Corporation,
whether voluntary or involuntary, shall be</FONT> <FONT size=3>insufficient to
pay in full all amounts to which such holders are</FONT> <FONT size=3>entitled
pursuant to this Part 2, no such distribution shall be</FONT> <FONT size=3>made
on account of any shares of any other class or series of</FONT> <FONT
size=3>Preferred Stock ranking on a parity with the shares of this Series</FONT>
<FONT size=3>7 Class G Preferred Stock upon such dissolution, liquidation
or</FONT> <FONT size=3>winding up unless proportionate distributive amounts
shall be paid</FONT> <FONT size=3>on account of the shares of this Series 7
Class G Preferred Stock</FONT> <FONT size=3>and shares of such other class or
series ranking on a parity with</FONT> <FONT size=3>the shares of this Series 7
Class G Preferred Stock, ratably, in</FONT> <FONT size=3>proportion to the full
distributable amounts for which holders of</FONT> <FONT size=3>all such parity
shares are respectively entitled upon such</FONT> <FONT size=3>dissolution,
liquidation or winding up.</FONT></P>
<P><FONT size=3><B><U>Part 3 - Dividends</U></B>.</FONT></P>
<P><FONT size=3>3.1 The holders of the Series 7 Class G 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</FONT></P>
<P>&nbsp;</P>
<P align=center>-2-</P>
<P>&nbsp;</P>
<P><FONT size=3>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 7 Class G Preferred Stock (the "Dividend Rate"). The Liquidation Value of
the Series 7 Class G Preferred Stock shall be $1,000 per outstanding share of
the Series 7 Class G Preferred Stock (the "Liquidation Value"). The dividend is
payable semi-annually within seven (7) business days after each of December
31and 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 7 Class G Preferred Stock actually issued and outstanding on a Dividend
Declaration Date and to holders of record of the Series 7 Class G 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 7 Class G 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 7 Class G 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 7 Class G 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 7 Class G
Preferred Stock shall have been paid or declared and set aside for
payment.&nbsp;</FONT></P>
<P><FONT size=3><B><U>Part 4 - Conversion</U></B>. The holders of the Series 7
Class G Preferred Stock shall have rights to convert the shares of Series 7
Class G Preferred Stock into shares of the Corporation's Common Stock, as
follows (the "Conversion Rights"):</FONT></P>
<P><FONT size=3>4.1&nbsp;&nbsp;<B><U>Right to Convert</U></B>. The Series 7
Class G Preferred Stock shall</FONT> <FONT size=3>be convertible into shares of
Common Stock, as follows:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1&nbsp;&nbsp;Up to one
hundred seventy-five (175) shares of</FONT> <FONT size=3>Series 7 Class G
Preferred Stock may be converted</FONT> <FONT size=3>at the Conversion Price (as
that term is defined in</FONT> <FONT size=3>Section 4.2 below) at any time on or
after November</FONT> <FONT size=3>3, 1997; and,</FONT></P>
<P>&nbsp;</P>
<P align=center>-3-</P>
<P>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2 Up to an additional one
hundred seventy-five (175)</FONT> <FONT size=3>shares of Series 7 Class G
Preferred Stock may be</FONT> <FONT size=3>converted at the Conversion Price at
any time on or</FONT> <FONT size=3>after December 3, 1997.</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;<B><U>Conversion Price</U></B>. Subject to the
terms hereof, as used</FONT> <FONT size=3>herein, the Conversion Price per
outstanding share of Series</FONT> <FONT size=3>7 Class G Preferred Stock shall
be $1.8125 except that, in the</FONT> <FONT size=3>event the average closing bid
price per share of the Common</FONT> <FONT size=3>Stock for 20 of any 30
consecutive trading days (a "30 Day</FONT> <FONT size=3>Period") after March 1,
1998 shall be less than $2.50 as</FONT> <FONT size=3>reported on the
over-the-counter market, or the closing sale</FONT> <FONT size=3>price if listed
on a national securities exchange and if the</FONT> <FONT size=3>holders of the
Series 7 Class G Preferred Stock have engaged</FONT> <FONT size=3>in no sales of
Common Stock of the Company during, and for 30</FONT> <FONT size=3>trading days
prior to, the applicable 30 Day Period, the</FONT> <FONT size=3>Conversion Price
shall thereafter be the product of the lesser</FONT> <FONT size=3>of (i) the
average closing bid quotation of the Common Stock</FONT> <FONT size=3>as
reported on the over-the-counter market, or the closing</FONT> <FONT size=3>sale
price if listed on a national securities exchange, for</FONT> <FONT size=3>the
five trading days immediately preceding the date of the</FONT> <FONT
size=3>Conversion Notice referred to in Section 4.3 below multiplied</FONT>
<FONT size=3>by eighty percent (80%) or (ii) $1.8125. Notwithstanding the</FONT>
<FONT size=3>foregoing, the Conversion Price shall not be less than a</FONT>
<FONT size=3>minimum of $.75 per share ("Minimum Conversion Price"),
which</FONT> <FONT size=3>Minimum Conversion Price shall be eliminated from and
after</FONT> <FONT size=3>September 6, 1998. If any of the outstanding shares of
Series</FONT> <FONT size=3>7 Class G Preferred Stock are converted, in whole or
in part,</FONT> <FONT size=3>into Common Stock pursuant to the terms of this
Part 4, the</FONT> <FONT size=3>number of shares of whole Common Stock to be
issued to the</FONT> <FONT size=3>holder as a result of such conversion shall be
determined by</FONT> <FONT size=3>dividing (a) the aggregate Liquidation Value
of the Series 7</FONT> <FONT size=3>Class G Preferred Stock so surrendered for
conversion by (b)</FONT> <FONT size=3>the Conversion Price as of such
conversion. At the time of</FONT> <FONT size=3>conversion of shares of the
Series 7 Class G Preferred Stock,</FONT> <FONT size=3>the Corporation shall pay
in cash to the holder thereof an</FONT> <FONT size=3>amount equal to all unpaid
and accrued dividends, if any,</FONT> <FONT size=3>accrued thereon to the date
of conversion, or, at the</FONT> <FONT size=3>Corporation's option, in lieu of
paying cash for the accrued</FONT> <FONT size=3>and unpaid dividends, issue that
number of whole shares of</FONT> <FONT size=3>Common Stock which is equal to the
quotient of the amount of</FONT> <FONT size=3>such unpaid and accrued dividends
to the date of conversion on</FONT> <FONT size=3>the shares of Series 7 Class G
Preferred Stock so converted</FONT> <FONT size=3>divided by the Stock Dividend
Price, as defined in Part 3 hereof, in effect at the date of
conversion.</FONT></P>
<P><FONT size=3>4.5 <B><U>Adjustments for Reclassification and
Reorganization</U></B>. If the Common Stock issuable upon conversion of the
Series 7 Class G 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 7 Class G
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 7 Class G 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
7 Class G Preferred Stock immediately before that change.</FONT></P>
<P><FONT size=3>4.6&nbsp;&nbsp;<b><u>Common Stock Duly Issued</u></b>. All Common Stock which
may be issued upon conversion of Series 7 Class G Preferred Stock will, upon issuance, be duly issued, fully paid and</FONT>
<FONT size=3>nonassessable and free from all taxes, liens, and charges
with</FONT> <FONT size=3>respect to the issue thereof.</FONT></P>
<P><FONT size=3>4.7&nbsp;&nbsp;<b><u>Notice of Adjustments</u></b>. Upon the occurrence of each
adjustment</FONT> <FONT size=3>or readjustment of any Conversion Price pursuant to this
Part</FONT> <FONT size=3>4, the Corporation, at its expense, within a reasonable
period</FONT> <FONT size=3>of time, shall compute such adjustment or readjustment
in</FONT> <FONT size=3>accordance with the terms hereof and prepare and furnish
to</FONT> <FONT size=3>each holder of Series 7 Class G Preferred Stock a
notice</FONT> <FONT size=3>setting forth such adjustment or readjustment and showing
in</FONT> <FONT size=3>detail the facts upon which such adjustment is
based.</FONT></P>
<P><FONT size=3>4.8&nbsp;&nbsp;<b><u>Issue Taxes</u></b>. The Corporation shall pay any and all issue
and</FONT> <FONT size=3>other taxes that may be payable in respect of any issue
or</FONT> <FONT size=3>delivery of shares of Common Stock on conversion of the
Series</FONT> <FONT size=3>7 Class G Preferred Stock pursuant thereto; provided,
however,</FONT> <FONT size=3>that the Corporation shall not be obligated to pay
any</FONT> <FONT size=3>transfer taxes resulting from any transfer requested by
any</FONT> <FONT size=3>holder of Series 7 Class G Preferred Stock in connection
with</FONT> <FONT size=3>such conversion.</FONT></P>
<P><FONT size=3>4.9&nbsp;&nbsp;<b><u>Reservation of Stock Issuable Upon
Conversion</u></b>.
The</FONT> <FONT size=3>Corporation shall at all times reserve and keep available
out</FONT> <FONT size=3>of its authorized but unissued shares of Common Stock,
solely</FONT> <FONT size=3>for the purpose of effecting the conversion of the shares
of</FONT> <FONT size=3>the Series 7 Class G Preferred Stock, such number of
its</FONT> <FONT size=3>shares of Common Stock as shall, from time to time,
be</FONT> <FONT size=3>sufficient to effect the conversion of all outstanding
shares</FONT> <FONT size=3>of the Series 7 Class G Preferred stock, and, if at any
time,</FONT> <FONT size=3>the number of authorized but unissued shares of Common
Stock</FONT> <FONT size=3>shall not be sufficient to effect the conversion of all
then</FONT> <FONT size=3>outstanding shares of the Series 7 Class G Preferred
Stock,</FONT> <FONT size=3>the Corporation will take such corporate action as may
be</FONT> <FONT size=3>necessary to increase its authorized but unissued shares
of</FONT> <FONT size=3>Common Stock to such number of shares as shall be
sufficient</FONT> <FONT size=3>for such purposes, including, without limitation, engaging
in</FONT> <FONT size=3>reasonable efforts to obtain the requisite
stockholder</FONT> <FONT size=3>approval of any necessary amendment to its Certificate
of</FONT> <FONT size=3>Incorporation.</FONT></P>
<P><FONT size=3>4.10&nbsp;&nbsp;<b><u>Fractional Shares</u></b>. No fractional shares shall be issued
upon</FONT> <FONT size=3>the conversion of any share or shares of Series 7 Class
G</FONT> <FONT size=3>Preferred Stock. All shares of Common Stock
(including</FONT> <FONT size=3>fractions thereof) issuable upon conversion of more than
one</FONT> <FONT size=3>share of Series 7 Class G Preferred Stock by a holder
thereof</FONT> <FONT size=3>shall be aggregated for purposes of determining whether
the</FONT> <FONT size=3>conversion would result in the issuance of any
fractional</FONT> <FONT size=3>share. If, after the aforementioned aggregation, the</FONT>
<FONT size=3>conversion would result in the issuance of a fractional
share</FONT> <FONT size=3>of Common Stock, such fractional share shall be rounded up
to</FONT> <FONT size=3>the nearest whole share.</FONT></P>
<P><FONT size=3>4.11&nbsp;&nbsp;<b><u>Notices</u></b>. Any notices required by the provisions of this
Part</FONT> <FONT size=3>4 to be given to the holders of shares of Series 7 Class
G</FONT> <FONT size=3>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.<br>
<br>
</FONT></P>
<P align="center"><FONT size=3>-5-</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P>&nbsp;</P>
<P><FONT size=3>4.12&nbsp;&nbsp;<b><u>Business Day</u></b>. As used herein, the term "business day"
shall</FONT> <FONT size=3>mean any day other than a Saturday, Sunday or a day when
the</FONT> <FONT size=3>federal and state banks located in the State of New York
are</FONT> <FONT size=3>required or is permitted to close.</FONT></P>
<P><FONT size=3><b><u>Part 5 - Redemption</u></b>.</FONT></P>
<P><FONT size=3>5.1&nbsp;&nbsp;<b><u>Redemption at Corporation's Option</u></b>. Except as
otherwise</FONT> <FONT size=3>provided in this Section 5.1, at any time, and from time
to</FONT> <FONT size=3>time, after the expiration of one (1) year from the date
of</FONT> <FONT size=3>the first issuance of the Series 7 Class G Preferred
Stock,</FONT> <FONT size=3>the Corporation may, at its sole option, but shall not
be</FONT> <FONT size=3>obligated to, redeem, in whole or in part, at any time,
and</FONT> <FONT size=3>from time to time, the then outstanding Series 7 Class
G</FONT> <FONT size=3>Preferred Stock at the following cash redemption prices
per</FONT> <FONT size=3>share (the "Redemption Price") if redeemed during the</FONT>
<FONT size=3>following periods: (a) within four (4) years from the date
of</FONT> <FONT size=3>the first issuance of Series 7 Class G Preferred Stock
-</FONT> <FONT size=3>$1,300 per share, if at any time during such four (4)
year</FONT> <FONT size=3>period the average of the closing bid price of the
Common</FONT> <FONT size=3>Stock for ten (10) consecutive trading days shall be in
excess</FONT> <FONT size=3>of Four U.S. Dollars ($4.00) per share, and (b) after four
(4)</FONT> <FONT size=3>years from the date of the first issuance of Series 7 Class
G</FONT> <FONT size=3>Preferred Stock - $1,000 per share.</FONT></P>
<P><FONT size=3>5.3&nbsp;&nbsp;<u><b>Mechanics of Redemption</b></u>. Thirty (30) days prior to any
date</FONT> <FONT size=3>stipulated by the Corporation for the redemption of Series
7</FONT> <FONT size=3>Class G Preferred Stock (the "Redemption Date"),
written</FONT> <FONT size=3>notice (the "Redemption Notice") shall be mailed to
each</FONT> <FONT size=3>holder of record on such notice date of the Series 7 Class
G</FONT> <FONT size=3>Preferred Stock. The Redemption Notice shall state: (i)
the</FONT> <FONT size=3>Redemption Date of such shares, (ii) the number of Series
7</FONT> <FONT size=3>Class G Preferred Stock to be redeemed from the holder to
whom</FONT> <FONT size=3>the Redemption Notice is addressed, (iii) instructions
for</FONT> <FONT size=3>surrender to the Corporation, in the manner and at the
place</FONT> <FONT size=3>designated, of a share certificate or share
certificates</FONT> <FONT size=3>representing the number of Series 7 Class G Preferred Stock
to</FONT> <FONT size=3>be redeemed from such holder, and (iv) instructions as to
how</FONT> <FONT size=3>to specify to the Corporation the number of Series 7 Class
G</FONT> <FONT size=3>Preferred Stock to be redeemed as provided in this Part
5.</FONT></P>
<P><FONT size=3>5.4&nbsp;&nbsp;<b><u>Rights of Conversion Upon Redemption</u></b>. If the
redemption</FONT> <FONT size=3>occurs after the first one hundred eighty (180) days after
the</FONT> <FONT size=3>first issuance of Series 7 Class G Preferred Stock, then,
upon</FONT> <FONT size=3>receipt of the Redemption Notice, any holder of Series 7
Class</FONT> <FONT size=3>G Preferred Stock shall have the option, at its sole
election,</FONT> <FONT size=3>to specify what portion of its Series 7 Class G
Preferred</FONT> <FONT size=3>Stock called for redemption in the Redemption Notice shall
be</FONT> <FONT size=3>redeemed as provided in this Part 5 or converted into
Common</FONT> <FONT size=3>Stock in the manner provided in Part 4 hereof, except
that,</FONT> <FONT size=3>notwithstanding any provision of such Part 4 to the
contrary,</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-6-</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P><FONT size=3>such holder shall have the right to convert into Common
Stock</FONT> <FONT size=3>that number of Series 7 Class G Preferred Stock called
for</FONT> <FONT size=3>redemption in the Redemption Notice.</FONT></P>
<P><FONT size=3>5.5&nbsp;&nbsp;<b><u>Surrender of Certificates</u></b>. On or before the Redemption
Date</FONT> <FONT size=3>in respect of any Series 7 Class G Preferred Stock,
each</FONT> <FONT size=3>holder of such shares shall surrender the required
certificate</FONT> <FONT size=3>or certificates representing such shares to the Corporation
in</FONT> <FONT size=3>the manner and at the place designated in the
Redemption</FONT> <FONT size=3>Notice, and upon the Redemption Date, the Redemption Price
for</FONT> <FONT size=3>such shares shall be made payable, in the manner provided
in</FONT> <FONT size=3>Section 5.6 hereof, to the order of the person whose
name</FONT> <FONT size=3>appears on such certificate or certificates as the
owner</FONT> <FONT size=3>thereof. If a share certificate is surrendered and all
the</FONT> <FONT size=3>shares evidenced thereby are not being redeemed (as
described</FONT> <FONT size=3>below), the Corporation shall cause the Series 7 Class
G</FONT> <FONT size=3>Preferred Stock which are not being redeemed to be
registered</FONT> <FONT size=3>in the names of the persons or entity whose names appear
as</FONT> <FONT size=3>the owners on the respective surrendered share
certificates</FONT> <FONT size=3>and deliver such certificate to such person.</FONT></P>
<P><FONT size=3>5.6 <b><u>Payment</u></b>. On the Redemption Date in respect of any Series
7</FONT> <FONT size=3>Class G Preferred Stock or prior thereto, the
Corporation</FONT> <FONT size=3>shall deposit with any bank or trust company having a
capital</FONT> <FONT size=3>and surplus of at least U. S. $50,000,000, as a trust fund,
a</FONT> <FONT size=3>sum equal to the aggregate Redemption Price of all such
shares</FONT> <FONT size=3>called from redemption (less the aggregate Redemption
Price</FONT> <FONT size=3>for those Series 7 Class G Preferred Stock in respect of
which</FONT> <FONT size=3>the Corporation has received notice from the holder thereof
of</FONT> <FONT size=3>its election to convert Series 7 Class G Preferred Stock
into</FONT> <FONT size=3>Common Stock), with irrevocable instructions and authority
to</FONT> <FONT size=3>the bank or trust company to pay, on or after the
Redemption</FONT> <FONT size=3>Date, the Redemption Price to the respective holders upon
the</FONT> <FONT size=3>surrender of their share certificates. The deposit
shall</FONT> <FONT size=3>constitute full payment for the shares to their holders,
and</FONT> <FONT size=3>from and after the date of the deposit the redeemed
shares</FONT> <FONT size=3>shall be deemed to be no longer outstanding, and
holders</FONT> <FONT size=3>thereof shall cease to be shareholders with respect to
such</FONT> <FONT size=3>shares and shall have no rights with respect thereto
except</FONT> <FONT size=3>the rights to receive from the bank or trust company
payments</FONT> <FONT size=3>of the Redemption Price of the shares, without interest,
upon</FONT> <FONT size=3>surrender of their certificates thereof. Any funds so</FONT>
<FONT size=3>deposited and unclaimed at the end of one year following
the</FONT> <FONT size=3>Redemption Date shall be released or repaid to the</FONT>
<FONT size=3>Corporation, after which the former holders of shares
called</FONT> <FONT size=3>for redemption shall be entitled to receive payment of
the</FONT> <FONT size=3>Redemption Price in respect of their shares only from
the</FONT> <FONT size=3>Corporation.</FONT></P>
<P><u><b><FONT size=3>Part 6 - Parity with Other Shares of Series 7 Class G
Preferred</FONT> </b></u><FONT size=3><u><b>Stock and Prior</b></u><b><u>ity</u></b>.</FONT></P>
<P><FONT size=3>6.1&nbsp;&nbsp;<b><u>Rateable Participation</u></b>. If any cumulative dividends or
return</FONT> <FONT size=3>of capital in respect of Series 7 Class G Preferred Stock
are</FONT> <FONT size=3>not paid in full, the owners of all series of
outstanding</FONT> <FONT size=3>Preferred Stock shall participate rateably in respect
of</FONT> <FONT size=3>accumulated dividends and return of capital.</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-7-</FONT></P>
<p>&nbsp;</p>
<P><FONT size=3>6.2&nbsp;&nbsp;<b><u>Ranking</u></b>. For purposes of this resolution, any stock of
any</FONT> <FONT size=3>class or series of the Corporation shall be deemed to
rank:</FONT>&nbsp;<FONT size=3><BR WP="BR1"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior or senior to the shares of this Series 7
Class G Preferred Stock either as to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends</FONT>
<FONT size=3>or upon liquidation, if the holders of such</FONT> <FONT size=3>class or classes shall be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;entitled to the</FONT>
<FONT size=3>receipt of dividends or of amounts</FONT> <FONT size=3>distributable upon dissolution,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation or</FONT>
<FONT size=3>winding up of the Corporation, whether</FONT> <FONT size=3>voluntary or involuntary,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as the case may be,</FONT>
<FONT size=3>in preference or priority to the holders of</FONT> <FONT size=3>shares of this Series&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 Class G Preferred</FONT>
<FONT size=3>Stock;</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a parity with, or equal to, shares of this</FONT>
<FONT size=3>Series 7 Class G Preferred Stock, either&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as to</FONT>
<FONT size=3>dividends or upon liquidation, whether or not</FONT> <FONT size=3>the dividend rates, dividend&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payment dates, or</FONT>
<FONT size=3>redemption or liquidation prices per share or</FONT> <FONT size=3>sinking fund provisions,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if any, are different</FONT>
<FONT size=3>from those of this Series 7 Class G Preferred</FONT> <FONT size=3>Stock, if the holders&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of such stock are</FONT>
<FONT size=3>entitled to the receipt of dividends or of</FONT> <FONT size=3>amounts distributable upon<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
dissolution,</FONT> <FONT size=3>liquidation or winding up of the Corporation,</FONT>
<FONT size=3>whether voluntary or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;involuntary, in</FONT>
<FONT size=3>proportion to their respective dividend rates</FONT> <FONT size=3>or liquidation prices,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;without preference or</FONT>
<FONT size=3>priority, one over the other, as between the</FONT> <FONT size=3>holders of such&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;stock and over the other, as</FONT>
<FONT size=3>between the holders of such stock and the</FONT> <FONT size=3>holders&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of shares of this Series 7 Class G</FONT>
<FONT size=3>Preferred Stock; and,</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junior to shares of this Series 7 Class G</FONT>
<FONT size=3>Preferred Stock, either as to dividends or</FONT>&nbsp;<FONT size=3><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon liquidation, if such class or series</FONT>
<FONT size=3>shall be Common Stock or if the holders of</FONT>&nbsp;<FONT size=3><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of this Series 7 Class G Preferred</FONT>
<FONT size=3>Stock shall be entitled to receipt of</FONT> <FONT size=3>dividends&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or of amounts distributable upon</FONT>
<FONT size=3>dissolution, liquidation or winding up of the</FONT> <FONT size=3>Corporation,<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
whether voluntary or involuntary,</FONT> <FONT size=3>as the case may be, in preference or priority</FONT>
<FONT size=3>to the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;holders of shares of such class or</FONT>
<FONT size=3>series.</FONT></P>
<P><FONT size=3><b><u>Part 7 - Amendment and Reissue</u></b>.</FONT></P><P><FONT size=3>7.1&nbsp;&nbsp;<b><u>Amendment</u></b>. If any proposed amendment to the
Corporation's</FONT> <FONT size=3>Certificate of Incorporation (the "Articles") would
alter</FONT> <FONT size=3>or change the powers, preferences or special rights of
the</FONT> <FONT size=3>Series 7 Class G Preferred Stock so as to affect such</FONT>
<FONT size=3>adversely, then the Corporation must obtain the
affirmative</FONT> <FONT size=3>vote of such amendment to the Articles at a duly called
and</FONT> <FONT size=3>held series meeting of the holders of the Series 7 Class
G</FONT> <FONT size=3>Preferred Stock then outstanding. Notwithstanding the
above</FONT> <FONT size=3>or the provisions of the GCL, the number of authorized
shares</FONT> <FONT size=3>of any class or classes of stock of the Corporation may
be</FONT> <FONT size=3>increased or decreased (but not below the number of
shares thereof outstanding) by the affirmative vote of the holders of a</FONT></P>
<FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P align="center"><FONT size=3>-8-</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P><FONT size=3>majority of the stock of the Corporation entitled
to</FONT> <FONT size=3>vote thereon, voting together as a single class, irrespective</FONT>
<FONT size=3>of the provisions of this Section 7.1 or Section 242 of
the</FONT> <FONT size=3>GCL.</FONT></P>
<P><FONT size=3>7.2&nbsp;&nbsp;<b><u>Authorized</u></b>. Any shares of Series 7 Class G
Preferred</FONT> <FONT size=3>Stock acquired by the Corporation by reason of
purchase,</FONT> <FONT size=3>conversion, redemption or otherwise shall be retired
and</FONT> <FONT size=3>shall become authorized but unissued shares of
Preferred</FONT> <FONT size=3>Stock, which may be reissued as part of a new series
of</FONT> <FONT size=3>Preferred Stock hereafter created.</FONT></P>
<FONT size=3><BR
WP="BR1"><BR WP="BR2"><BR WP="BR1"><BR WP="BR2"></FONT>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P><FONT size=3>-9-</FONT></P>
<P>&nbsp;</P>
<P><font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 10:00 AM 11/26/1997<br>
&nbsp;&nbsp;971405163 - 2249849</font>&nbsp;</P>
<P align="center"><FONT size=3><b>CERTIFICATE OF ELIMINATION<br>
OF<br>
SERIES 4 CLASS D CONVERTIBLE PREFERRED STOCK<br>
AND<br>
SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
____________________________________________</b></FONT></P>
<FONT
size=3><BR WP="BR1"></FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation</FONT> <FONT
size=3>organized and existing under the General Corporation Law of
the</FONT> <FONT
size=3>State of Delaware (hereinafter called the "Corporation"),
hereby</FONT> <FONT
size=3>certifies the following:</FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of Series 4 Class
D</FONT> <FONT size=3>Convertible Preferred Stock of the Corporation (the "Series
4</FONT> <FONT size=3>Preferred") was filed on June 11, 1997 (the "Series 4
Certificate</FONT> <FONT size=3>of Designations").</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 4
Preferred</FONT> <FONT size=3>have been delivered to the Company and exchanged upon
agreement</FONT> <FONT size=3>with the holder thereof pursuant to the terms and conditions of
a</FONT> <FONT size=3>certain Exchange Agreement between the Company and RBB
Bank</FONT> <FONT size=3>Aktiengesellschaft, dated effective as of September 16,
1997.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 4 Preferred remain
outstanding.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 4 Preferred which have
been</FONT> <FONT size=3>exchanged have the status of authorized and unissued shares of
the</FONT> <FONT size=3>Preferred Stock of the Corporation without designation as
to</FONT> <FONT size=3>series, until such shares are once more designated as part of
a</FONT> <FONT size=3>particular series by the Board of Directors.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That effective September 16, 1997, the Board of
Directors</FONT> <FONT size=3>of the Company duly adopted the following
resolutions:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange</FONT>
<FONT size=3>with the holder of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Series 4 Class D</FONT>
<FONT size=3>Convertible Preferred Stock, no authorized</FONT> <FONT size=3>shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Series 4 Class D Convertible</FONT>
<FONT size=3>Preferred Stock will remain outstanding&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and no</FONT>
<FONT size=3>shares of Series 4 Class D Convertible</FONT> <FONT size=3>Preferred Stock will be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued subject to the</FONT>
<FONT size=3>Certificate of Designations previously filed</FONT> <FONT size=3>with&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;respect to the Series 4 Class D</FONT>
<FONT size=3>Convertible Preferred Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the</FONT>
<FONT size=3>exchange, the officers&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the
Company are</FONT> <FONT size=3>hereby authorized and directed, for and on</FONT>
<FONT size=3>behalf of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company, to execute and deliver</FONT>
<FONT size=3>an appropriate Certificate of Elimination to</FONT>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Secretary of State of Delaware regarding</FONT>
<FONT size=3>the Series 4 Class D Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred</FONT>
<FONT size=3>Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of the Series
5</FONT> <FONT size=3>Class E Convertible Preferred Stock of the Corporation (the
"Series</FONT> <FONT size=3>5 Preferred") was filed on July 14, 1997 (the "Series 5
Certificate</FONT> <FONT size=3>of Designations").</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 5
Preferred</FONT> <FONT size=3>have been delivered to the Company and exchanged upon
agreement</FONT> <FONT size=3>with the holder thereof pursuant to the terms and conditions of
a</FONT> <FONT size=3>certain Exchange Agreement between the Company and The
Infinity</FONT> <FONT size=3>Fund, L.P., dated effective as of September&nbsp;16,
1997.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 5 Preferred remain
outstanding.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 5 Preferred which have
been</FONT> <FONT size=3>exchanged have the status of authorized and unissued shares of
the</FONT> <FONT size=3>Preferred Stock of the Corporation without designation as
to</FONT> <FONT size=3>series, until such shares are once more designated as part of
a</FONT> <FONT size=3>particular series by the Board of Directors.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;That effective September 16, 1997, the Board of
Directors</FONT> <FONT size=3>of the Company duly adopted the following
resolutions:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange</FONT>
<FONT size=3>with the holder of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Series 5 Class E</FONT>
<FONT size=3>Convertible Preferred Stock, no authorized</FONT> <FONT size=3>shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Series 5 Class E Convertible</FONT>
<FONT size=3>Preferred Stock will remain outstanding&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and no</FONT>
<FONT size=3>shares of Series 5 Class E Convertible</FONT> <FONT size=3>Preferred Stock will be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued subject to the</FONT>
<FONT size=3>Certificate of Designations previously filed</FONT> <FONT size=3>with&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;respect to the Series 5 Class E</FONT>
<FONT size=3>Convertible Preferred Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the</FONT>
<FONT size=3>exchange, the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;officers of the Company are</FONT>
<FONT size=3>hereby authorized and directed, for and on</FONT>&nbsp;<FONT size=3><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;behalf of the Company, to execute and deliver</FONT>
<FONT size=3>an appropriate Certificate&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Elimination to</FONT>
<FONT size=3>the Secretary of State of Delaware regarding</FONT> <FONT size=3>the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series 5 Class E Convertible Preferred</FONT>
<FONT size=3>Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;That pursuant to the provisions of Section 151(g) of
the</FONT> <FONT size=3>Delaware General Corporation Law, upon the effective date of
the</FONT> <FONT size=3>filing of this Certificate, this Certificate will have the
effect</FONT> <FONT size=3>of eliminating from the Restated Certificate of Incorporation
only</FONT> <FONT size=3>those matters set forth in the Restated Certificate
of</FONT> <FONT size=3>Incorporation with respect to the Series 4 Class D
Convertible</FONT> <FONT size=3>Preferred Stock and the Series 5 Class E Convertible
Preferred</FONT> <FONT size=3>Stock.</FONT></P>
<P>&nbsp;</P>
<P align="center"><FONT size=3>-2-</FONT></P>&nbsp;
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, this Certificate of Elimination has
been</FONT> <FONT size=3>executed this 20th day of November, 1997, by the President of
the</FONT> <FONT size=3>Company.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL<br>
ATTEST:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SERVICES, INC.</FONT></P>
<FONT size=3><BR WP="BR1"><BR
WP="BR2">/s/ Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
____________________________&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;____________________________<br>
Richard T. Kelecy, Secretary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F.
Centofanti,<br>
</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>President</FONT>
<p><FONT size=3><BR WP="BR1"><BR
WP="BR2"></FONT>
<P><FONT size=3>(SEAL)</FONT></P>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P align="center"><FONT size=3>-3-</FONT></P>&nbsp;
<p><font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
&nbsp;&nbsp;FILED 12:00 PM 07/10/1998<br>
&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;981268436 - 2249849</font>&nbsp;</p>
<p>&nbsp;</p>
<P align=center><FONT size=3><B>CERTIFICATE OF DESIGNATIONS<br>
OF RIGHTS AND PREFERENCES OF THE<br>
SERIES 10 CLASS J CONVERTIBLE PREFERRED STOCK
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.</B></FONT></P>
<P><FONT size=3><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We, being respectively the President and Secretary of
Perma-Fix</FONT> <FONT size=3>Environmental Services, Inc. a corporation organized and
existing</FONT> <FONT size=3>under the laws of the State of Delaware (hereinafter
the</FONT> <FONT size=3>"Corporation"), DO HEREBY CERTIFY:</FONT></P>
<P><FONT size=3><b>FIRST:</b></FONT></P>
<P><FONT size=3>That pursuant to authority expressly granted and vested in
the</FONT> <FONT size=3>Board of Directors of said Corporation under Section 151 of
the</FONT> <FONT size=3>Delaware General Corporation Law (the "GCL"), and the provisions
of</FONT> <FONT size=3>the Corporation's Restated Certificate of Incorporation, said
Board</FONT> <FONT size=3>of Directors, on June 30th, 1998 (the "Closing Date"), adopted
the</FONT> <FONT size=3>following resolution setting forth the designations,
powers,</FONT> <FONT size=3>preferences and rights of its Series 10 Class J
Convertible</FONT> <FONT size=3>Preferred Stock (the "Certificate of
Designations").</FONT></P>
<P><FONT size=3><b>RESOLVED:</b> That the designations, powers, preferences and rights
of</FONT> <FONT size=3>the Series 10 Class J Convertible Preferred Stock be, and
they</FONT> <FONT size=3>hereby are, as set forth below:</FONT></P>
<P><FONT size=3>1.&nbsp;&nbsp;&nbsp;&nbsp;<b>Number of Shares of Common Stock of Series 10 Class
J</b></FONT><b> <FONT size=3>Convertible Preferred Stock</FONT></b></P>
<P><FONT size=3>The Corporation hereby authorizes the issuance of up to
3,000</FONT> <FONT size=3>(three thousand,) shares of Series 10 Class J Convertible
Preferred</FONT> <FONT size=3>Stock par value $.001 per share (the "Preferred Stock").
This</FONT> <FONT size=3>Preferred Stock shall pay an annual dividend based on a 365
day</FONT> <FONT size=3>calendar year of 4% of the Liquidation Value (as defined in
Section</FONT> <FONT size=3>3 hereof) ("Dividend Rate"), payable semiannually within ten
(10)</FONT> <FONT size=3>business days after each subsequent June 30th and December
31st</FONT> <FONT size=3>(each a "Dividend Declaration Date"), and shall be payable in
cash</FONT> <FONT size=3>or shares of the Corporation's par value $.001 per share
common</FONT> <FONT size=3>stock (Common Stock) at the Corporation's option. The
first</FONT> <FONT size=3>Dividend Declaration Date shall be December 31st,
1998.</FONT></P>
<P><FONT size=3>In the event that the Corporation elects to pay the
accrued</FONT> <FONT size=3>dividends due as of a Dividend Declaration Date on the
outstanding</FONT> <FONT size=3>shares of Preferred Stock in Common Stock of the Corporation,
the</FONT> <FONT size=3>Holder of each share of Preferred Stock shall receive that
number</FONT> <FONT size=3>of shares of Common Stock equal to the product of (a) the
quotient</FONT> <FONT size=3>of (i) the Dividend Rate divided by (ii) the average of'
the</FONT> <FONT size=3>closing bid quotation of the Corporation's Common Stock as
reported</FONT> <FONT size=3>on the National Association of Securities Dealers
Automated</FONT> <FONT size=3>Quotation system ("NASDAQ"), or if the Common Stock is not
listed for trading on the NASDAQ</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;1</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>but is listed for trading on a
national</FONT> <FONT size=3>securities exchange, the average closing bid price of the
Common</FONT> <FONT size=3>Stock as quoted on such national exchange, for the five (5)
trading</FONT> <FONT size=3>days immediately prior to the Dividend Declaration Date (the
"Stock</FONT> <FONT size=3>Dividend Price"), times (b) a fraction, the numerator of which
is</FONT> <FONT size=3>the number of days elapsed during the period for which the
dividend</FONT> <FONT size=3>is to be paid, and the denominator of which is 365. Dividends
on</FONT> <FONT size=3>the Preferred Stock shall be cumulative, and no dividends or
other</FONT> <FONT size=3>distributions shall be paid or declared or set aside for payment
on</FONT> <FONT size=3>the Corporation's Common Stock until all accrued and
unpaid</FONT> <FONT size=3>dividends on all outstanding shares of Preferred Stock shall
have</FONT> <FONT size=3>been paid or declared and set aside for payment.</FONT></P>
<FONT
size=3>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Voting</b>.</FONT>
<P><FONT size=3>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as provided under Section 242 of the GCL, holders
of</FONT> <FONT size=3>Preferred Stock (the "Holders") shall not have the right to
vote</FONT> <FONT size=3>on any matter. Notwithstanding the provisions of Section 242
of</FONT> <FONT size=3>the GCL or Section 4 hereof, the number of authorized shares of
any</FONT> <FONT size=3>class or classes of stock of the Corporation may be increased
or</FONT> <FONT size=3>decreased (but not below the number of shares thereof
outstanding)</FONT> <FONT size=3>by the affirmative vote of the holders of a majority of the
stock</FONT> <FONT size=3>of the Corporation entitled to vote thereon, voting together as
a</FONT> <FONT size=3>single class, irrespective of the provisions of Section 242 of
the</FONT> <FONT size=3>GCL.</FONT></P>
<P><FONT size=3>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Liquidation</b>.</FONT></P>
<P><FONT size=3>In the event of a voluntary or involuntary
dissolution,</FONT> <FONT size=3>liquidation, or winding up of the Corporation, the Holders
of</FONT> <FONT size=3>Preferred Stock shall be entitled to receive out of the assets
of</FONT> <FONT size=3>the Corporation legally available for distribution to holders
of</FONT> <FONT size=3>its capital stock, before any payment or distribution shall be
made</FONT> <FONT size=3>to holders of shares of Common Stock or any other class of
stock</FONT> <FONT size=3>ranking junior to the Preferred Stock, an amount per share
of</FONT> <FONT size=3>Preferred Stock equal to $1,000 (the "Liquidation Value") plus
any</FONT> <FONT size=3>accrued and unpaid dividends on the Preferred Stock. If upon
such</FONT> <FONT size=3>liquidation, dissolution, or winding up of the Corporation,
whether</FONT> <FONT size=3>voluntary or involuntary, the assets to be distributed among
the</FONT> <FONT size=3>Holders of Preferred Stock shall be insufficient to permit
payment</FONT> <FONT size=3>to the Holders of Preferred Stock of the amount distributable
as</FONT> <FONT size=3>aforesaid, then the entire assets of the Corporation to be
so</FONT> <FONT size=3>distributed shall be distributed ratably among the Holders
of</FONT> <FONT size=3>Preferred Stock and shares of such other classes or series
ranking</FONT> <FONT size=3>on a parity with the shares of this Preferred Stock in
proportion</FONT> <FONT size=3>to the full distributable amounts for which holders of all
such</FONT> <FONT size=3>parity shares are entitled upon such distribution, liquidation,
or</FONT> <FONT size=3>winding up. Upon any such liquidation, dissolution or winding
up</FONT> <FONT size=3>of the Corporation, after the Holders of Preferred Stock
shall</FONT> <FONT size=3>have been paid in full the amounts to which they shall be
entitled,</FONT> <FONT size=3>the remaining net assets of the Corporation may be distributed
to</FONT> <FONT size=3>the holders of stock ranking on liquidation junior to the
Preferred</FONT> <FONT size=3>Stock and the Holders of the Preferred Stock shall have no right
or</FONT> <FONT size=3>claim to any of the remaining assets of the Corporation.
Written</FONT> <FONT size=3>notice of such liquidation, dissolution or winding up, stating
a</FONT> <FONT size=3>payment date, the amount of the liquidation payments and the
place</FONT></P>
&nbsp;
<P align="center"><FONT size=3>;2</FONT></P>&nbsp;
<P><FONT size=3>where said liquidation payments shall be payable, shall be given
by</FONT> <FONT size=3>mail, postage prepaid or by telex or facsimile to non-U.S.</FONT>
<FONT size=3>residents, not less than 10 days prior to the payment date
stated</FONT> <FONT size=3>therein, to the Holders of record of Preferred Stock, such
notice</FONT> <FONT size=3>to be addressed to each such Holder at its address as shown by
the</FONT> <FONT size=3>records of the Corporation. For purposes hereof the shares
of</FONT> <FONT size=3>Common Stock, shall rank on liquidation junior to the
Preferred</FONT> <FONT size=3>Stock.</FONT></P>
<P><FONT size=3>4.&nbsp;&nbsp;<b>&nbsp;Restrictions</b>.</FONT></P>
<P><FONT size=3>The Corporation will not amend or modify the terms of its
Restated</FONT> <FONT size=3>Certificate of Incorporation so as to adversely alter or change
the</FONT> <FONT size=3>Preferred Stock at any time when shares of Preferred Stock
are</FONT> <FONT size=3>outstanding, without the approval of the Holders of at least
a</FONT> <FONT size=3>majority of the then outstanding shares of Preferred Stock given
in</FONT> <FONT size=3>writing or by vote at a meeting, consenting or voting (as the
case</FONT> <FONT size=3>may be) separately as a series, except where the vote or
written</FONT> <FONT size=3>consent of the Holders of a greater number of shares of
Common</FONT> <FONT size=3>Stock of the Corporation is required by law or by the
Corporation's</FONT> <FONT size=3>Certificate of Incorporation, as amended.</FONT></P>
<P><FONT size=3>5. <b> Optional Conversion</b>.</FONT></P>
<P><FONT size=3>The Holders of shares of Preferred Stock shall have the
following</FONT> <FONT size=3>conversion rights to convert the shares of Preferred Stock
into</FONT> <FONT size=3>shares of Common Stock of the Corporation:</FONT></P>
<P><FONT size=3>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Conversion Dates,</b> The Holder of any share or shares
of</FONT> <FONT size=3>Preferred Stock may convert cumulatively any of such
Preferred</FONT> <FONT size=3>Stock at any time subsequent to 180 days after the Closing
Date.</FONT></P>
<P><FONT size=3>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Right to Convert; Conversion
Price</b>. Subject to the
terms</FONT> <FONT size=3>hereof, as used herein, the term Conversion Price per
outstanding</FONT> <FONT size=3>share of Preferred Stock shall be One Dollar and 875/1000
($1.875);</FONT> <FONT size=3>except that after the expiration of one hundred and eighty
(180)</FONT> <FONT size=3>days after the Closing Date if the average of the closing bid
price</FONT> <FONT size=3>per share of Common Stock quoted on the NASDAQ (or the closing
bid</FONT> <FONT size=3>price of the Common Stock as quoted on the national
securities</FONT> <FONT size=3>exchange if the Common Stock is not listed for trading on
the</FONT> <FONT size=3>NASDAQ but is listed for trading on a national securities
exchange)</FONT> <FONT size=3>for the five (5) trading days immediately prior to the
particular</FONT> <FONT size=3>date of each Conversion Notice (as defined below) is less than
Two</FONT> <FONT size=3>Dollars and 34/100 ($2.34), then the Conversion Price for
that</FONT> <FONT size=3>particular conversion shall be eighty percent (80%) of the
average of the closing bid price of the Common Stock on the NASDAQ (or
if</FONT> <FONT size=3>the Common Stock is not listed for trading on the NASDAQ but
is</FONT> <FONT size=3>listed for trading on a national securities exchange then
eighty</FONT> <FONT size=3>percent (80%) of the average of the closing bid price of the
Common</FONT> <FONT size=3>Stock on the national securities exchange) for the five (5)
trading</FONT> <FONT size=3>days immediately prior to the particular date of the
Conversion</FONT> <FONT size=3>Notice. If any of the outstanding shares of Preferred Stock
are</FONT> <FONT size=3>converted, in whole or in part, into Common Stock pursuant to
the</FONT> <FONT size=3>terms of this Section 5(b), the number of shares of whole
Common</FONT> <FONT size=3>Stock to be issued to the Holder as a result of such
conversion shall be determined by dividing (a) the aggregate Stated Value of</FONT></P>
<P><FONT size=3><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;3</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P><FONT size=3>the Preferred Stock so surrendered for conversion by (b)
the</FONT> <FONT size=3>Conversion Price in effect on the date of that
particular</FONT> <FONT size=3>Conversion Notice relating to such conversion. At the time
of</FONT> <FONT size=3>conversion of shares of the Preferred Stock, the Corporation
shall</FONT> <FONT size=3>pay in cash to the holder thereof an amount equal to all unpaid
and</FONT> <FONT size=3>accrued dividends, if any, accrued thereon on the shares
of</FONT> <FONT size=3>Preferred so converted to the date of the Conversion
Notice</FONT> <FONT size=3>relating to such conversion, or, at the Corporation's option,
in</FONT> <FONT size=3>lieu of paying cash for the accrued and unpaid dividends,
issue</FONT> <FONT size=3>that number of shares of whole Common Stock which is equal to
the</FONT> <FONT size=3>quotient of the amount of such unpaid and accrued dividends to
the</FONT> <FONT size=3>date of the Conversion Notice relating to such conversion of
the</FONT> <FONT size=3>shares of Preferred Stock so converted divided by the
Stock</FONT> <FONT size=3>Dividend Price, in effect at the date of the Conversion
Notice</FONT> <FONT size=3>relating to such conversion.</FONT></P>
<P><FONT size=3>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Conversion Notice</b>. The right of conversion shall be
exercised</FONT> <FONT size=3>by the Holder thereof by telecopying or faxing an executed
and</FONT> <FONT size=3>completed written notice signed by an authorized representative
of</FONT> <FONT size=3>the Holder, ("Conversion Notice") to the Corporation that
the</FONT> <FONT size=3>Holder elects to convert a specified number of shares of
Preferred</FONT> <FONT size=3>Stock representing a specified Stated Value thereof into shares
of</FONT> <FONT size=3>Common Stock and by delivering by express courier the
certificate</FONT> <FONT size=3>or certificates of Preferred Stock being converted to
the</FONT> <FONT size=3>Corporation at its principal office (or such other office or
agency</FONT> <FONT size=3>of the Corporation as the Corporation may designate by notice
in</FONT> <FONT size=3>writing to the Holders of the Preferred Stock). The business
date</FONT> <FONT size=3>indicated on a Conversion Notice which is telecopied to
and</FONT> <FONT size=3>received by the Corporation in accordance with the
provisions</FONT> <FONT size=3>hereof shall be deemed a Conversion Date. The Conversion
Notice</FONT> <FONT size=3>shall include therein the Stated Value of shares of Preferred
Stock</FONT> <FONT size=3>to be converted, and a calculation (a) of the Stock Dividend
Price,</FONT> <FONT size=3>(b) the Conversion Price, and (c) the number of Shares of
Common</FONT> <FONT size=3>Stock to be issued in connection with such conversion.
The</FONT> <FONT size=3>Corporation shall have the right to review the
calculations</FONT> <FONT size=3>included in the Conversion Notice, and shall provide notice of
any</FONT> <FONT size=3>discrepancy or dispute therewith within three (3) business days
of</FONT> <FONT size=3>the receipt thereof. The Holder shall deliver to the
Corporation</FONT> <FONT size=3>an original Conversion Notice and the original Preferred to
be</FONT> <FONT size=3>converted within three (3) business days from the date of
the</FONT> <FONT size=3>Conversion Notice.</FONT></P>
<P><FONT size=3>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Issuance of Certificates - Time Conversion
Effected</b>.&nbsp; Promptly, but in no event more than six (6) business days,
after</FONT> <FONT size=3>the receipt by facsimile of the Conversion Notice referred to
in</FONT> <FONT size=3>Subparagraph (5)(c); and provided within the six (6) business
days</FONT> <FONT size=3>the Corporation receives the certificate or certificates for
the</FONT> <FONT size=3>shares of Preferred Stock to be converted, the Corporation
shall</FONT> <FONT size=3>issue and deliver, or cause to be issued and delivered, to
the</FONT> <FONT size=3>Holder, registered in the name of the Holder, a certificate
or</FONT> <FONT size=3>certificates for the number of whole shares of Common Stock
into</FONT> <FONT size=3>which such shares of Preferred Stock are converted.
Such</FONT> <FONT size=3>conversion shall be deemed to have been effected as of the close
of</FONT> <FONT size=3>business on the date on which the telecopy or facsimile
Conversion</FONT> <FONT size=3>Notice shall have been received by the Corporation, and the
rights</FONT> <FONT size=3>of the Holder of such share or shares of Preferred Stock
shall</FONT> <FONT size=3>cease, at such time, and the Holder or Holders shall be deemed
to</FONT> <FONT size=3>have become the Holder or Holders of record of the shares of
Common</FONT> <FONT size=3>Stock represented thereby.&nbsp; In the event that
the shares of Common Stock issuable upon conversion of the Preferred, is</FONT></P>
&nbsp;
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;4</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P><FONT size=3>not delivered within six
(6)</FONT> <FONT size=3>business days of the date the Company receives the
Conversion</FONT> <FONT size=3>Notice, the Company shall pay to the Buyer, by wire transfer,
as</FONT> <FONT size=3>liquidated damages for such failure and not as a penalty, for
each</FONT> <FONT size=3>$100,000 of Preferred sought to be converted, $500 for each of
the</FONT> <FONT size=3>first five (5) calendar days and $1,000 per calendar day
thereafter</FONT> <FONT size=3>that the shares of Common Stock are not delivered, which
liquidated</FONT> <FONT size=3>damages shall begin to run from the seventh (7th) business
day</FONT> <FONT size=3>after the Conversion Date. Any and all payments required
pursuant</FONT> <FONT size=3>to this paragraph shall be payable only in cash.
Notwithstanding</FONT> <FONT size=3>the above, liquidated damages shall not exceed $2,000.00 per
day.</FONT> <FONT size=3>In addition to the liquidated damages set forth herein, in
the</FONT> <FONT size=3>event the Company fails to deliver the shares of Common
Stock</FONT> <FONT size=3>within six (6) business days after the Conversion date, the
Company</FONT> <FONT size=3>agrees to issue the larger number of shares of Common Stock
derived</FONT> <FONT size=3>from (i) the original Conversion Notice, or (ii) utilizing the
five</FONT> <FONT size=3>lowest closing bid prices of the Company's shares of Common
Stock</FONT> <FONT size=3>beginning on the Conversion Date and ending on the day the
shares</FONT> <FONT size=3>of Common Stock are delivered. The Company understands that
a</FONT> <FONT size=3>delay in the issuance of the shares of Common Stock could result
in</FONT> <FONT size=3>economic loss to the Holder. Nothing contained herein, or in
the</FONT> <FONT size=3>Preferred shall limit the Holder's rights to pursue actual
damages</FONT> <FONT size=3>for the Company's failure to issue and deliver shares of
Common</FONT> <FONT size=3>Stock to the Holder in accordance with the terms of the
Certificate</FONT> <FONT size=3>of Designations, and this Agreement.</FONT></P>
<P><FONT size=3>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Fractional Shares of Common
Stock</b>. No fractional shares
of</FONT> <FONT size=3>Common Stock shall be issued upon conversion of any Preferred
Stock</FONT> <FONT size=3>into shares of Common Stock. All fractional shares of Common
Stock</FONT> <FONT size=3>shall be aggregated and then rounded down to the nearest
whole</FONT> <FONT size=3>share of Common Stock. In case the number of shares of
Preferred</FONT> <FONT size=3>Stock represented by the certificate or certificates
surrendered</FONT> <FONT size=3>pursuant to Subparagraph 5(b) exceeds the number of shares
of</FONT> <FONT size=3>Common Stock converted, the Corporation shall, upon
such</FONT> <FONT size=3>conversion, execute and deliver to the Holder, at the expense
of</FONT> <FONT size=3>the Corporation, a new certificate or certificates for the
number</FONT> <FONT size=3>of shares of Preferred Stock represented by the certificate
or</FONT> <FONT size=3>certificates surrendered which are not to be
converted.</FONT></P>
<P><FONT size=3>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Merger or Consolidation</b>. In case of either (a) any merger
or</FONT> <FONT size=3>consolidation to which the Corporation is a party
(collectively,</FONT> <FONT size=3>the "Merger"), other than a Merger in which the Corporation is
the</FONT> <FONT size=3>surviving or continuing corporation, or (b) any sale or
conveyance</FONT> <FONT size=3>to another corporation of all, or substantially all, of the
assets</FONT> <FONT size=3>of the Corporation (collectively, the "Sale"), and such Merger
or</FONT> <FONT size=3>Sale becomes effective (x) while any shares of Preferred Stock
are</FONT> <FONT size=3>outstanding and prior to the date that the
Corporation's</FONT> <FONT size=3>Registration Statement covering all the shares of Common
Stock</FONT> <FONT size=3>issuable upon the conversion of the Preferred Stock is
declared</FONT> <FONT size=3>effective by the U.S. Securities and Exchange
Commission</FONT> <FONT size=3>("Commission"), the Corporation or such successor corporation
as</FONT> <FONT size=3>the case may be, shall make appropriate provision so that
the</FONT> <FONT size=3>Holder of each share of Preferred Stock then outstanding shall
have</FONT> <FONT size=3>the right to convert such share of Preferred Stock into the
kind</FONT> <FONT size=3>and amount of shares of stock or other securities and
property</FONT> <FONT size=3>receivable upon such Merger or Sale by a holder of the number
of</FONT> <FONT size=3>shares of Common Stock into which such shares of Preferred
Stock</FONT> <FONT size=3>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 Section 5.</FONT></P>
<FONT size=3><BR WP="BR1"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;5</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P><FONT size=3>In the event of a Merger or Sale, where the Corporation is not
the</FONT> <FONT size=3>surviving Corporation, the Holder shall have the right to
redeem</FONT> <FONT size=3>all of the outstanding shares of Preferred Stock at 120% of
the</FONT> <FONT size=3>Liquidation Value of each share of Preferred Stock then
outstanding</FONT> <FONT size=3>plus all accrued and unpaid dividends (the "Redemption
Amount").</FONT>&nbsp; <FONT size=3>The Corporation shall pay this Redemption Amount in cash within
ten</FONT> <FONT size=3>(10) business days of receipt by the Corporation of notice from
the</FONT> <FONT size=3>Holder, and receipt by the Corporation of all outstanding shares
of</FONT> <FONT size=3>Preferred Stock duly endorsed by the Holder to the
Corporation.</FONT></P>
<P><FONT size=3>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Adjustments to Conversion Price for Stock Dividends and
for</b></FONT><b> </b><FONT size=3><b>Combinations or Subdivisions of Common
Stock</b>. If the
Corporation</FONT> <FONT size=3>at any time or from time to time while shares of Preferred
Stock</FONT> <FONT size=3>are issued and outstanding shall declare or pay, any dividend
on the Common Stock payable in Common Stock, or shall effect
a</FONT> <FONT size=3>subdivision of the outstanding shares of Common Stock into
a</FONT> <FONT size=3>greater number of shares of Common Stock (by stock
split,</FONT> <FONT size=3>reclassification or otherwise than by payment of a dividend
in</FONT> <FONT size=3>Common Stock), or if the outstanding shares of Common Stock
shall</FONT> <FONT size=3>be combined or consolidated, by reclassification or otherwise,
into</FONT> <FONT size=3>a lesser number of shares of Common Stock, then the
Conversion</FONT> <FONT size=3>Price in effect immediately before such event shall,
concurrently</FONT> <FONT size=3>with the effectiveness of such event, be proportionately
decreased</FONT> <FONT size=3>or increased, as appropriate.</FONT></P>
<P><FONT size=3>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Adjustments for Reclassification and
Reorganization</b>.&nbsp;&nbsp;If</FONT> <FONT size=3>the Common Stock issuable upon conversion of the Preferred
Stock</FONT> <FONT size=3>shall be changed into the same or a different number of shares
of</FONT> <FONT size=3>Common Stock of any other class or classes of stock, whether
by</FONT> <FONT size=3>capital reorganization, reclassification or otherwise (other
than</FONT> <FONT size=3>a subdivision or combination or shares of Common Stock provided
for</FONT> <FONT size=3>in Section 5(g) hereof), the Conversion Price then in effect
shall,</FONT> <FONT size=3>concurrently with the effectiveness of such reorganization
or</FONT> <FONT size=3>reclassification, be proportionately adjusted so that the
Preferred</FONT> <FONT size=3>Stock shall be convertible into, in lieu of the number of shares
of</FONT> <FONT size=3>Common Stock which the holders of Preferred Stock would
otherwise</FONT> <FONT size=3>have been entitled to receive, a number of shares of Common
Stock</FONT> <FONT size=3>of such other class or classes of stock equivalent to the number
of</FONT> <FONT size=3>shares of Common Stock that would have been subject to receipt
by</FONT> <FONT size=3>the holders upon conversion of the Preferred Stock
immediately</FONT> <FONT size=3>before that change.</FONT></P>
<P><FONT size=3>6.&nbsp;&nbsp;&nbsp;&nbsp;<b>Assignment</b>.</FONT></P>
<P><FONT size=3>Subject to all applicable restrictions on transfer, the
rights</FONT> <FONT size=3>and obligations of the Corporation and the Holder of
the</FONT> <FONT size=3>Preferred Stock shall be binding upon and benefit the
successors,</FONT> <FONT size=3>assigns, heirs, administrators, and transferees of the
parties.</FONT></P>
&nbsp;
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;6</FONT></P>&nbsp;
<p>&nbsp;</p>
<p><FONT size=3><b>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of Common Stock to be
Reserved</b>.</FONT>
</p>
<P><FONT size=3>The Corporation, upon the effective date of this Certificate
of</FONT> <FONT size=3>Designations, has a sufficient number of shares of Common
Stock</FONT> <FONT size=3>available to reserve for issuance upon the conversion of
all</FONT> <FONT size=3>outstanding shares of Preferred Stock, pursuant to the terms
and</FONT> <FONT size=3>conditions set forth in Section 5, and exercise of the Warrants
as</FONT> <FONT size=3>defined in Section 11. The Corporation will at all times
reserve</FONT> <FONT size=3>and keep available out of its authorized shares of Common
Stock,</FONT> <FONT size=3>solely for the purpose of issuance upon the conversion of
Preferred</FONT> <FONT size=3>Stock, and exercise of the Warrants, as herein provided,
such</FONT> <FONT size=3>number of shares of Common Stock as shall then be issuable upon
the</FONT> <FONT size=3>conversion of all outstanding shares of Preferred Stock,
and</FONT> <FONT size=3>exercise of the Warrants. The Corporation covenants that
all</FONT> <FONT size=3>shares of Common Stock which shall be so issued shall be duly
and</FONT> <FONT size=3>validly issued, fully paid and non assessable. The
Corporation</FONT> <FONT size=3>will take such action as may be required, if the total number
of</FONT> <FONT size=3>shares of Common Stock issued and issuable after such action
upon</FONT> <FONT size=3>conversion of the Preferred Stock, and exercise of the
Warrants</FONT> <FONT size=3>would exceed the total number of shares of Common Stock
then</FONT> <FONT size=3>authorized by the Corporation's Certificate of Incorporation,
as</FONT> <FONT size=3>amended, or would exceed 19.99% of the shares of Common Stock
then</FONT> <FONT size=3>outstanding if required by law or the Rules and Regulations
of</FONT> <FONT size=3>NASDAQ or the National Securities Exchange applicable to
the</FONT> <FONT size=3>Corporation to take such action as a result of exceeding
such</FONT> <FONT size=3>19.99%, in order to increase the number of shares of Common
Stock</FONT> <FONT size=3>to permit the Corporation to issue the number of shares of
Common</FONT> <FONT size=3>Stock required to effect conversion of the Preferred, and
exercise</FONT> <FONT size=3>of the Warrants, to a number sufficient to permit conversion of
the</FONT> <FONT size=3>Preferred Stock, and exercise of the Warrants, including,
without limitation, engaging in reasonable efforts to obtain the
requisite</FONT> <FONT size=3>stockholder approval of any necessary amendment to
the</FONT> <FONT size=3>Corporation's Restated Certificate of Incorporation, and to
obtain</FONT> <FONT size=3>shareholders approval in order to effect conversion of
the</FONT> <FONT size=3>Preferred Stock, and exercise of the Warrants, if required by
law</FONT> <FONT size=3>or the rules or regulations of the NASDAQ or National
Securities</FONT> <FONT size=3>Exchange applicable to the Corporation.</FONT></P>
<P><FONT size=3><b>7(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Approval</b>. In connection with the issuance to
the</FONT> <FONT size=3>Holder of the shares of Preferred Stock, pursuant to
this</FONT> <FONT size=3>Certificate of Designations, the Corporation is also issuing
(i)</FONT> <FONT size=3>certain warrants ("RBB Warrants") to the Holder pursuant to
the</FONT> <FONT size=3>terms of that certain Private Securities Subscription
Agreement</FONT> <FONT size=3>dated June 30th, 1998 (the "Agreement"), providing for the
purchase</FONT> <FONT size=3>of up to 150,000 shares of Common Stock at an exercise price
of</FONT> <FONT size=3>$2.50 per share and (ii) certain warrants (collectively,
the</FONT> <FONT size=3>&quot;Liviakis Warrants") to Liviakis Financial Communication,
Inc.</FONT> <FONT size=3>(&quot;Liviakis&quot;) and Robert B. Prag providing for the purchase of up
to</FONT> <FONT size=3>an aggregate of 2,500,000 shares of Common Stock at an
exercise</FONT> <FONT size=3>price of $1.875 per share pursuant to the terms of that
Placement</FONT> <FONT size=3>and Consulting Agreement dated June 30th, 1998, between
Liviakis</FONT> <FONT size=3>and the Corporation.</FONT></P>
<P><FONT size=3>If (i) the aggregate number of shares of Common Stock issued by
the</FONT> <FONT size=3>Corporation as a result of any or all of the following:
(a)</FONT> <FONT size=3>conversion of the Preferred Stock, (b) payment of dividends
accrued</FONT> <FONT size=3>on the Preferred Stock (c) exercise of the RBB Warrants, and
(d)</FONT> <FONT size=3>exercise of the Liviakis Warrants exceeds 2,388,347 shares
of</FONT> <FONT size=3>Common Stock (which equals 19.9% of the outstanding shares
of</FONT> Common Stock of the<FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;7</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"></FONT>
<P><FONT size=3>the Corporation as of the date of this
Certificate</FONT> <FONT size=3>of Designations) and (ii) the Holder has converted or elects
to</FONT> <FONT size=3>convert any of the then outstanding shares of Preferred
Stock</FONT> <FONT size=3>pursuant to the terms of this Section 5 at a Conversion Price
less</FONT> <FONT size=3>than $1.875 ($1.875 the market value per share of Common Stock
as</FONT> <FONT size=3>quoted on the NASDAQ as of the close of business on June
30th,</FONT> <FONT size=3>1998) pursuant to the terms of Section 5(b) hereof, other than
if</FONT> <FONT size=3>the Conversion Price is less than $1.875 solely as a result of
the</FONT> <FONT size=3>anti-dilution provisions of Section 5(g) and (h) hereof,
then,</FONT> <FONT size=3>notwithstanding anything in Section 5 to the contrary,
the</FONT> <FONT size=3>Corporation shall not issue any shares of Common Stock as a
result</FONT> <FONT size=3>of receipt of a Conversion Notice unless and until the
Corporation</FONT> <FONT size=3>shall have obtained approval of its shareholders entitled to
vote</FONT> <FONT size=3>on the transactions in accordance with subparagraphs
(25)(H)(i)d,</FONT> <FONT size=3>(iv) and (v) of Rule 4310 of the NASDAQ Marketplace
Rules</FONT> <FONT size=3>("Shareholder Approval").</FONT></P>
<P><FONT size=3>If Shareholder Approval is required as set forth in the
above</FONT> <FONT size=3>paragraph, the Corporation shall take all necessary steps to
obtain</FONT> <FONT size=3>such Shareholder Approval upon receipt of the Conversion
Notice</FONT> <FONT size=3>triggering the need for Shareholder Approval ("Current
Conversion</FONT> <FONT size=3>Notice"). If the Corporation has not received from the Holder
a</FONT> <FONT size=3>Current Conversion Notice, the Holder, subsequent to January
1st,</FONT> <FONT size=3>1999 may, if the Corporation's shares of Common Stock
trade,</FONT> <FONT size=3>subsequent to January 1st, 1999, at a five (5) day average
closing</FONT> <FONT size=3>bid price below Two Dollars and 34/00 ($2.34), upon written
notice</FONT> <FONT size=3>to the Corporation, require the Corporation to obtain
Shareholder</FONT> <FONT size=3>Approval ("Holder's Notice"). The Holder and the
Corporation's</FONT> <FONT size=3>officers and directors covenant to vote all shares of Common
Stock</FONT> <FONT size=3>over which they have voting control in favour of
Shareholder</FONT> <FONT size=3>Approval. If the Corporation does not obtain Shareholder
Approval</FONT> <FONT size=3>within ninety (90) days of the earlier of the Corporation's
receipt</FONT> <FONT size=3>of (i) the Current Conversion Notice or (ii) the Holder's
Notice,</FONT> <FONT size=3>and the Holder has not breached its covenant to vote all shares
of</FONT> <FONT size=3>Common Stock over which they have voting control in favour
of</FONT> <FONT size=3>Shareholder Approval, the Corporation shall pay in cash to
the</FONT> <FONT size=3>Holder liquidated damages, in an amount of 4% per month of
the</FONT> <FONT size=3>Liquidation Value of each share of Preferred Stock
then</FONT> <FONT size=3>outstanding, commencing on the 91st day of the
Corporation's</FONT> <FONT size=3>receipt of the Holder's Current Conversion Notice, and
continuing</FONT> <FONT size=3>every thirty (30) days pro-rata until such time the
Corporation</FONT> <FONT size=3>receives Shareholder Approval.</FONT></P>
<P><b><FONT size=3>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Reissuance of Series 10 Class J Convertible
Preferred</FONT> <FONT size=3>Stock.</FONT></b></P>
<P><FONT size=3>Shares of Preferred Stock which are converted into shares of
Common</FONT> <FONT size=3>Stock as provided herein shall be retired and shall
become</FONT> <FONT size=3>authorized but unissued shares of Preferred Stock, which may
be</FONT> <FONT size=3>reissued as part of a new series of Preferred stock
hereafter</FONT> <FONT size=3>created.</FONT></P>
<P><FONT size=3><b>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Closing of Books.</b></FONT></P>
<P><FONT size=3>The Corporation will at no time close its transfer books
against</FONT> <FONT size=3>the transfer of any Preferred Stock or of any shares of
Common</FONT> <FONT size=3>Stock issued or issuable upon the conversion of any shares
of</FONT>&nbsp; Common Stock of</P>
<P>&nbsp;</P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;8</FONT></P>
&nbsp;
<p>&nbsp;</p>
<P><FONT size=3>Preferred Stock in any manner which interferes
with</FONT> <FONT size=3>the timely conversion of such Preferred Stock, except as
may</FONT> <FONT size=3>otherwise be required to comply with applicable securities
laws.</FONT></P>
<P><FONT size=3><b>10. No Preemptive Rights.</b></FONT></P>
<P><FONT size=3>The Preferred Stock shall not give its holders any
preemptive</FONT> <FONT size=3>rights to acquire any other securities issued by the
Corporation</FONT> <FONT size=3>at any time in the future.</FONT></P>
<P><FONT size=3><b>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definition of Shares.</b></FONT></P>
<P><FONT size=3>As used in this Certificate of Designations, the term "shares
of</FONT> <FONT size=3>Common Stock" shall mean and include the Corporation's
authorized</FONT> <FONT size=3>common stock, par value $.001, as constituted on the date of
filing</FONT> <FONT size=3>of these terms of the Preferred Stock, or in case of
any</FONT> <FONT size=3>reorganization, reclassification, or stock split of the
outstanding</FONT> <FONT size=3>shares of Common Stock thereof, the stock, securities or
assets</FONT> <FONT size=3>provided for hereof. The term "Warrants" as used herein shall
have</FONT> <FONT size=3>the same meaning as defined in Section 1 of the Private
Securities</FONT> <FONT size=3>Subscription Agreement, dated June 30th 1998, between the
Company</FONT> <FONT size=3>and RBB Bank Aktiengesellschaft.</FONT></P>
<P><FONT size=3>The said determination of the designations, preferences
and</FONT> <FONT size=3>relative, participating, optional or other rights, and
the</FONT> <FONT size=3>qualifications, limitations or restrictions thereof, relating
to</FONT> <FONT size=3>the Preferred Stock was duly made by the Board of
Directors</FONT> <FONT size=3>pursuant to the provisions of the Corporation's
Restated</FONT> <FONT size=3>Certificate of Incorporation and in accordance with the
provisions</FONT> <FONT size=3>of the Delaware General Corporation Law.</FONT></P>
<P><FONT size=3>IN WITNESS HEREOF, this Certificate of Designations has
been</FONT> <FONT size=3>signed by:</FONT></P>
<P><FONT size=3>Dr. Louis F. Centofanti, President on this 30th day of
June,</FONT> <FONT size=3>1998.</FONT></P>
<FONT size=3><BR WP="BR1"><BR WP="BR2">/s/ Louis Centofanti<br>
__________________________________________________<br>
President, Perma-Fix Environmental Services,
Inc.</FONT>
<p><FONT size=3>Richard Kelecy, Secretary on this 30th day of June,
1998</FONT>
<p><FONT size=3><BR WP="BR1"><BR WP="BR2">/s/ Richard T. Kelecy<br>
_________________________________________________<br>
Secretary, Perma-Fix Environmental Services,
Inc.</FONT>
<p><FONT size=3><BR WP="BR1"><BR WP="BR2"><BR WP="BR1"><BR
WP="BR2"></FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;;9</FONT></P>&nbsp;
<p>&nbsp;</p>
<p><font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 01:30 PM 07/16/1998<br>
&nbsp;&nbsp;&nbsp;&nbsp;981277755 - 2249849</font></p>
<P align="center"><FONT size=3><b>CERTIFICATE OF ELIMINATION<br>
OF<br>
SERIES 6 CLASS F CONVERTIBLE PREFERRED STOCK<br>
AND<br>
SERIES 7 CLASS G CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
____________________________________________</b></FONT></P>
&nbsp;
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation</FONT>
<FONT size=3>organized and existing under the General Corporation Law of
the</FONT> <FONT size=3>State of Delaware (hereinafter called the "Corporation"),
hereby</FONT> <FONT size=3>certifies the following:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of Series 6 Class
F</FONT> <FONT size=3>Convertible Preferred Stock of the Corporation (the "Series
6</FONT> <FONT size=3>Preferred") was filed with the Delaware Secretary of State
on</FONT> <FONT size=3>November 13, 1997 (the "Series 6 Certificate of
Designations").</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 6
Preferred</FONT> <FONT size=3>have been delivered to the Company and exchanged upon
agreement</FONT> <FONT size=3>with the holder thereof pursuant to the terms and conditions of
a</FONT> <FONT size=3>certain Second RBB Exchange Agreement between the Company and
RBB</FONT> <FONT size=3>Bank Aktiengesellschaft, dated effective as of February 28,
1998.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 6 Preferred remain
outstanding.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 6 Preferred which have
been</FONT> <FONT size=3>exchanged have the status of authorized and unissued shares of
the</FONT> <FONT size=3>Preferred Stock of the Corporation without designation as
to</FONT> <FONT size=3>series, until such shares are once more designated as part of
a</FONT> <FONT size=3>particular series by the Board of Directors.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That effective February 28, 1998, the Board of
Directors</FONT> <FONT size=3>of the Company duly adopted the following
resolutions:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange</FONT>
<FONT size=3>with the holder of<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Series 6 Class F</FONT>
<FONT size=3>Convertible Preferred Stock, no authorized</FONT> <FONT size=3>shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Series 6 Class F Convertible</FONT>
<FONT size=3>Preferred Stock will remain outstanding&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and no</FONT>
<FONT size=3>shares of Series 6 Class F Convertible</FONT> <FONT size=3>Preferred Stock will be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued subject to the</FONT>
<FONT size=3>Certificate of Designations previously filed</FONT> <FONT size=3>with&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;respect to the Series 6 Class F</FONT>
<FONT size=3>Convertible Preferred Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the</FONT>
<FONT size=3>exchange, the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;officers of the Company are</FONT>
<FONT size=3>hereby authorized and directed, for and&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on</FONT>
<FONT size=3>behalf of the Company, to execute and deliver</FONT> <FONT size=3>an appropriate&nbsp;</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificate of Elimination to</FONT>
<FONT size=3>the Secretary of State of Delaware&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;regarding</FONT>
<FONT size=3>the Series 6 Class F Convertible Preferred</FONT> <FONT size=3>Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of the Series
7</FONT> <FONT size=3>Class G Convertible Preferred Stock of the Corporation (the
"Series</FONT> <FONT size=3>7 Preferred") was filed on November 13, 1997 (the "Series
7</FONT> <FONT size=3>Certificate of Designations").</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 7
Preferred</FONT> <FONT size=3>have been delivered to the Company and exchanged upon
agreement</FONT> <FONT size=3>with the holder thereof pursuant to the terms and conditions of
a</FONT> <FONT size=3>certain Exchange Agreement between the Company and The
Infinity</FONT> <FONT size=3>Fund, L.P., dated effective as of February 28,
1998.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 7 Preferred remain
outstanding.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 7 Preferred which have
been</FONT> <FONT size=3>exchanged have the status of authorized and unissued shares of
the</FONT> <FONT size=3>Preferred Stock of the Corporation without designation as
to</FONT> <FONT size=3>series, until such shares are once more designated as part of
a</FONT> <FONT size=3>particular series by the Board of Directors.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;That effective February 28, 1998, the Board of
Directors</FONT> <FONT size=3>of the Company duly adopted the following
resolutions:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange</FONT>
<FONT size=3>with the holder of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Series 7 Class G</FONT>
<FONT size=3>Convertible Preferred Stock, no authorized</FONT> <FONT size=3>shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Series 7 Class G Convertible</FONT>
<FONT size=3>Preferred Stock will remain outstanding&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and no</FONT>
<FONT size=3>shares of Series 7 Class G Convertible</FONT> <FONT size=3>Preferred Stock will be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued subject to the</FONT>
<FONT size=3>Certificate of Designations previously filed</FONT> <FONT size=3>with&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;respect to the Series 7 Class G</FONT>
<FONT size=3>Convertible Preferred Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the</FONT>
<FONT size=3>exchange, the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;officers of the Company are</FONT>
<FONT size=3>hereby authorized and directed, for and on<br>
</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>behalf of the Company, to execute and deliver</FONT>
<FONT size=3>an appropriate Certificate&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Elimination to</FONT>
<FONT size=3>the Secretary of State of Delaware regarding</FONT> <FONT size=3>the Series 7&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class G Convertible Preferred</FONT>
<FONT size=3>Stock.</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That pursuant to the provisions of Section 151(g) of
the</FONT> <FONT size=3>Delaware General Corporation Law, upon the effective date of
the</FONT> <FONT size=3>filing of this Certificate, this Certificate will have the
effect</FONT> <FONT size=3>of eliminating from the Restated Certificate of Incorporation
only</FONT> <FONT size=3>those matters set forth in the Restated Certificate
of</FONT> <FONT size=3>Incorporation with respect to the Series 6 Class F
Convertible</FONT> <FONT size=3>Preferred Stock and the Series 7 Class G Convertible
Preferred</FONT> <FONT size=3>Stock.</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-2-</FONT></P>
<P>&nbsp;</P>
<P><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, this Certificate of Elimination has
been</font> <font size="3">executed this 30th day of April, 1998, by the President of
the</font> <font size="3">Company.</font></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL<br>
ATTEST:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SERVICES, INC.</FONT></P>
<FONT size=3><BR WP="BR1"><BR
WP="BR2">/s/ Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
____________________________
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________<br>
Richard T. Kelecy, Secretary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F.
Centofanti,<br>
</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>President</FONT>
<P><FONT size=3>(SEAL)</FONT></P><FONT size=3><BR WP="BR1"><BR WP="BR2"><BR
WP="BR1"><BR WP="BR2"><BR WP="BR1"><BR WP="BR2"></FONT>
<P align="center"><FONT size=3>-3-</FONT></P>&nbsp;
<p align="right"><font size="1">&nbsp;&nbsp;&nbsp;STATE OF DELAWARE<br>
&nbsp;&nbsp;&nbsp;SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 01:31 PM 07/16/1998<br>
&nbsp;&nbsp;&nbsp;&nbsp;981277757 - 2249849</font></p>
<P align="center"><FONT size=3><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 8 CLASS H CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></FONT></P>
<FONT
size=3><BR
WP="BR2"></FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Perma-Fix Environmental Services, Inc. (the "Corporation"),
a</FONT> <FONT
size=3>corporation organized and existing under the General
Corporation</FONT> <FONT
size=3>Law of the State of Delaware, does hereby
certify:</FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, pursuant to authority conferred upon by the Board
of</FONT> <FONT size=3>Directors by the Corporation's Restated Certificate
of</FONT> <FONT size=3>Incorporation, as amended, and pursuant to the provisions
of</FONT> <FONT size=3>Section 151 of the Delaware Corporation Law, the Board of
Directors</FONT> <FONT size=3>of the Corporation has adopted resolutions, a copy of which
is</FONT> <FONT size=3>attached hereto, establishing and providing for the issuance of
a</FONT> <FONT size=3>series of Preferred Stock designated as Series 8 Class
H</FONT> <FONT size=3>Convertible Preferred Stock and has established and fixed
the</FONT> <FONT size=3>voting powers, designations, preferences and relative</FONT>
<FONT size=3>participating, optional and other special rights and</FONT> <FONT size=3>qualifications, limitations and restrictions of such Series 8
Class</FONT> <FONT size=3>H Convertible Preferred Stock as set forth in the
attached</FONT> <FONT size=3>resolutions.</FONT></P>
<P><FONT size=3>Dated: April 30, 1998</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL<br>
</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>SERVICES, INC.</FONT></P>
<FONT size=3><BR WP="BR1"><BR
WP="BR2"><BR WP="BR1"></FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>By /s/ Louis Centofanti<br>
</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>___________________________<br>
</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>Dr. Louis F. Centofanti<br>
</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>Chairman of the Board</FONT>
<p><FONT size=3>ATTEST:</FONT>
<p><FONT size=3><BR WP="BR1"><BR WP="BR2">/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary</FONT>
<p>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P align="center"><FONT size=3><b>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</b></FONT></P>
<P align="center"><FONT size=3><b>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS,
PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 8 CLASS H CONVERTIBLE PREFERRED STOCK</b></FONT></P><FONT
size=3><BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>WHEREAS</b>, the Corporation's capital includes preferred
stock,</FONT> <FONT
size=3>par value $.001 per share ("Preferred Stock"), which
Preferred</FONT> <FONT
size=3>Stock may be issued in one or more series by resolutions adopted
by</FONT> <FONT
size=3>the directors, and with the directors being entitled by
resolution</FONT> <FONT
size=3>to fix the number of shares in each series and to designate
the</FONT> <FONT
size=3>rights, designations, preferences and relative,
participating,</FONT> <FONT
size=3>optional or other special rights and privileges, restrictions
and</FONT> <FONT
size=3>conditions attaching to the shares of each such
series;</FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>WHEREAS</b>, it is in the best interests of the Corporation
for</FONT> <FONT size=3>the Board to create a new series from the Preferred
Stock</FONT> <FONT size=3>designated as the Series 8 Class H Convertible Preferred Stock,
par</FONT> <FONT size=3>value $.001 per share (the "Series 8 Class H Preferred
Stock");</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>NOW, THEREFORE, BE IT RESOLVED,</b> that the Series 8 Class
H</FONT> <FONT size=3>Preferred Stock shall consist of two thousand five hundred
(2,500)</FONT> <FONT size=3>shares and no more and shall be designated as the Series 8 Class
H</FONT> <FONT size=3>Convertible Preferred Stock, and the preferences,
rights,</FONT> <FONT size=3>privileges, restrictions and conditions attaching to the Series
8</FONT> <FONT size=3>Class H Preferred Stock shall be as follows:</FONT></P>
<P><FONT size=3><b><u>Part 1 - Voting and Preemptive Rights</u>.</b></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u><b>Voting Rights</b></u>. Except as otherwise provided in
Part</FONT> <FONT size=3>7 hereof or under Section 242(b)(2) of the General</FONT>
<FONT size=3>Corporation Law of the State of Delaware (the "GCL"),
the</FONT> <FONT size=3>holders of the Series 8 Class H Preferred Stock shall</FONT>
<FONT size=3>have no voting rights whatsoever. To the extent that</FONT> <FONT size=3>under Section 242(b)(2) of the GCL or Part 7 hereof,
the</FONT> <FONT size=3>holders of the Series 8 Class H Preferred Stock are</FONT>
<FONT size=3>entitled to vote on a matter, each share of the Series
8</FONT> <FONT size=3>Class H Preferred Stock shall be entitled one (1)
vote</FONT> <FONT size=3>for each outstanding share of Series 8 Class H
Preferred</FONT> <FONT size=3>Stock. Holders of the Series 8 Class H Preferred
Stock</FONT> <FONT size=3>shall be entitled to notice of (and copies of proxy</FONT>
<FONT size=3>materials and other information sent to stockholders)
for</FONT> <FONT size=3>all shareholder meetings or written consents with
respect</FONT> <FONT size=3>to which they would be entitled to vote, which notice</FONT>
<FONT size=3>would be provided pursuant to the Corporation's
bylaws</FONT> <FONT size=3>and applicable statutes.</FONT></P>
<P><FONT size=3>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>No Preemptive Rights</u></b>. The Series 8 Class H</FONT>
<FONT size=3>Preferred Stock shall not give its holders any
preemptive</FONT> <FONT size=3>rights to acquire any other securities issued by the</FONT>
<FONT size=3>Corporation at any time in the future.</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-1-</FONT></P>&nbsp;
<P><FONT size=3><b><u>Part 2 - Liquidation Rights.</u></b></FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Liquidation</u></b>. If the Corporation shall be</FONT>
<FONT size=3>voluntarily or involuntarily liquidated, dissolved or</FONT> <FONT size=3>wound up at any time when any shares of the Series 8</FONT>
<FONT size=3>Class H Preferred Stock shall be outstanding, the
holders</FONT> <FONT size=3>of the then outstanding Series 8 Class H Preferred
Stock</FONT> <FONT size=3>shall have a preference in distribution of the</FONT> <FONT size=3>Corporation's property available for distribution to
theholders of the Corporation's Common Stock equal to
$1,000</FONT> <FONT size=3>consideration per outstanding share of Series 8 Class
H</FONT> <FONT size=3>Preferred Stock, plus an amount equal to all unpaid</FONT>
<FONT size=3>dividends accrued thereon to the date of payment of
such</FONT> <FONT size=3>distribution ("Liquidation Preference"), whether or
not</FONT> <FONT size=3>declared by the Board.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Payment of Liquidation
Preferences</u></b>. Subject to
the</FONT> <FONT size=3>provisions of Part 6 hereof, all amounts to be paid
as</FONT> <FONT size=3>Liquidation Preference to the holders of Series 8
Class</FONT> <FONT size=3>H Preferred Stock, as provided in this Part 2, shall
be</FONT> <FONT size=3>paid or set apart for payment before the payment or</FONT>
<FONT size=3>setting apart for payment of any amount for, or the</FONT> <FONT size=3>distribution of any of the Corporation's property to
the</FONT> <FONT size=3>holders of the Corporation's Common Stock, whether now
or</FONT> <FONT size=3>hereafter authorized, in connection with such</FONT> <FONT size=3>liquidation, dissolution or winding up.</FONT></P>
<P><FONT size=3>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>No Rights After Payment</u></b>. After the payment to the</FONT>
<FONT size=3>holders of the shares of the Series 8 Class H
Preferred</FONT> <FONT size=3>Stock of the full Liquidation Preference amounts
provided</FONT> <FONT size=3>for in this Part 2, the holders of the Series 8 Class
H</FONT> <FONT size=3>Preferred Stock as such shall have no right or claim
to</FONT> <FONT size=3>any of the remaining assets of the Corporation.</FONT></P>
<P><FONT size=3>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u><b>Assets Insufficient to Pay Full Liquidation</b></u></FONT><u><b>
</b></u><FONT size=3><u><b>Preference</b></u>. In the event that the assets of the</FONT>
<FONT size=3>Corporation available for distribution to the holders
of</FONT> <FONT size=3>shares of the Series 8 Class H Preferred Stock upon
any</FONT> <FONT size=3>dissolution, liquidation or winding up of the</FONT> <FONT size=3>Corporation, whether voluntary or involuntary, shall
be</FONT> <FONT size=3>insufficient to pay in full all amounts to which such</FONT>
<FONT size=3>holders are entitled pursuant to this Part 2, no such</FONT> <FONT size=3>distribution shall be made on account of any shares
of</FONT> <FONT size=3>any other class or series of Preferred Stock ranking
on</FONT> <FONT size=3>a parity with the shares of this Series 8 Class H</FONT> <FONT size=3>Preferred Stock upon such dissolution, liquidation or</FONT>
<FONT size=3>winding up unless proportionate distributive amounts</FONT> <FONT size=3>shall be paid on account of the shares of this Series
8</FONT> <FONT size=3>Class H Preferred Stock and shares of such other class
or</FONT> <FONT size=3>series ranking on a parity with the shares of this
Series</FONT> <FONT size=3>8 Class H Preferred Stock, ratably, in proportion to
the</FONT> <FONT size=3>full distributable amounts for which holders of all
such</FONT> <FONT size=3>parity shares are respectively entitled upon such</FONT>
<FONT size=3>dissolution, liquidation or winding up.</FONT></P>
<P><FONT size=3><b><u>Part 3 - Dividends</u></b>. The holders of the Series 8 Class
H</FONT> <FONT size=3>Preferred Stock are entitled to receive if, when and
as</FONT> <FONT size=3>declared by the Board out of funds legally available</FONT>
<FONT size=3>therefor, cumulative dividends, payable in cash or
Common</FONT> <FONT size=3>Stock of the Corporation, par value $.001 per share
(the</FONT> <FONT size=3>"Common Stock"), or any combination thereof, at the</FONT>
<FONT size=3>Corporation's election, at the rate of four percent
(4%) per annum of the Liquidation Value</FONT></P>
<P>&nbsp;</P>
<P><FONT size=3>-2-</FONT></P>&nbsp;
<P><FONT size=3>(as defined below)
of</FONT> <FONT size=3>each issued and outstanding share of Series 8 Class H</FONT>
<FONT size=3>Preferred Stock (the "Dividend Rate"). The
Liquidation</FONT> <FONT size=3>Value of the Series 8 Class H Preferred Stock shall
be</FONT> <FONT size=3>$1,000 per outstanding share of the Series 8 Class H</FONT>
<FONT size=3>Preferred Stock (the "Liquidation Value"). The
dividend</FONT> <FONT size=3>is payable semi-annually within seven (7) business
days</FONT> <FONT size=3>after each of December 31 and June 30 of each year,</FONT>
<FONT size=3>commencing June 30, 1998 (each, a "Dividend
Declaration</FONT> <FONT size=3>Date"). Dividends shall be paid only with respect to</FONT>
<FONT size=3>shares of Series 8 Class H Preferred Stock actually</FONT> <FONT size=3>issued and outstanding on a Dividend Declaration Date
and</FONT> <FONT size=3>to holders of record of the Series 8 Class H
Preferred</FONT> <FONT size=3>Stock as of the Dividend Declaration Date. Dividends</FONT>
<FONT size=3>shall accrue from the first day of the semi-annual
period</FONT> <FONT size=3>in which such dividend may be payable, except with</FONT>
<FONT size=3>respect to the first semi-annual dividend which shall</FONT> <FONT size=3>accrue from March 1, 1998. In the event that the</FONT>
<FONT size=3>Corporation elects to pay the accrued dividends due as
of</FONT> <FONT size=3>a Dividend Declaration Date on an outstanding share
of</FONT> <FONT size=3>the Series 8 Class H Preferred Stock in Common Stock
of</FONT> <FONT size=3>the Corporation, the holder of such share shall
receive</FONT> <FONT size=3>that number of shares of Common Stock of the
Corporation</FONT> <FONT size=3>equal to the product of (a) the quotient of (i) the</FONT>
<FONT size=3>Dividend Rate divided by (ii) the average of the
closing</FONT> <FONT size=3>bid quotation of the Corporation's Common Stock as</FONT>
<FONT size=3>reported on the National Association of Securities</FONT> <FONT size=3>Dealers Automated Quotation system ("NASDAQ"), or the</FONT>
<FONT size=3>average closing sale price if listed on a national</FONT> <FONT size=3>securities exchange, for the five (5) trading days</FONT>
<FONT size=3>immediately prior to the Dividend Declaration Date
(the</FONT> <FONT size=3>"Stock Dividend Price"), times (b) a fraction, the</FONT>
<FONT size=3>numerator of which is the number of days elapsed
during</FONT> <FONT size=3>the period for which the dividend is to be paid and
the</FONT> <FONT size=3>denominator of which is 365. Dividends on the Series
8</FONT> <FONT size=3>Class H Preferred Stock shall be cumulative, and no</FONT>
<FONT size=3>dividends or other distributions shall be paid or</FONT> <FONT size=3>declared or set aside for payment on the
Corporation's</FONT> <FONT size=3>Common Stock until all accrued and unpaid dividends
on</FONT> <FONT size=3>all outstanding shares of Series 8 Class H Preferred</FONT>
<FONT size=3>Stock shall have been paid or declared and set aside
for</FONT> <FONT size=3>payment.</FONT></P>
<P><FONT size=3><b><u>Part 4 - Conversion</u></b>. The holders of the Series 8
Class</FONT> <FONT size=3>H Preferred Stock shall have rights to convert the
shares</FONT> <FONT size=3>of Series 8 Class H Preferred Stock into shares of
the</FONT> <FONT size=3>Corporation's Common Stock, par value $.001 per share</FONT>
<FONT size=3>("Common Stock"), as follows (the "Conversion
Rights"):</FONT></P>
<P><FONT size=3>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Right to Convert</u></b>. The Series 8 Class H Preferred</FONT>
<FONT size=3>Stock shall be convertible into shares of Common Stock
at</FONT> <FONT size=3>any time.</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Conversion Price</u></b>. Subject to the terms hereof, as</FONT>
<FONT size=3>used herein, the Conversion Price per outstanding
share</FONT> <FONT size=3>of Series 8 Class H Preferred Stock shall be $1.8125,</FONT>
<FONT size=3>except that, in the event the average closing bid
price</FONT> <FONT size=3>per share of the Common Stock as reported on the
over-the-counter market, or the closing sale price if
listed</FONT> <FONT size=3>on a national securities exchange, for the five (5)</FONT>
<FONT size=3>trading days prior to the particular date of
conversion</FONT> <FONT size=3>shall be less than $2.265, the Conversion Price for
only</FONT> <FONT size=3>such particular conversion shall be the product of
the</FONT> <FONT size=3>average closing bid quotation of the Common Stock
as</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-3-</FONT></P>&nbsp;
<P><FONT size=3>reported on the over-the-counter market, or the
closing</FONT> <FONT size=3>sale price if listed on a national securities
exchange,</FONT> <FONT size=3>for the five (5) trading days immediately preceding
the</FONT> <FONT size=3>date of the Conversion Notice referred to in Section
4.3</FONT> <FONT size=3>below in connection with such conversion multiplied
by</FONT> <FONT size=3>eighty percent (80%). Notwithstanding the foregoing,
the</FONT> <FONT size=3>Conversion Price shall not be less than a minimum of
$.75</FONT> <FONT size=3>per share ("Minimum Conversion Price"), which Minimum</FONT>
<FONT size=3>Conversion Price shall be eliminated from and after</FONT> <FONT size=3>September 6, 1998. If any of the outstanding shares
of</FONT> <FONT size=3>Series 8 Class H Preferred Stock are converted, in
whole</FONT> <FONT size=3>or in part, into Common Stock pursuant to the terms
of</FONT> <FONT size=3>this Part 4, the number of shares of whole Common
Stock</FONT> <FONT size=3>to be issued to the holder as a result of such
conversion</FONT> <FONT size=3>shall be determined by dividing (a) the aggregate</FONT>
<FONT size=3>Liquidation Value of the Series 8 Class H Preferred
Stock</FONT> <FONT size=3>so surrendered for conversion by (b) the Conversion
Price</FONT> <FONT size=3>as of such conversion. At the time of conversion of</FONT>
<FONT size=3>shares of the Series 8 Class H Preferred Stock, the</FONT> <FONT size=3>Corporation shall pay in cash to the holder thereof
an</FONT> <FONT size=3>amount equal to all unpaid and accrued dividends, if
any,</FONT> <FONT size=3>accrued thereon to the date of conversion, or, at the</FONT>
<FONT size=3>Corporation's option, in lieu of paying cash for the</FONT> <FONT size=3>accrued and unpaid dividends, issue that number of
whole</FONT> <FONT size=3>shares of Common Stock which is equal to the quotient
of</FONT> <FONT size=3>the amount of such unpaid and accrued dividends to
the</FONT> <FONT size=3>date of conversion on the shares of Series 8 Class H</FONT>
<FONT size=3>Preferred Stock so converted divided by the Stock</FONT> <FONT size=3>Dividend Price, as defined in Part 3 hereof, in effect
at</FONT> <FONT size=3>the date of conversion.</FONT></P>
<P><FONT size=3>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Mechanics of Conversion</u></b>. Any holder of the Series</FONT>
<FONT size=3>8 Class H Preferred Stock who wishes to exercise its</FONT> <FONT size=3>Conversion Rights pursuant to Section 4.1 of this Part
4</FONT> <FONT size=3>must, if such shares are not being held in escrow by
the</FONT> <FONT size=3>Corporation's attorneys, surrender the certificate</FONT>
<FONT size=3>therefor at the principal executive office of the</FONT> <FONT size=3>Corporation, and give written notice, which may be
via</FONT> <FONT size=3>facsimile transmission, to the Corporation at such
office</FONT> <FONT size=3>that it elects to convert the same (the "Conversion</FONT>
<FONT size=3>Notice"). In the event that the shares of Series 8
Class</FONT> <FONT size=3>H Preferred Stock are being held in escrow by the</FONT>
<FONT size=3>Corporation's attorneys, no delivery of the
certificates</FONT> <FONT size=3>shall be required. The Corporation shall, within five</FONT>
<FONT size=3>(5) business days after receipt of an appropriate and</FONT> <FONT size=3>timely Conversion Notice (and certificate, if
necessary),</FONT> <FONT size=3>issue to such holder of Series 8 Class H Preferred
Stock</FONT> <FONT size=3>or its agent a certificate for the number of shares
of</FONT> <FONT size=3>Common Stock to which he shall be entitled; it being</FONT>
<FONT size=3>expressly agreed that until and unless the holder</FONT> <FONT size=3>delivers written notice to the Corporation to the</FONT>
<FONT size=3>contrary, all shares of Common Stock issuable upon</FONT> <FONT size=3>conversion of the Series 8 Class H Preferred Stock</FONT>
<FONT size=3>hereunder are to be delivered by the Corporation to a</FONT> <FONT size=3>party designated in writing by the holder in the</FONT>
<FONT size=3>Conversion Notice for the account of the holder and
such</FONT> <FONT size=3>shall be deemed valid delivery to the holder of such</FONT>
<FONT size=3>shares of Common Stock. Such conversion shall be
deemed</FONT> <FONT size=3>to have been made only after both the certificate for
the</FONT> <FONT size=3>shares of Series 8 Class H Preferred Stock to be</FONT> <FONT size=3>converted have been surrendered and the Conversion
Notice</FONT> <FONT size=3>is received by the Corporation (or in the event that
no</FONT> <FONT size=3>surrender of the Certificate is required, then only
upon</FONT> <FONT size=3>the receipt by the Corporation of the Conversion
Notice)</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-4-</FONT></P>&nbsp;
<P><FONT size=3>(the "Conversion Documents"), and the person or
entity</FONT> <FONT size=3>whose name is noted on the certificate evidencing
such</FONT> <FONT size=3>shares of Common Stock issuable upon such conversion</FONT>
<FONT size=3>shall be treated for all purposes as the record holder
of</FONT> <FONT size=3>such shares of Common Stock at and after such time.
In</FONT> <FONT size=3>the event that the Conversion Notice is sent via</FONT> <FONT size=3>facsimile transmission, the Corporation shall be
deemed</FONT> <FONT size=3>to have received such Conversion Notice on the first</FONT>
<FONT size=3>business day on which such facsimile Conversion Notice
is</FONT> <FONT size=3>actually received. If the Corporation fails to
deliver</FONT> <FONT size=3>to the holder or its agent the certificate
representing</FONT> <FONT size=3>the shares of Common Stock that the holder is entitled
to</FONT> <FONT size=3>receive as a result of such conversion of the Series
8</FONT> <FONT size=3>Class H Preferred Stock within seven (7) business
days</FONT> <FONT size=3>after receipt by the Corporation from the holder of
an</FONT> <FONT size=3>appropriate and timely Conversion Notice and
certificates</FONT> <FONT size=3>pursuant to the terms of this Section 4.3 ("Seven (7)</FONT>
<FONT size=3>Business Day Period"), then, upon the written demand
of</FONT> <FONT size=3>RBB Bank Aktiengesellschaft ("RBB Bank"), the holder
of</FONT> <FONT size=3>the Series 8 Class H Preferred Stock, for payment of
the</FONT> <FONT size=3>penalty described below in this Section 4.3, which
demand</FONT> <FONT size=3>must be received by the Corporation no later than ten</FONT>
<FONT size=3>(10) calendar days after the expiration of such Seven
(7)</FONT> <FONT size=3>Business Day Period, the Corporation shall pay to RBB</FONT>
<FONT size=3>Bank the following penalty for each business day
after</FONT> <FONT size=3>the Seven (7) Business Day Period until the
Corporation</FONT> <FONT size=3>delivers to the holder or its agent the certificate</FONT>
<FONT size=3>representing the shares of Common Stock that the
holder</FONT> <FONT size=3>is entitled to receive as a result of such
conversion:</FONT> <FONT size=3>business day eight (8) - U.S. $1,000; business day
nine</FONT> <FONT size=3>(9) - U.S. $2,000, and each business day thereafter
an</FONT> <FONT size=3>amount equal to the penalty due on the immediately</FONT>
<FONT size=3>preceding business day times two (2) until the</FONT> <FONT size=3>Corporation delivers to the holder or its agent the</FONT>
<FONT size=3>certificate representing the shares of Common Stock
that</FONT> <FONT size=3>the holder is entitled to receive as a result of such</FONT>
<FONT size=3>conversion.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Merger or Consolidation</u></b>. In case of either (a)
any</FONT> <FONT size=3>merger or consolidation to which the Corporation is a</FONT>
<FONT size=3>party (collectively, the "Merger"), other than a
Merger</FONT> <FONT size=3>in which the Corporation is the surviving or
continuing</FONT> <FONT size=3>corporation, or (b) any sale or conveyance to another</FONT>
<FONT size=3>corporation of all, or substantially all, of the
assets</FONT> <FONT size=3>of the Corporation (collectively, the "Sale"), and
such</FONT> <FONT size=3>Merger or Sale becomes effective (x) while any shares
of</FONT> <FONT size=3>Series 8 Class H Preferred Stock are outstanding and</FONT>
<FONT size=3>prior to the date that the Corporation's Registration</FONT> <FONT size=3>Statement covering up to 1,379,311 shares of Common
Stock</FONT> <FONT size=3>issuable upon the conversion of the Series 8 Class H</FONT>
<FONT size=3>Preferred Stock is declared effective by the U. S.</FONT> <FONT size=3>Securities and Exchange Commission or (y) prior to
the</FONT> <FONT size=3>end of the restriction periods in Section 4.1, then,
in</FONT> <FONT size=3>such event, the Corporation or such successor</FONT> <FONT size=3>corporation, as the case may be, shall make
appropriate</FONT> <FONT size=3>provision so that the holder of each share of Series
8</FONT> <FONT size=3>Class H Preferred Stock then outstanding shall have
the</FONT> <FONT size=3>right to convert such share of Series 8 Class H
Preferred</FONT> <FONT size=3>Stock into the kind and amount of shares of stock or</FONT>
<FONT size=3>other securities and property receivable upon such
Merger</FONT> <FONT size=3>or Sale by a holder of the number of shares of Common</FONT>
<FONT size=3>Stock into which such shares of Series 8 Class H</FONT> <FONT size=3>Preferred Stock could have been converted into</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-5-</FONT></P>&nbsp;
<P><FONT size=3>immediately prior to such Merger or Sale, subject to</FONT> <FONT size=3>adjustments which shall be as nearly equivalent as may
be</FONT> <FONT size=3>practicable to the adjustments provided for in this
Part</FONT> <FONT size=3>4.</FONT></P>
<P><FONT size=3>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u><b>Adjustments to Conversion Price for Stock
Dividends</b></u></FONT><u><b> </b></u><FONT size=3><u><b>and for Combinations or Subdivisions of Common
Stock</b></u>.
If</FONT> <FONT size=3>the Corporation at any time or from time to time
while</FONT> <FONT size=3>shares of Series 8 Class H Preferred Stock are issued
and</FONT> <FONT size=3>outstanding shall declare or pay, without
consideration,</FONT> <FONT size=3>any dividend on the Common Stock payable in Common
Stock,</FONT> <FONT size=3>or shall effect a subdivision of the outstanding
shares</FONT> <FONT size=3>of Common Stock into a greater number of shares of
Common</FONT> <FONT size=3>Stock (by stock split, reclassification or otherwise
than</FONT> <FONT size=3>by payment of a dividend in Common Stock or in any
right</FONT> <FONT size=3>to acquire Common Stock), or if the outstanding shares
of</FONT> <FONT size=3>Common Stock shall be combined or consolidated, by</FONT>
<FONT size=3>reclassification or otherwise, into a lesser number
of</FONT> <FONT size=3>shares of Common Stock, then the Conversion Price in</FONT>
<FONT size=3>effect immediately before such event shall,
concurrently</FONT> <FONT size=3>with the effectiveness of such event, be
proportionately</FONT> <FONT size=3>decreased or increased, as appropriate.</FONT>&nbsp;</P>
<P><FONT size=3>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Adjustments for Reclassification and
Reorganizatio</u></b>n.</FONT>&nbsp; <FONT size=3>If the Common Stock issuable upon conversion of the</FONT>
<FONT size=3>Series 8 Class H Preferred Stock shall be changed
into</FONT> <FONT size=3>the same or a different number of shares of any other</FONT>
<FONT size=3>class or classes of stock, whether by capital</FONT> <FONT size=3>reorganization, reclassification or otherwise (other
than</FONT> <FONT size=3>a subdivision or combination of shares provided for
in</FONT> <FONT size=3>Section 4.4 hereof), the Conversion Price shall,</FONT> <FONT size=3>concurrently with the effectiveness of such</FONT>
<FONT size=3>reorganization or reclassification, be
proportionately</FONT> <FONT size=3>adjusted so that the Series 8 Class H Preferred Stock</FONT>
<FONT size=3>shall be convertible into, in lieu of the number of</FONT> <FONT size=3>shares of Common Stock which the holders of Series 8</FONT>
<FONT size=3>Class H Preferred Stock would otherwise have been</FONT> <FONT size=3>entitled to receive, a number of shares of such other</FONT>
<FONT size=3>class or classes of stock equivalent to the number of</FONT> <FONT size=3>shares of Common Stock that would have been subject
to</FONT> <FONT size=3>receipt by the holders upon conversion of the Series
8</FONT> <FONT size=3>Class H Preferred Stock immediately before that
change.</FONT></P>
<P><FONT size=3>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Common Stock Duly Issued</u></b>. All Common Stock which</FONT>
<FONT size=3>may be issued upon conversion of Series 8 Class H</FONT> <FONT size=3>Preferred Stock will, upon issuance, be duly issued,</FONT>
<FONT size=3>fully paid and nonassessable and free from all taxes,</FONT> <FONT size=3>liens, and charges with respect to the issue
thereof.</FONT></P>
<P><FONT size=3>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Notice of Adjustments.</u></b> Upon the occurrence of
each</FONT> <FONT size=3>adjustment or readjustment of any Conversion Price</FONT>
<FONT size=3>pursuant to this Part 4, the Corporation, at its
expense,</FONT> <FONT size=3>within a reasonable period of time, shall compute
such</FONT> <FONT size=3>adjustment or readjustment in accordance with the
terms</FONT> <FONT size=3>hereof and prepare and furnish to each holder of
Series</FONT> <FONT size=3>8 Class H Preferred Stock a notice setting forth such</FONT>
<FONT size=3>adjustment or readjustment and showing in detail the</FONT> <FONT size=3>facts upon which such adjustment is based.</FONT></P>
&nbsp;
<P align="center"><FONT size=3>-6-</FONT></P>&nbsp;
<P><FONT size=3>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Issue Taxes</u></b>. The Corporation shall pay any and
all</FONT> <FONT size=3>issue and other taxes that may be payable in respect
of</FONT> <FONT size=3>any issue or delivery of shares of Common Stock on</FONT>
<FONT size=3>conversion of the Series 8 Class H Preferred Stock</FONT> <FONT size=3>pursuant thereto; provided, however, that the
Corporation</FONT> <FONT size=3>shall not be obligated to pay any transfer taxes</FONT>
<FONT size=3>resulting from any transfer requested by any holder
of</FONT> <FONT size=3>Series 8 Class H Preferred Stock in connection with
such</FONT> <FONT size=3>conversion.</FONT></P>
<P><FONT size=3>4.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Reservation of Stock Issuable Upon
Conversion</u></b>.
The</FONT> <FONT size=3>Corporation shall at all times reserve and keep
available</FONT> <FONT size=3>out of its authorized but unissued shares of Common</FONT>
<FONT size=3>Stock, solely for the purpose of effecting the
conversion</FONT> <FONT size=3>of the shares of the Series 8 Class H Preferred
Stock,</FONT> <FONT size=3>such number of its shares of Common Stock as shall,
from time to time, be sufficient to effect the conversion
of</FONT> <FONT size=3>all outstanding shares of the Series 8 Class H
Preferred</FONT> <FONT size=3>stock, and, if at any time, the number of authorized
but</FONT> <FONT size=3>unissued shares of Common Stock shall not be
sufficientto effect the conversion of all then outstanding
shares</FONT> <FONT size=3>of the Series 8 Class H Preferred Stock, the
Corporation</FONT> <FONT size=3>will take such corporate action as may be necessary
to</FONT> <FONT size=3>increase its authorized but unissued shares of Common</FONT>
<FONT size=3>Stock to such number of shares as shall be sufficient
for</FONT> <FONT size=3>such purposes, including, without limitation, engaging
in</FONT> <FONT size=3>reasonable efforts to obtain the requisite
stockholder</FONT> <FONT size=3>approval of any necessary amendment to its Certificate
of</FONT> <FONT size=3>Incorporation.</FONT></P>
<P><FONT size=3>4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Fractional Shares</u></b>. No fractional shares shall be</FONT>
<FONT size=3>issued upon the conversion of any share or shares of</FONT> <FONT size=3>Series 8 Class H Preferred Stock. All shares of
Common</FONT> <FONT size=3>Stock (including fractions thereof) issuable upon</FONT>
<FONT size=3>conversion of more than one share of Series 8 Class H</FONT> <FONT size=3>Preferred Stock by a holder thereof shall be
aggregated</FONT> <FONT size=3>for purposes of determining whether the conversion
would</FONT> <FONT size=3>result in the issuance of any fractional share. If,</FONT>
<FONT size=3>after the aforementioned aggregation, the conversion</FONT> <FONT size=3>would result in the issuance of a fractional share
of</FONT> <FONT size=3>Common Stock, such fractional share shall be rounded
up</FONT> <FONT size=3>to the nearest whole share.</FONT></P>
<P><FONT size=3>4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Notices</u></b>. Any notices required by the provisions
of</FONT> <FONT size=3>this Part 4 to be given to the holders of shares of</FONT>
<FONT size=3>Series 8 Class H Preferred Stock shall be deemed given
if</FONT> <FONT size=3>deposited in the United States mail, postage prepaid,
and</FONT> <FONT size=3>addressed to each holder of record at his address</FONT>
<FONT size=3>appearing on the books of the Corporation.</FONT></P>
<P><FONT size=3>4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Business Day</u></b>. As used herein, the term "business</FONT>
<FONT size=3>day" shall mean any day other than a Saturday, Sunday
or</FONT> <FONT size=3>a day when the federal and state banks located in the</FONT>
<FONT size=3>State of New York are required or is permitted to
close.</FONT></P>
<P><FONT size=3><b><u>Part 5 - Redemption</u></b>.</FONT></P>
<P><FONT size=3>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Redemption at Corporation's
Option</u></b>. Except as</FONT> <FONT size=3>otherwise provided in this Section 5.1, at any time,
and</FONT> <FONT size=3>from time to time, after the expiration of one (1)
year</FONT> <FONT size=3>from June 9, 1997, the Corporation may, at its sole</FONT>
<FONT size=3>option, but shall not be obligated to, redeem, in
whole</FONT>&nbsp;<FONT size=3><BR WP="BR2"></FONT></P>
<P>&nbsp;</P>
<P align="center"><FONT size=3>-7-</FONT></P>&nbsp;
<P>&nbsp;</P>
<P><FONT size=3>or in part, at any time, and from time to time, the
then</FONT> <FONT size=3>outstanding Series 8 Class H Preferred Stock at the</FONT>
<FONT size=3>following cash redemption prices per share (the</FONT> <FONT size=3>"Redemption Price") if redeemed during the following</FONT>
<FONT size=3>periods: (a) within four years from June 9, 1997 -
$1,300</FONT> <FONT size=3>per share, if at any time during such four year
period</FONT> <FONT size=3>the average of the closing bid price of the Common
Stock</FONT> <FONT size=3>for ten consecutive trading days shall be in excess
of</FONT> <FONT size=3>Four Dollars ($4.00) per share, and (b) after four
years</FONT> <FONT size=3>from June 9, 1997 - $1,000 per share.</FONT></P>
<P><FONT size=3>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Mechanics of Redemption</u></b>. Thirty days prior to any</FONT>
<FONT size=3>date stipulated by the Corporation for the redemption
of</FONT> <FONT size=3>Series 8 Class H Preferred Stock (the "Redemption
Date"),</FONT> <FONT size=3>written notice (the "Redemption Notice") shall be
mailed</FONT> <FONT size=3>to each holder of record on such notice date of the</FONT>
<FONT size=3>Series 8 Class H Preferred Stock. The Redemption
Notice</FONT> <FONT size=3>shall state: (i) the Redemption Date of such shares,
(ii)</FONT> <FONT size=3>the number of Series 8 Class H Preferred Stock to be</FONT>
<FONT size=3>redeemed from the holder to whom the Redemption Notice
is</FONT> <FONT size=3>addressed, (iii) instructions for surrender to the</FONT>
<FONT size=3>Corporation, in the manner and at the place
designated,</FONT> <FONT size=3>of a share certificate or share certificates
representing</FONT> <FONT size=3>the number of Series 8 Class H Preferred Stock to be</FONT>
<FONT size=3>redeemed from such holder, and (iv) instructions as
to</FONT> <FONT size=3>how to specify to the Corporation the number of Series
8</FONT> <FONT size=3>Class H Preferred Stock to be redeemed as provided in</FONT>
<FONT size=3>this Part 5 and, if the Redemption Notice is mailed
to</FONT> <FONT size=3>the Holder after the first 180 days from the date of</FONT>
<FONT size=3>issuance of the Series 8 Class H Preferred Stock, the</FONT> <FONT size=3>number of shares to be converted into Common Stock as</FONT>
<FONT size=3>provided in Part 4 hereof.</FONT></P>
<P><FONT size=3>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Rights of Conversion Upon
Redemption</u></b>. If the</FONT> <FONT size=3>redemption occurs after the first 180 days after the</FONT>
<FONT size=3>first issuance of Series 8 Class H Preferred Stock,
then,</FONT> <FONT size=3>upon receipt of the Redemption Notice, any holder of</FONT>
<FONT size=3>Series 8 Class H Preferred Stock shall have the
option,</FONT> <FONT size=3>at its sole election, to specify what portion of its</FONT>
<FONT size=3>Series 8 Class H Preferred Stock called for redemption
in</FONT> <FONT size=3>the Redemption Notice shall be redeemed as provided
in</FONT> <FONT size=3>this Part 5 or converted into Common Stock in the
manner</FONT> <FONT size=3>provided in Part 4 hereof, except that,
notwithstanding</FONT> <FONT size=3>any provision of such Part 4 to the contrary, such
holder</FONT> <FONT size=3>shall have the right to convert into Common Stock
that</FONT> <FONT size=3>number of Series 8 Class H Preferred Stock called for</FONT>
<FONT size=3>redemption in the Redemption Notice.</FONT></P>
<P><FONT size=3>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Surrender of Certificates. On or before the</FONT>
<FONT size=3>Redemption Date in respect of any Series 8 Class H</FONT> <FONT size=3>Preferred Stock, each holder of such shares shall</FONT>
<FONT size=3>surrender the required certificate or certificates</FONT> <FONT size=3>representing such shares to the Corporation in the
manner</FONT> <FONT size=3>and at the place designated in the Redemption Notice,
and</FONT> <FONT size=3>upon the Redemption Date, the Redemption Price for
such</FONT> <FONT size=3>shares shall be made payable, in the manner provided
in</FONT> <FONT size=3>Section 5.6 hereof, to the order of the person whose
name</FONT> <FONT size=3>appears on such certificate or certificates as the
owner</FONT> <FONT size=3>thereof, and each surrendered share certificate shall
be</FONT> <FONT size=3>canceled and retired. If a share certificate is</FONT> <FONT size=3>surrendered and all the shares evidenced thereby are
not being redeemed (as</FONT></P>
&nbsp;
<p>&nbsp;</p>
<P align="center"><FONT size=3>-8-</FONT></P>&nbsp;
<P><FONT size=3>described below), the Corporation</FONT> <FONT size=3>shall cause the Series 8 Class H Preferred Stock
which</FONT> <FONT size=3>are not being redeemed to be registered in the names
of</FONT> <FONT size=3>the persons or entity whose names appear as the owners
on</FONT> <FONT size=3>the respective surrendered share certificates and
deliver</FONT> <FONT size=3>such certificate to such person.</FONT></P>
<P><FONT size=3>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Payment</u></b>. On the Redemption Date in respect of any</FONT>
<FONT size=3>Series 8 Class H Preferred Stock or prior thereto,
the</FONT> <FONT size=3>Corporation shall deposit with any bank or trust
company</FONT> <FONT size=3>having a capital and surplus of at least $50,000,000,
as</FONT> <FONT size=3>a trust fund, a sum equal to the aggregate Redemption</FONT>
<FONT size=3>Price of all such shares called from redemption (less
the</FONT> <FONT size=3>aggregate Redemption Price for those Series 8 Class H</FONT>
<FONT size=3>Preferred Stock in respect of which the Corporation
has</FONT> <FONT size=3>received notice from the holder thereof of its
election</FONT> <FONT size=3>to convert Series 8 Class H Preferred Stock into
Common</FONT> <FONT size=3>Stock), with irrevocable instructions and authority
to</FONT> <FONT size=3>the bank or trust company to pay, on or after the</FONT> <FONT size=3>Redemption Date, the Redemption Price to the
respective</FONT> <FONT size=3>holders upon the surrender of their share
certificates.</FONT></P>
<P><FONT size=3>The deposit shall constitute full payment for the
shares</FONT> <FONT size=3>to their holders, and from and after the date of the</FONT>
<FONT size=3>deposit the redeemed shares shall be deemed to be no</FONT> <FONT size=3>longer outstanding, and holders thereof shall cease to
be</FONT> <FONT size=3>shareholders with respect to such shares and shall
have</FONT> <FONT size=3>no rights with respect thereto except the rights to</FONT>
<FONT size=3>receive from the bank or trust company payments of
the</FONT> <FONT size=3>Redemption Price of the shares, without interest,
upon</FONT> <FONT size=3>surrender of their certificates thereof. Any funds so</FONT>
<FONT size=3>deposited and unclaimed at the end of one year
following</FONT> <FONT size=3>the Redemption Date shall be released or repaid to
the</FONT> <FONT size=3>Corporation, after which the former holders of shares</FONT>
<FONT size=3>called for redemption shall be entitled to receive</FONT> <FONT size=3>payment of the Redemption Price in respect of their</FONT>
<FONT size=3>shares only from the Corporation.</FONT></P>
<P><b><u><FONT size=3>Part 6 - Parity with Other Shares of Series 8 Class H</FONT>
<FONT size=3>Preferred Stock and Priority.</FONT></u></b></P>
<P><FONT size=3>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Rateable Participation</u></b>. If any cumulative
dividends</FONT> <FONT size=3>or return of capital in respect of Series 8 Class H</FONT>
<FONT size=3>Preferred Stock are not paid in full, the owners of
all</FONT> <FONT size=3>series of outstanding Preferred Stock shall
participate</FONT> <FONT size=3>rateably in respect of accumulated dividends and
return</FONT> <FONT size=3>of capital.</FONT></P>
<P><FONT size=3>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Ranking</u></b>. For purposes of this resolution, any
stock</FONT> <FONT size=3>of any class or series of the Corporation shall be
deemed</FONT> <FONT size=3>to rank:</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior or senior to the shares of this</FONT>
<FONT size=3>Series 8 Class H Preferred Stock either</FONT> <FONT size=3>as to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or upon liquidation, if</FONT>
<FONT size=3>the holders of such class or classes</FONT> <FONT size=3>shall be entitled&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the receipt of</FONT>
<FONT size=3>dividends or of amounts distributable</FONT> <FONT size=3>upon dissolution, liquidation&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or winding</FONT>
<FONT size=3>up of the Corporation, whether voluntary</FONT> <FONT size=3>or involuntary, as the case&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;may be, in</FONT>
<FONT size=3>preference or priority to the holders of</FONT> <FONT size=3>shares of this Series 8 Class&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H Preferred</FONT>
<FONT size=3>Stock;</FONT></P>
&nbsp;
<p>&nbsp;</p>
<P align="center"><FONT size=3>-9-</FONT></P>&nbsp;
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a parity with, or equal to, shares of</FONT>
<FONT size=3>this Series 8 Class H Preferred Stock,</FONT> <FONT size=3>either&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as to dividends or upon</FONT>
<FONT size=3>liquidation, whether or not the dividendrates, dividend&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payment dates, or</FONT>
<FONT size=3>redemption or liquidation prices per</FONT> <FONT size=3>share or sinking fund&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provisions, if any,</FONT>
<FONT size=3>are different from those of this Series 8</FONT> <FONT size=3>Class H Preferred Stock,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the holders</FONT>
<FONT size=3>of such stock are entitled to the receipt</FONT> <FONT size=3>of dividends or of amounts&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;distributable</FONT>
<FONT size=3>upon dissolution, liquidation or winding</FONT> <FONT size=3>up of the Corporation,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether voluntary</FONT>
<FONT size=3>or involuntary, in proportion to their</FONT> <FONT size=3>respective dividend rates&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or liquidation</FONT>
<FONT size=3>prices, without preference or priority,</FONT> <FONT size=3>one over the other, as between&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the</FONT>
<FONT size=3>holders of such stock and over the other,</FONT> <FONT size=3>as between the holders of such stock&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and</FONT>
<FONT size=3>the holders of shares of this Series 8</FONT> <FONT size=3>Class H Preferred Stock; and,</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junior to shares of this Series 8 Class H</FONT>
<FONT size=3>Preferred Stock, either as to dividends</FONT> <FONT size=3>or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon liquidation, if such class or</FONT>
<FONT size=3>series shall be Common Stock or if the</FONT> <FONT size=3>holders&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of shares of this Series 8 Class</FONT>
<FONT size=3>H Preferred Stock shall be entitled to receipt of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or of amounts
distributable upon dissolution,</FONT> <FONT size=3>liquidation or winding up&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the</FONT>
<FONT size=3>Corporation, whether voluntary or</FONT> <FONT size=3>involuntary, as the case may be, in</FONT>&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>preference or priority to the holders of</FONT>
<FONT size=3>shares of such class or series.</FONT></P>
&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P align="center"><FONT size=3>-10-</FONT></P>&nbsp;
<P><FONT size=3><b><u>Part 7 - Amendment and Reissue</u></b>.</FONT></P>
<P><FONT size=3>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Amendment.</u></b> If any proposed amendment to the</FONT>
<FONT size=3>Corporation's Certificate of Incorporation (the</FONT> <FONT size=3>"Articles") would alter or change the powers,
preferences</FONT> <FONT size=3>or special rights of the Series 8 Class H Preferred
Stock</FONT> <FONT size=3>so as to affect such adversely, then the Corporation
must</FONT> <FONT size=3>obtain the affirmative vote of such amendment to the</FONT>
<FONT size=3>Articles at a duly called and held series meeting of
the</FONT> <FONT size=3>holders of the Series 8 Class H Preferred Stock or</FONT>
<FONT size=3>written consent by the holders of a majority of the</FONT> <FONT size=3>Series 8 Class H Preferred Stock then outstanding.</FONT>&nbsp;
<FONT size=3>Notwithstanding the above or the provisions of
Section</FONT> <FONT size=3>242(b)(2) of the GCL, the number of authorized shares
of</FONT> <FONT size=3>any class or classes of stock of the Corporation may
be</FONT> <FONT size=3>increased or decreased (but not below the number of</FONT>
<FONT size=3>shares thereof outstanding) by the affirmative vote
of</FONT> <FONT size=3>the holders of a majority of the stock of the
Corporation</FONT> <FONT size=3>entitled to vote thereon, voting together as a single</FONT>
<FONT size=3>class, irrespective of the provisions of this Section
7.1</FONT> <FONT size=3>or Section 242(b)(2) of the GCL.</FONT></P>
<P><FONT size=3>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Authorized</u></b>. Any shares of Series 8 Class H</FONT>
<FONT size=3>Preferred Stock acquired by the Corporation by reason
of</FONT> <FONT size=3>purchase, conversion, redemption or otherwise shall
be</FONT> <FONT size=3>retired and shall become authorized but unissued
shares</FONT> <FONT size=3>of Preferred Stock, which may be reissued as part of
a</FONT> <FONT size=3>new series of Preferred Stock hereafter created.</FONT></P>
&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P align="center"><FONT size=3>-11-</FONT></P>&nbsp;
<p>&nbsp;</p>
<P align="center"><FONT size=3><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 9 CLASS I CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></FONT></P>
<FONT
size=3><BR WP="BR1"></FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3>Perma-Fix Environmental Services, Inc. (the "Corporation"),
a</FONT> <FONT
size=3>corporation organized and existing under the General
Corporation</FONT> <FONT
size=3>Law of the State of Delaware, does hereby
certify:</FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That, pursuant to authority conferred upon by the Board
of</FONT> <FONT size=3>Directors by the Corporation's Restated Certificate
of</FONT> <FONT size=3>Incorporation, as amended, and pursuant to the provisions
of</FONT> <FONT size=3>Section 151 of the Delaware Corporation Law, the Board of
Directors</FONT> <FONT size=3>of the Corporation has adopted resolutions, a copy of which
is</FONT> <FONT size=3>attached hereto, establishing and providing for the issuance of
a</FONT> <FONT size=3>series of Preferred Stock designated as Series 9 Class
I</FONT> <FONT size=3>Convertible Preferred Stock and has established and fixed
the</FONT> <FONT size=3>voting powers, designations, preferences and relative</FONT>
<FONT size=3>participating, optional and other special rights and</FONT> <FONT size=3>qualifications, limitations and restrictions of such Series 9
Class</FONT> <FONT size=3>I Convertible Preferred Stock as set forth in the
attached</FONT> <FONT size=3>resolutions.</FONT></P>
<P><FONT size=3>Dated: April 30, 1998</FONT></P><P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL<br>
</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>SERVICES, INC.</FONT></P>
<FONT size=3><BR WP="BR1"><BR
WP="BR2"></FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>By /s/ Louis Centofanti<br>
</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>_______________________________<br>
</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3>Dr. Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board</FONT>
<p><FONT size=3>ATTEST:</FONT>
<p><FONT size=3><BR WP="BR1">/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary</FONT>
<p align="left">&nbsp;
<p align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 01:32 PM 07/16/1998&nbsp;&nbsp;</font></p>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center"><FONT size=3><b>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</b></FONT></P>
<P align="center"><FONT size=3><b>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS,
PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 9 CLASS I CONVERTIBLE PREFERRED STOCK</b></FONT></P><FONT
size=3><BR WP="BR1"></FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
size=3><b>WHEREAS</b>, the Corporation's capital includes preferred
stock,</FONT> <FONT
size=3>par value $.001 per share ("Preferred Stock"), which
Preferred</FONT> <FONT
size=3>Stock may be issued in one or more series by resolutions adopted
by</FONT> <FONT
size=3>the directors, and with the directors being entitled by
resolution</FONT> <FONT
size=3>to fix the number of shares in each series and to designate
the</FONT> <FONT
size=3>rights, designations, preferences and relative,
participating,</FONT> <FONT
size=3>optional or other special rights and privileges, restrictions
and</FONT> <FONT
size=3>conditions attaching to the shares of each such
series;</FONT>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>WHEREAS</b>, it is in the best interests of the Corporation
for</FONT> <FONT size=3>the Board to create a new series from the Preferred
Stock</FONT> <FONT size=3>designated as the Series 9 Class I Convertible Preferred Stock,
par</FONT> <FONT size=3>value $.001 per share (the "Series 9 Class I Preferred
Stock");</FONT></P>
<P><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>NOW, THEREFORE, BE IT
RESOLVED</b>, that the Series 9 Class
I</FONT> <FONT size=3>Preferred Stock shall consist of three hundred (350) shares and
no</FONT> <FONT size=3>more and shall be designated as the Series 9 Class I
Convertible</FONT> <FONT size=3>Preferred Stock, and the preferences, rights,
privileges,</FONT> <FONT size=3>restrictions and conditions attaching to the Series 9 Class
I</FONT> <FONT size=3>Preferred Stock shall be as follows:</FONT></P>
<P><FONT size=3><b><u>Part 1 - Voting and Preemptive Rights.</u></b></FONT></P>
<P><FONT size=3>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Voting Rights.</u></b> Except as otherwise provided in Part 7
hereof</FONT> <FONT size=3>or under Section 242(b)(2) of the General Corporation Law of
the</FONT> <FONT size=3>State of Delaware (the "GCL"), the holders of the Series 9 Class
I</FONT> <FONT size=3>Preferred Stock shall have no voting rights whatsoever. To
the</FONT> <FONT size=3>extent that under Section 242(b)(2) of the GCL or Part 7
hereof,</FONT> <FONT size=3>the holders of the Series 9 Class I Preferred Stock are entitled
to</FONT> <FONT size=3>vote on a matter, each share of the Series 9 Class I
Preferred</FONT> <FONT size=3>Stock shall be entitled one (1) vote for each outstanding share
of</FONT> <FONT size=3>Series 9 Class I Preferred Stock. Holders of the Series 9 Class
I</FONT> <FONT size=3>Preferred Stock shall be entitled to notice of (and copies of
proxy</FONT> <FONT size=3>materials and other information sent to stockholders) for
all</FONT> <FONT size=3>shareholder meetings or written consents with respect to which
they</FONT> <FONT size=3>would be entitled to vote, which notice would be provided
pursuant</FONT> <FONT size=3>to the Corporation's bylaws and applicable statutes. If
the</FONT> <FONT size=3>holders of the Series 9 Class I Preferred Stock are required
to</FONT> <FONT size=3>vote under Section 242(b)(2) of the GCL as a result of the
number</FONT> <FONT size=3>of authorized shares of any such class or classes of stock
being</FONT> <FONT size=3>increased or decreased, the number of authorized shares of any
of</FONT> <FONT size=3>such class or classes of stock may be increased or decreased
(but</FONT> <FONT size=3>not below the number of shares thereof then outstanding) by
the</FONT> <FONT size=3>affirmative vote of the holders of a majority of the stock of
the</FONT> <FONT size=3>Corporation entitled to vote thereon, irrespective of
the</FONT> <FONT size=3>provisions of Section 242(b)(2) of the GCL.</FONT></P>
<P>&nbsp;</P>
<P align="center"><FONT size=3>-1-</FONT></P>&nbsp;
<P><FONT size=3>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>No Preemptive Rights</u></b>. The Series 9 Class I Preferred
Stock</FONT> <FONT size=3>shall not give its holders any preemptive rights to acquire
any</FONT> <FONT size=3>other securities issued by the Corporation at any time in
the</FONT> <FONT size=3>future.</FONT></P>
<P><FONT size=3><b><u>Part 2 - Liquidation Rights</u></b>.</FONT></P>
<P><FONT size=3>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Liquidation</u></b>. If the Corporation shall be voluntarily
or</FONT> <FONT size=3>involuntarily liquidated, dissolved or wound up at any time
when</FONT> <FONT size=3>any shares of the Series 9 Class I Preferred Stock shall
be</FONT> <FONT size=3>outstanding, the holders of the then outstanding Series 9 Class
I</FONT> <FONT size=3>Preferred Stock shall be entitled to receive out of the assets
of</FONT> <FONT size=3>the Corporation available for distribution to shareholders
an</FONT> <FONT size=3>amount equal to $1,000 consideration per outstanding share
of</FONT> <FONT size=3>Series 9 Class I Preferred Stock, and no more, plus an amount
equal</FONT> <FONT size=3>to all unpaid dividends accrued thereon to the date of payment
of</FONT> <FONT size=3>such distribution ("Liquidation Preference"), whether or
not</FONT> <FONT size=3>declared by the Board of Directors, before any payment shall
be</FONT> <FONT size=3>made or any assets distributed to the holders of the
Corporation's</FONT> <FONT size=3>Common Stock.</FONT></P>
<P><FONT size=3>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Payment of Liquidation
Preferences</u></b>. Subject to the
provisions</FONT> <FONT size=3>of Part 6 hereof, all amounts to be paid as Liquidation
Preference</FONT> <FONT size=3>to the holders of Series 9 Class I Preferred Stock, as provided
in</FONT> <FONT size=3>this Part 2, shall be paid or set apart for payment before
the</FONT> <FONT size=3>payment or setting apart for payment of any amount for, or
the</FONT> <FONT size=3>distribution of any of the Corporation's property to the holders
of</FONT> <FONT size=3>the Corporation's Common Stock, whether now or
hereafter</FONT> <FONT size=3>authorized, in connection with such liquidation, dissolution
or</FONT> <FONT size=3>winding up.</FONT></P>
<P><FONT size=3>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>No Rights After Payment</u></b>. After the payment to the holders
of</FONT> <FONT size=3>the shares of the Series 9 Class I Preferred Stock of the
full</FONT> <FONT size=3>Liquidation Preference amounts provided for in this Part 2,
the</FONT> <FONT size=3>holders of the Series 9 Class I Preferred Stock as such shall
have</FONT> <FONT size=3>no right or claim to any of the remaining assets of
the</FONT> <FONT size=3>Corporation.</FONT></P>
<P><FONT size=3>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Assets Insufficient to Pay Full Liquidation
Preference</u></b>.
In</FONT> <FONT size=3>the event that the assets of the Corporation available
for</FONT> <FONT size=3>distribution to the holders of shares of the Series 9 Class
I</FONT> <FONT size=3>Preferred Stock upon any dissolution, liquidation or winding up
of</FONT> <FONT size=3>the Corporation, whether voluntary or involuntary, shall
be</FONT> <FONT size=3>insufficient to pay in full all amounts to which such holders
are</FONT> <FONT size=3>entitled pursuant to this Part 2, no such distribution shall
be</FONT> <FONT size=3>made on account of any shares of any other class or series
of</FONT> <FONT size=3>Preferred Stock ranking on a parity with the shares of this
Series</FONT> <FONT size=3>9 Class I Preferred Stock upon such dissolution, liquidation
or</FONT> <FONT size=3>winding up unless proportionate distributive amounts shall be
paid</FONT> <FONT size=3>on account of the shares of this Series 9 Class I Preferred
Stock</FONT> <FONT size=3>and shares of such other class or series ranking on a parity
with</FONT> <FONT size=3>the shares of this Series 9 Class I Preferred Stock, ratably,
in</FONT> <FONT size=3>proportion to the full distributable amounts for which holders
of</FONT> <FONT size=3>all such parity shares are respectively entitled upon
such</FONT> <FONT size=3>dissolution, liquidation or winding up.</FONT></P>
<P><FONT size=3><b><u>Part 3 - Dividends.</u></b></FONT></P>
<P><FONT size=3>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of the Series 9 Class I Preferred Stock
are</FONT> <FONT size=3>entitled to receive if, when and as declared by the Board
of</FONT> <FONT size=3>Directors of the Corporation (the "Board") out of funds
legally</FONT> available therefor, cumulative</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center"><FONT size=3>-2-</FONT></P>&nbsp;
<P><FONT size=3>cumulative annual dividends, payable in cash
or</FONT> <FONT size=3>Common Stock of the Corporation, par value $.001 per share
(the</FONT> <FONT size=3>"Common Stock"), or any combination thereof, at the
Corporation's</FONT> <FONT size=3>election, at the rate of four percent (4%) per annum of
the</FONT> <FONT size=3>Liquidation Value (as defined below) of each issued and
outstanding</FONT> <FONT size=3>share of Series 9 Class I Preferred Stock (the "Dividend
Rate").</FONT>&nbsp; <FONT size=3>The Liquidation Value of the Series 9 Class I Preferred Stock
shall</FONT> <FONT size=3>be $1,000 per outstanding share of the Series 9 Class I
Preferred</FONT> <FONT size=3>Stock (the "Liquidation Value"). The dividend is payable
semi-annually within seven (7) business days after each of December
31</FONT> <FONT size=3>and June 30 of each year, commencing June 30, 1998 (each,
a</FONT> <FONT size=3>"Dividend Declaration Date"). Dividends shall be paid only
with</FONT> <FONT size=3>respect to shares of Series 9 Class I Preferred Stock
actually</FONT> <FONT size=3>issued and outstanding on a Dividend Declaration Date and
to</FONT> <FONT size=3>holders of record of the Series 9 Class I Preferred Stock as of
the</FONT> <FONT size=3>Dividend Declaration Date. Dividends shall accrue from the
first</FONT> <FONT size=3>day of the semi-annual period in which such dividend may
be</FONT> <FONT size=3>payable, except with respect to the first semi-annual
dividend</FONT> <FONT size=3>which shall accrue from March 1, 1998. In the event that
the</FONT> <FONT size=3>Corporation elects to pay the accrued dividends due as of
a</FONT> <FONT size=3>Dividend Declaration Date on an outstanding share of the Series
9</FONT> <FONT size=3>Class I Preferred Stock in Common Stock of the Corporation,
the</FONT> <FONT size=3>holder of such share shall receive that number of shares of
Common</FONT> <FONT size=3>Stock of the Corporation equal to the product of (a) the
quotient</FONT> <FONT size=3>of (i) the Dividend Rate divided by (ii) the average of the
closing</FONT> <FONT size=3>bid quotation of the Corporation's Common Stock as reported on
the</FONT> <FONT size=3>National Association of Securities Dealers Automated
Quotation</FONT> <FONT size=3>system ("NASDAQ"), or the average closing sale price if listed
on</FONT> <FONT size=3>a national securities exchange, for the five (5) trading
days</FONT> <FONT size=3>immediately prior to the Dividend Declaration Date (the
"Stock</FONT> <FONT size=3>Dividend Price"), times (b) a fraction, the numerator of which
is</FONT> <FONT size=3>the number of days elapsed during the period for which the
dividend</FONT> <FONT size=3>is to be paid and the denominator of which is 365. Dividends
on</FONT> <FONT size=3>the Series 9 Class I Preferred Stock shall be cumulative, and
no</FONT> <FONT size=3>dividends or other distributions shall be paid or declared or
set</FONT> <FONT size=3>aside for payment on the Corporation's Common Stock until
all</FONT> <FONT size=3>accrued and unpaid dividends on all outstanding shares of Series
9</FONT> <FONT size=3>Class I Preferred Stock shall have been paid or declared and
set</FONT> <FONT size=3>aside for payment.</FONT></P>
<P><FONT size=3><b><u>Part 4 - Conversion</u></b>. The holders of the Series 9 Class I
Preferred</FONT> <FONT size=3>Stock shall have rights to convert the shares of Series 9 Class
I</FONT> <FONT size=3>Preferred Stock into shares of the Corporation's Common Stock,
as</FONT> <FONT size=3>follows (the "Conversion Rights"):</FONT></P>
<P><FONT size=3>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Right to Convert</u></b>. The Series 9 Class I Preferred Stock
shall</FONT> <FONT size=3>be convertible into shares of Common Stock at any
time.</FONT></P>
<P><FONT size=3>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Conversion Price</u></b>. Subject to the terms hereof, as
used</FONT> <FONT size=3>herein, the Conversion Price per outstanding share of
Series</FONT> <FONT size=3>9 Class I Preferred Stock shall be $1.8125, except that,
in</FONT> <FONT size=3>the event the average closing bid price per share of
the</FONT> <FONT size=3>Common Stock as reported on the over-the-counter market,
or</FONT> <FONT size=3>the closing sale price if listed on a national
securities</FONT> <FONT size=3>exchange, for the five (5) trading days prior to the</FONT>
<FONT size=3>particular date of conversion shall be less than $2.265,
the</FONT> <FONT size=3>Conversion Price for only such particular conversion shall
be</FONT> <FONT size=3>the product of the average closing bid quotation of the
Common</FONT> <FONT size=3>Stock as reported on the over-the-counter market, or
the</FONT> <FONT size=3>closing sale price if listed on a national securities</FONT>
<FONT size=3>exchange, for the five (5) trading days immediately
preceding</FONT> <FONT size=3>the date of the Conversion Notice referred to in Section
4.3</FONT> <FONT size=3>below in connection with such conversion multiplied by
eighty percent (80%).&nbsp; Notwithstanding the foregoing, the Conversion</FONT></P>
&nbsp;
<p>&nbsp;</p>
<P align="center"><FONT size=3>-3-</FONT></P>&nbsp;
<P><FONT size=3>Price shall not be less than a minimum of $.75 per
share</FONT> <FONT size=3>("Minimum Conversion Price"), which Minimum Conversion
Price</FONT> <FONT size=3>shall be eliminated from and after September 6, 1998. If
any</FONT> <FONT size=3>of the outstanding shares of Series 9 Class I Preferred
Stock</FONT> <FONT size=3>are converted, in whole or in part, into Common Stock
pursuant</FONT> <FONT size=3>to the terms of this Part 4, the number of shares of
whole</FONT> <FONT size=3>Common Stock to be issued to the holder as a result of
such</FONT> <FONT size=3>conversion shall be determined by dividing (a) the
aggregate</FONT> <FONT size=3>Liquidation Value of the Series 9 Class I Preferred Stock
so</FONT> <FONT size=3>surrendered for conversion by (b) the Conversion Price as
of</FONT> <FONT size=3>such conversion. At the time of conversion of shares of
the</FONT> <FONT size=3>Series 9 Class I Preferred Stock, the Corporation shall pay
in</FONT> <FONT size=3>cash to the holder thereof an amount equal to all unpaid
and</FONT> <FONT size=3>accrued dividends, if any, accrued thereon to the date
of</FONT> <FONT size=3>conversion, or, at the Corporation's option, in lieu of
paying</FONT> <FONT size=3>cash for the accrued and unpaid dividends, issue that
number</FONT> <FONT size=3>of whole shares of Common Stock which is equal to the
quotient</FONT> <FONT size=3>of the amount of such unpaid and accrued dividends to the
date</FONT> <FONT size=3>of conversion on the shares of Series 9 Class I
Preferred</FONT> <FONT size=3>Stock so converted divided by the Stock Dividend Price,
as</FONT> <FONT size=3>defined in Part 3 hereof, in effect at the date of
conversion.</FONT></P>
<P><FONT size=3>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Mechanics of Conversion</u></b>. Any holder of the Series 9 Class
I</FONT> <FONT size=3>Preferred Stock who wishes to exercise its Conversion
Rights</FONT> <FONT size=3>pursuant to Section 4.1 of this Part 4 must surrender
the</FONT> <FONT size=3>certificate therefor at the principal executive office of
the</FONT> <FONT size=3>Corporation, and give written notice, which may be
via</FONT> <FONT size=3>facsimile transmission, to the Corporation at such office
that</FONT> <FONT size=3>it elects to convert the same (the "Conversion Notice").
The</FONT> <FONT size=3>Corporation shall, within seven (7) business days
after</FONT> <FONT size=3>receipt of an appropriate and timely Conversion Notice
(and</FONT> <FONT size=3>certificate, if necessary), issue to such holder of Series
9</FONT> <FONT size=3>Class I Preferred Stock or its agent a certificate for
the</FONT> <FONT size=3>number of shares of Common Stock to which he shall be</FONT>
<FONT size=3>entitled; it being expressly agreed that until and unless
the</FONT> <FONT size=3>holder delivers written notice to the Corporation to
the</FONT> <FONT size=3>contrary, all shares of Common Stock issuable upon
conversion</FONT> <FONT size=3>of the Series 9 Class I Preferred Stock hereunder are to
be</FONT> <FONT size=3>delivered by the Corporation to a party designated in
writing</FONT> <FONT size=3>by the holder in the Conversion Notice for the account of
the</FONT> <FONT size=3>holder and such shall be deemed valid delivery to the
holder</FONT> <FONT size=3>of such shares of Common Stock. Such conversion shall
be</FONT> <FONT size=3>deemed to have been made only after both the certificate
for</FONT> <FONT size=3>the shares of Series 9 Class I Preferred Stock to be
converted</FONT> <FONT size=3>have been surrendered and the Conversion Notice is received
by</FONT> <FONT size=3>the Corporation (the "Conversion Documents"), and the
person</FONT> <FONT size=3>or entity whose name is noted on the certificate
evidencing</FONT> <FONT size=3>such shares of Common Stock issuable upon such
conversion</FONT> <FONT size=3>shall be treated for all purposes as the record holder of
such</FONT> <FONT size=3>shares of Common Stock at and after such time. In the
event</FONT> <FONT size=3>that the Conversion Notice is sent via facsimile
transmission,</FONT> <FONT size=3>the Corporation shall be deemed to have received such</FONT>
<FONT size=3>Conversion Notice on the first business day on which
such</FONT> <FONT size=3>facsimile Conversion Notice is actually
received.</FONT></P>
<P><FONT size=3>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Merger or Consolidation</u></b>. In case of either (a) any merger
or</FONT> <FONT size=3>consolidation to which the Corporation is a party</FONT> <FONT size=3>(collectively, the "Merger"), other than a Merger in which
the</FONT> <FONT size=3>Corporation is the surviving or continuing corporation, or
(b)</FONT> <FONT size=3>any sale or conveyance to another corporation of all,
or</FONT> <FONT size=3>substantially all, of the assets of the
Corporation</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>-4-</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT size=3>(collectively, the "Sale"), and such Merger or Sale
becomes</FONT> <FONT size=3>effective (x) while any shares of Series 9 Class I
Preferred</FONT> <FONT size=3>Stock are outstanding and prior to the date that the</FONT>
<FONT size=3>Corporation's Registration Statement covering up to
200,000</FONT> <FONT size=3>shares of Common Stock issuable upon the conversion of
the</FONT> <FONT size=3>Series 9 Class I Preferred Stock is declared effective by
the</FONT> <FONT size=3>U. S. Securities and Exchange Commission or (y) prior to
the</FONT> <FONT size=3>end of the restriction periods in Section 4.1, then, in
such</FONT> <FONT size=3>event, the Corporation or such successor corporation, as
the</FONT> <FONT size=3>case may be, shall make appropriate provision so that
the</FONT> <FONT size=3>holder of each share of Series 9 Class I Preferred Stock
then</FONT> <FONT size=3>outstanding shall have the right to convert such share
of</FONT> <FONT size=3>Series 9 Class I Preferred Stock into the kind and amount
of</FONT> <FONT size=3>shares of stock or other securities and property
receivable</FONT> <FONT size=3>upon such Merger or Sale by a holder of the number of
shares</FONT> <FONT size=3>of Common Stock into which such shares of Series 9 Class
I</FONT> <FONT size=3>Preferred Stock could have been converted into
immediately</FONT> <FONT size=3>prior to such Merger or Sale, subject to adjustments
which</FONT> <FONT size=3>shall be as nearly equivalent as may be practicable to
the</FONT> <FONT size=3>adjustments provided for in this Part 4.</FONT></P>
<P><FONT size=3>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u><b>Adjustments to Conversion Price for Stock Dividends and
for</b></u></FONT><u><b> </b></u><FONT size=3><u><b>Combinations or Subdivisions of Common
Stock</b></u>. If the</FONT> <FONT size=3>Corporation at any time or from time to time while shares
of</FONT> <FONT size=3>Series 9 Class I Preferred Stock are issued and
outstanding</FONT> <FONT size=3>shall declare or pay, without consideration, any dividend
on</FONT> <FONT size=3>the Common Stock payable in Common Stock, or shall effect
a</FONT> <FONT size=3>subdivision of the outstanding shares of Common Stock into
a</FONT> <FONT size=3>greater number of shares of Common Stock (by stock
split,</FONT> <FONT size=3>reclassification or otherwise than by payment of a dividend
in</FONT> <FONT size=3>Common Stock or in any right to acquire Common Stock), or
if</FONT> <FONT size=3>the outstanding shares of Common Stock shall be combined
or</FONT> <FONT size=3>consolidated, by reclassification or otherwise, into a
lesser</FONT> <FONT size=3>number of shares of Common Stock, then the Conversion Price
in</FONT> <FONT size=3>effect immediately before such event shall, concurrently
with</FONT> <FONT size=3>the effectiveness of such event, be proportionately
decreased</FONT> <FONT size=3>or increased, as appropriate.</FONT></P>
<P><FONT size=3>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Adjustments for Reclassification and
Reorganization</u></b>. If
the</FONT> <FONT size=3>Common Stock issuable upon conversion of the Series 9 Class
I</FONT> <FONT size=3>Preferred Stock shall be changed into the same or a
different</FONT> <FONT size=3>number of shares of any other class or classes of
stock,</FONT> <FONT size=3>whether by capital reorganization, reclassification
or</FONT> <FONT size=3>otherwise (other than a subdivision or combination of
shares</FONT> <FONT size=3>provided for in Section 4.4 hereof), the Conversion Price
then</FONT> <FONT size=3>in effect shall, concurrently with the effectiveness of
such</FONT> <FONT size=3>reorganization or reclassification, be
proportionately</FONT> <FONT size=3>adjusted so that the Series 9 Class I Preferred Stock shall
be</FONT> <FONT size=3>convertible into, in lieu of the number of shares of
Common</FONT> <FONT size=3>Stock which the holders of Series 9 Class I Preferred
Stock</FONT> <FONT size=3>would otherwise have been entitled to receive, a number
of</FONT> <FONT size=3>shares of such other class or classes of stock equivalent
to</FONT> <FONT size=3>the number of shares of Common Stock that would have
been</FONT> <FONT size=3>subject to receipt by the holders upon conversion of
the</FONT> <FONT size=3>Series 9 Class I Preferred Stock immediately before
that</FONT> <FONT size=3>change.</FONT></P>
<P><FONT size=3>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Common Stock Duly Issued</u></b>. All Common Stock which may
be</FONT> <FONT size=3>issued upon conversion of Series 9 Class I Preferred
Stock</FONT> <FONT size=3>will, upon issuance, be duly issued, fully paid and</FONT>
<FONT size=3>nonassessable and free from all taxes, liens, and charges
with</FONT> <FONT size=3>respect to the issue thereof.</FONT></P>
&nbsp;
<p>&nbsp;</p>
<P align="center"><FONT size=3>-5-</FONT></P>&nbsp;
<p>&nbsp;</p>
<P><FONT size=3>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Notice of Adjustments</u></b>. Upon the occurrence of each
adjustment</FONT> <FONT size=3>or readjustment of any Conversion Price pursuant to this
Part</FONT> <FONT size=3>4, the Corporation, at its expense, within a reasonable
period</FONT> <FONT size=3>of time, shall compute such adjustment or readjustment
in</FONT> <FONT size=3>accordance with the terms hereof and prepare and furnish
to</FONT> <FONT size=3>each holder of Series 9 Class I Preferred Stock a
notice</FONT> <FONT size=3>setting forth such adjustment or readjustment and showing
in</FONT> <FONT size=3>detail the facts upon which such adjustment is
based.</FONT></P>
<P><FONT size=3>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Issue Taxes</u></b>. The Corporation shall pay any and all issue
and</FONT> <FONT size=3>other taxes that may be payable in respect of any issue
or</FONT> <FONT size=3>delivery of shares of Common Stock on conversion of the
Series</FONT> <FONT size=3>9 Class I Preferred Stock pursuant thereto; provided,
however,</FONT> <FONT size=3>that the Corporation shall not be obligated to pay
any</FONT> <FONT size=3>transfer taxes resulting from any transfer requested by
any</FONT> <FONT size=3>holder of Series 9 Class I Preferred Stock in connection
with</FONT> <FONT size=3>such conversion.</FONT></P>
<P><FONT size=3>4.10&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Reservation of Stock Issuable Upon
Conversion</u></b>.
The</FONT> <FONT size=3>Corporation shall at all times reserve and keep available
out</FONT> <FONT size=3>of its authorized but unissued shares of Common Stock,
solely</FONT> <FONT size=3>for the purpose of effecting the conversion of the shares
of</FONT> <FONT size=3>the Series 9 Class I Preferred Stock, such number of
its</FONT> <FONT size=3>shares of Common Stock as shall, from time to time,
be</FONT> <FONT size=3>sufficient to effect the conversion of all outstanding
shares</FONT> <FONT size=3>of the Series 9 Class I Preferred stock, and, if at any
time,</FONT> <FONT size=3>the number of authorized but unissued shares of Common
Stock</FONT> <FONT size=3>shall not be sufficient to effect the conversion of all
then</FONT> <FONT size=3>outstanding shares of the Series 9 Class I Preferred
Stock,</FONT> <FONT size=3>the Corporation will take such corporate action as may
be</FONT> <FONT size=3>necessary to increase its authorized but unissued shares
of</FONT> <FONT size=3>Common Stock to such number of shares as shall be
sufficient</FONT> <FONT size=3>for such purposes, including, without limitation, engaging
in</FONT> <FONT size=3>reasonable efforts to obtain the requisite
stockholder</FONT> <FONT size=3>approval of any necessary amendment to its Certificate
of</FONT> <FONT size=3>Incorporation.</FONT></P>
<P><FONT size=3>4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Fractional Shares</u></b>. No fractional shares shall be issued
upon</FONT> <FONT size=3>the conversion of any share or shares of Series 9 Class
I</FONT> <FONT size=3>Preferred Stock. All shares of Common Stock
(including</FONT> <FONT size=3>fractions thereof) issuable upon conversion of more than
one</FONT> <FONT size=3>share of Series 9 Class I Preferred Stock by a holder
thereof</FONT> <FONT size=3>shall be aggregated for purposes of determining whether
the</FONT> <FONT size=3>conversion would result in the issuance of any
fractional</FONT> <FONT size=3>share. If, after the aforementioned aggregation, the</FONT>
<FONT size=3>conversion would result in the issuance of a fractional
share</FONT> <FONT size=3>of Common Stock, such fractional share shall be rounded up
to</FONT> <FONT size=3>the nearest whole share.</FONT></P>
<P><font size="3">4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Notices</u></b>. Any notices required by the provisions of this
Part</font> <font size="3">4 to be given to the holders of shares of Series 9 Class
I</font> <font size="3">Preferred Stock shall be deemed given if deposited in
the</font> <font size="3">United States mail, postage prepaid, and addressed to
each</font> <font size="3">holder of record at his address appearing on the books of
the</font> <font size="3">Corporation.</font></P>
<P><font size="3">4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Business Day</u></b>. As used herein, the term "business day"
shall</font> <font size="3">mean any day other than a Saturday, Sunday or a day when
the</font> <font size="3">federal and state banks located in the State of New York
are</font> <font size="3">required or is permitted to close.</font></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center"><font size="3">-6-</font></P>&nbsp;
<P><font size="3"><b><u>Part 5 - Redemption</u></b>.</font></P>
<P><font size="3">5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Redemption at Corporation's
Option</u></b>. 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 9 Class I Preferred
Stock,</font> <font size="3">the Corporation may, at its sole option, but shall not
be</font> <font size="3">obligated to, redeem, in whole or in part, at any time,
and</font> <font size="3">from time to time, the then outstanding Series 9 Class
I</font> <font size="3">Preferred Stock at the following cash redemption prices
per</font> <font size="3">share (the "Redemption Price") if redeemed during
the following periods: (a) within four (4) years from the date
of the first issuance of Series 9 Class I 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 of Four U.S. Dollars ($4.00) per share, and (b) after four
(4) years from the date of the first issuance of Series 9 Class
I Preferred Stock - $1,000 per share.</font></P>
<P><font size="3">5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Mechanics of Redemption</u></b>. Thirty (30) days prior to any
date stipulated by the Corporation for the redemption of Series
9 Class I 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 9 Class
I Preferred Stock. The Redemption Notice shall state: (i)
the Redemption Date of such shares, (ii) the number of Series
9 Class I 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 9 Class I Preferred Stock
to be redeemed from such holder, and (iv) instructions as to
how to specify to the Corporation the number of Series 9 Class
I Preferred Stock to be redeemed as provided in this Part
5.</font></P>
<P><font size="3">5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Rights of Conversion Upon
Redemption</u></b>. If the
redemption occurs after the first one hundred eighty (180) days after
the first issuance of Series 9 Class I Preferred Stock, then,
upon receipt of the Redemption Notice, any holder of Series 9
Class I Preferred Stock shall have the option, at its sole
election, to specify what portion of its Series 9 Class I
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.</font></P>
<P><font size="3">5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Surrender of
Certificates</u></b>. On or before the Redemption
Date in respect of any Series 9 Class I 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 9 Class
I 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.</font></P>
&nbsp;
<p>&nbsp;</p>
<P align="center"><font size="3">-7-</font></P>&nbsp;
<p>&nbsp;</p>
<P><font size="3">5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Payment</u></b>. On the Redemption Date in respect of any Series
9 Class I 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 9 Class I Preferred Stock in respect of
which the Corporation has received notice from the holder thereof
of its election to convert Series 9 Class I 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</font> <font size="3">constitute full payment for the shares to their holders,
and</font> <font size="3">from and after the date of the deposit the redeemed
shares</font> <font size="3">shall be deemed to be no longer outstanding, and
holders</font> <font size="3">thereof shall cease to be shareholders with respect to
such</font> <font size="3">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.</font></P>
<P><font size="3"><b><u>Part 6 - Parity with Other Shares of Series 9 Class I
Preferred Stock and Priority.</u></b></font></P>
<P><font size="3">6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Rateable Participation</u></b>. If any cumulative dividends or
return of capital in respect of Series 9 Class I 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.</font></P>
<P><font size="3">6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Ranking</u></b>. For purposes of this resolution, any stock of
any</font> <font size="3">class or series of the Corporation shall be deemed to
rank:</font></P>
<P><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior or senior to the shares of this Series 9
Class I Preferred Stock either as to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends
or upon liquidation, if the holders of such class or classes shall be entitled&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the
receipt of dividends or of amounts distributable upon dissolution, liquidation&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
winding up of the Corporation, whether voluntary or involuntary, as the case&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;may be,
in preference or priority to the holders of shares of this Series 9 Class I&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
Stock;</font></P>
<P><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a parity with, or equal to, shares of this
Series 9 Class I Preferred Stock, either&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as to
dividends or upon liquidation, whether or not the dividend rates, dividend&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payment dates, or
redemption or liquidation prices per share or sinking fund&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provisions, if any, are different
from those of this Series 9 Class I Preferred Stock,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the holders of such stock are
entitled to the receipt of dividends or of amounts&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;distributable upon dissolution,
liquidation or winding up of the Corporation,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether voluntary or involuntary, in
proportion to their respective dividend rates</font></P>
<P>&nbsp;</P>
<P align="center"><font size="3">-8-</font></P>&nbsp;
<P><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or liquidation prices, without preference or
priority, one over the other, as between<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the holders of such stock and over the other, as between the holders of such&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;stock and the
holders of shares of this Series 9 Class I Preferred Stock; and,</font></P>
<P><font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junior to shares of this Series 9 Class I
Preferred Stock, either as to dividends or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon liquidation, if such class or series
shall be Common Stock or if the holders&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
shares of this Series 9 Class I Preferred Stock shall be entitled to receipt of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or of amounts distributable upon
dissolution, liquidation or winding up&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the
Corporation, whether voluntary or involuntary, as the case may be, in&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;preference or priority
to the holders of shares of such class or series.</font></P>
<P><font size="3"><b><u>Part 7 - Reissue.</u></b></font></P>
<P><font size="3">7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Authorized</u></b>. Any shares of Series 9 Class I
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.</font></P>
&nbsp;
<P align="center"><font size="3">-9-</font></P>
<p align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 12:30 PM 07/15/1999&nbsp;&nbsp;<br>
991291288 - 2249849&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
<P><FONT size=-1>
<CENTER></FONT><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 11 CLASS K CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></CENTER>
<P><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 11 Class K 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 11 Class K Convertible Preferred
Stock as set forth in the attached resolutions.</P>
<P>Dated: July 15, 1999&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC.</P><BR
WP="BR1"><BR WP="BR2"><BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;______________________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board
<p>ATTEST:
<p><BR WP="BR1"><BR WP="BR2">/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary
<p>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</CENTER>
<P>
<CENTER>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 11 CLASS K CONVERTIBLE PREFERRED STOCK</CENTER>
<P><br>
<b>WHEREAS,</b></P>
<P>A. The Corporation's share capital includes Preferred Stock, par value $.001
per share ("Preferred Stock"), which Preferred Stock may be issued in one or
more series by the Board of Directors of the Corporation (the "Board") 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, privileges, restrictions and conditions
attaching to the shares of each such series; and</P>
<P>B. 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 11 Class K
Convertible Preferred Stock, par value $.001.</P>
<P><STRONG>NOW, THEREFORE, BE IT RESOLVED, THAT:</STRONG></P>
<P>The Series 11 Class K Convertible Preferred Stock, par value $.001 (the
"Series 11 Class K Preferred Stock") of the Corporation shall consist of 1,769
shares and no more and shall be designated as the Series 11 Class K Convertible
Preferred Stock, and the preferences, rights, privileges, restrictions and
conditions attaching to the Series 11 Class K Preferred Stock shall be as
follows:</P>
<P><STRONG><U>Part 1 - Voting and Preemptive Rights</U></STRONG>.</P>
<P>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Voting Rights</STRONG></U>. Except as otherwise provided
herein, in the Corporation's Certificate of Incorporation (the "Articles") or
the General Corporation Law of the State of Delaware (the "GCL"), the holders of
the Series 11 Class K Preferred Stock shall have no voting rights whatsoever. To
the extent that under the GCL the vote of the holders of the Series 11 Class K
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 11
Class K 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 11 Class K
Preferred Stock (except as otherwise may be required under the GCL) shall
constitute the approval of such </P>&nbsp;
<p>&nbsp;</p>
<P>
<CENTER>-2-</CENTER>
<P></P>&nbsp;
<P>action by the series. To the extent that under the GCL the holders of the
Series 11 Class K Preferred Stock are entitled to vote on a matter with holders
of Corporation's Common Stock and/or any other class or series of the
Corporation's voting securities, the Series 11 Class K Preferred Stock, the
Corporation's Common Stock and all other classes or series of the Corporation's
voting securities shall vote together as one class, with each share of Series 11
Class K Preferred Stock entitled to a number of votes equal to the number of
shares of the Corporation's Common Stock into which it is then convertible using
the record date for the taking of such vote of stockholders as the date as of
which the Conversion Price (as defined in Section 4.2 hereof) is calculated and
conversion is effected. Holders of the Series 11 Class K 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.</P>
<P>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Preemptive Rights</STRONG></U>. The Series 11 Class K
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.</P>
<P><STRONG><U>Part 2 - Liquidation Rights</U></STRONG>.</P>
<P>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Liquidation</STRONG></U>. If the Corporation shall be
voluntarily or involuntarily liquidated, dissolved or wound up at any time when
any shares of the Series 11 Class K Preferred Stock shall be outstanding, the
holders of the then outstanding Series 11 Class K Preferred Stock shall have a
preference in distribution of the Corporation's property available for
distribution to the holders of the Corporation's Common Stock equal to $1,000
consideration per outstanding share of Series 11 Class K Preferred Stock, 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.</P>
<P>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment of Liquidation Preferences</STRONG></U>. Subject to
the provisions of Part 6 hereof, all amounts to be paid as Liquidation
Preference to the holders of Series 11 Class K 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.</P>
<P>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Rights After Payment</STRONG></U>. After the payment to the
holders of the shares of the Series 11 Class K Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the holders of the
Series 11 Class K Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.</P>
<P>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Assets Insufficient to Pay Full Liquidation
Preference</STRONG></U>. In the event that the assets of the Corporation
available for distribution to the holders of shares of the Series 11 Class K
Preferred Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be </P>
<P>&nbsp; </P>
<P>
<CENTER>-3-</CENTER>
<P></P>&nbsp;
<P>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 11 Class K Preferred Stock upon such dissolution,
liquidation or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series 11 Class K Preferred Stock and
shares of such other class or series ranking on a parity with the shares of this
Series 11 Class K 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.</P>
<P><STRONG><U>Part 3 - Dividends</U></STRONG>.</P>
<P>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of the Series 11 Class K Preferred Stock are entitled to
receive if, when and as declared by the Board out of funds legally available
therefor, cumulative dividends, payable in cash or Common Stock of the
Corporation, par value $.001 per share (the "Common Stock"), at the
Corporation's election, at the rate of six percent (6%) per annum of the
Liquidation Value of the Series 11 Class K Preferred Stock. The Liquidation
Value of the Series 11 Class K Preferred Stock shall be $1,000.00 per share (the
"Dividend Rate"). 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, 1996 (each, a "Dividend Declaration Date"). Dividends shall be paid
only with respect to shares of Series 11 Class K Preferred Stock actually issued
and outstanding on a Dividend Declaration Date and to holders of record 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 11 Class K Preferred Stock. In the event that the Corporation elects
to pay dividends in Common Stock of the Corporation, each holder of the Series
11 Class K Preferred Stock shall receive shares of Common Stock of the
Corporation equal to the quotient of (i) the Dividend Rate in effect on the
applicable Dividend Declaration Date dividend by (ii) the average of the 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 prior to the Dividend Declaration Date (the "Stock
Dividend Price"). Dividends on the Series 11 Class K Preferred Stock shall be
cumulative, and no dividends or other distributions shall be paid or declared or
set aside for payment on the Common Stock until all accrued and unpaid dividends
on all outstanding shares of Series 11 Class K Preferred Stock shall have been
paid or declared and set aside for payment.</P>
<P><STRONG><U>Part 4 - Conversion</U></STRONG>. The holders of the Series 11
Class K Preferred Stock shall have rights to convert the shares of Series 11
Class K Preferred Stock into shares of the Corporation's Common Stock, par value
$.001 per share ("Common Stock"), as follows (the "Conversion Rights"):</P>
<P>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No Right to Convert</U>. The Series 11 Class K Preferred shall not be
convertible into shares of Common Stock until after July 15, 2000.</P>&nbsp;
<p>&nbsp;</p>
<P>
<CENTER>-4-</CENTER>
<P></P>
<P>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Right to Convert</STRONG></U>. The Series 11 Class K Preferred
Stock may be convertible into shares of Common Stock at any time on or after
July 15, 2000.</P>
<P>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Conversion Price</STRONG></U>. As used herein, the term
Conversion Price shall be the product 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 (ii) seventy-five percent (75%), subject to the
provisions of this Section 4.3. Notwithstanding the foregoing, the Conversion
Price shall not be (i) less than a minimum of $1.50 per share for a period of
twenty-four (24) months from the date of issuance of the Series 11 Class K
Preferred Stock, or, after twenty-four (24) months from the date of issuance of
the Series 11 Class K Preferred Stock, a minimum of $.50 per share (as
applicable, the "Minimum Conversion Price") or (ii) more than a maximum of $1.50
per share ( "Maximum Conversion Price"). If, after July 1, 1996, the Corporation
sustains a net loss, on a consolidated basis, in each of two (2) consecutive
quarters, as determined under generally accepted accounting principles, the
Minimum Conversion Price shall be reduced $.25 a share, but there shall be no
change to, or reduction of, the Maximum Conversion Price. For the purpose of
determining whether the Corporation has had a net loss in each of two (2)
consecutive quarters, at no time shall a quarter that has already been
considered in such determination be considered in any subsequent determination
(as an example the third quarter of 1996 in which there is a net profit and the
fourth quarter of 1996 in which there is a net loss shall be considered as two
consecutive quarters, and, as a result, the fourth quarter of 1996 shall not be
considered along with the first quarter of 1997 as two (2) consecutive quarters,
but the first quarter of 1997 must be considered with the second quarter of 1997
for the purposes of such determination). For the purposes of this Section 4.2, a
"quarter" is a three (3) month period ending on March 31, June 30, September 30,
and December 31. If any of the outstanding shares of Series 11 Class K 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 11 Class K 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 11 Class K
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 product of dividing the amount of such unpaid and
accrued dividends to the date of conversion on the shares of Series 11 Class K
Preferred Stock so converted by the Conversion Price in effect at the date of
conversion.</P>
<P>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Conversion</STRONG></U>. Any holder of the Series
11 Class K Preferred Stock who wishes to exercise its Conversion Rights pursuant
to Section 4.1 of this Part 4 must, if such shares are not being held in escrow
by the Corporation's attorneys, surrender the certificate therefor at the
principal executive office of the Corporation, and give written notice, which
may be via facsimile transmission, to the Corporation at such office that it
elects to convert the same (the </P>&nbsp;
<P>
<CENTER>-5-</CENTER>
<P></P>
<P>"Conversion Notice"). In the event that the shares of Series 11 Class K
Preferred Stock are being held in escrow by the Corporation's attorneys, no
delivery of the certificates shall be required. No Conversion Notice with
respect to any shares of Series 11 Class K Preferred Stock can be given prior to
the time such shares of Series 11 Class K Preferred Stock are eligible for
conversion in accordance with the provision of Section 4.1 above. Any such
premature Conversion Notice shall automatically be null and void. The
Corporation shall, within five (5) business days after receipt of an appropriate
and timely Conversion Notice (and certificate, if necessary), issue to such
holder of Series 11 Class K 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 11 Class K 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 11 Class
K Preferred Stock to be converted have been surrendered and the Conversion
Notice is received by the Corporation (or in the event that no surrender of the
Certificate is required, then only upon the receipt by the Corporation of the
Conversion Notice) (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. If the Corporation
fails to deliver to the holder or its agent the certificate representing the
shares of Common Stock that the holder is entitled to receive as a result of
such conversion within five (5) business days after receipt by the Corporation
from the holder of an appropriate and timely Conversion Notice and certificates
pursuant to the terms of this Section 4.3, the Corporation shall pay to the
holder U.S. $1,000 for each day that the Corporation is late in delivering such
certificate to the holder or its agent.</P>
<P>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments to Conversion Price for Stock Dividends and for
Combinations or Subdivisions of Common Stock</STRONG></U>. If the Corporation at
any time or from time to time while shares of Series 11 Class K 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. If the Corporation shall declare or pay, without
consideration, any dividend on the Common Stock payable in any right to acquire
Common stock for no consideration, then the Corporation shall </P>&nbsp;
<p>&nbsp;</p>
<P>
<CENTER>-6-</CENTER>
<P></P>&nbsp;
<P>be deemed to have made a dividend payable in Common Stock in an amount of
shares equal to the maximum number of shares issuable upon exercise of such
rights to acquire Common Stock.</P>
<P>4.6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments for Reclassification and
Reorganization</STRONG></U>. If the Common Stock issuable upon conversion of the
Series 11 Class K 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 11 Class K
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 11 Class K 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
11 Class K Preferred Stock immediately before that change.</P>
<P>4.7&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Common Stock Duly Issued</STRONG></U>. All Common Stock which
may be issued upon conversion of Series 11 Class K 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.</P><P>4.8&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notice of Adjustments</STRONG></U>. 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 11 Class K Preferred Stock a notice
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment is based.</P>
<P>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Issue Taxes</STRONG></U>. 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 11 Class K
Preferred Stock pursuant thereto; <U>provided, however</U>, that the Corporation
shall not be obligated to pay any transfer taxes resulting from any transfer
requested by any holder of Series 11 Class K Preferred Stock in connection with
such conversion.</P>
<P>4.10&nbsp;&nbsp;&nbsp;<U><STRONG>Reservation of Stock Issuable Upon Conversion</STRONG></U>.
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 11 Class K 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 11
Class K 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 11 Class K 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.</P>&nbsp;
<P>
<CENTER>-7-</CENTER>
<P></P>
<P>4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Fractional Shares</STRONG></U>. No fractional share shall be
issued upon the conversion of any share or shares of Series 11 Class K Preferred
Stock. All shares of Common Stock (including fractions thereof) issuable upon
conversion of more than one share of Series 11 Class K 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.</P>
<P>4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notices</STRONG></U>. Any notices required by the provisions
of this Part 4 to be given to the holders of shares of Series 11 Class K
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.</P>
<P>4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Business Day</STRONG></U>. 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 permitted to
close.</P>
<P><STRONG><U>Part 5 - Redemption</U></STRONG>.</P>
<P>5.1<STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Redemption at Corporation's Option</U></STRONG>. Except as
otherwise provided in this Section 5.1, at any time, and from time to time, 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 11 Class K Preferred Stock at the following cash redemption prices if
redeemed during the following periods: (i)<STRONG> </STRONG>within one year
from<STRONG> </STRONG>July 15, 1999 - $1,100 per share, and (ii) after one year
from<STRONG> </STRONG>July 15, 1999 - $1,200 per share (as applicable, the
redemption price of $1,100 or $1,200 is referred to herein as the "Redemption
Price").</P>
<P>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Redemption</STRONG></U>. Prior to any date
stipulated by the Corporation for the redemption of Series 11 Class K 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 11 Class K
Preferred Stock. The Redemption Notice shall state: (i) the Redemption Date of
such shares, (ii) the number of Series 11 Class K 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 11
Class K Preferred Stock to be redeemed from such holder, and (iv) instructions
as to how to specify to the Corporation the number of Series 11 Class K
Preferred Stock to be redeemed as provided in this Part 5 and, if the Redemption
Notice is mailed to the Holder after the first year from the date of issuance of
the Series 11 Class K Preferred Stock, the number of shares to be converted into
Common Stock as provided in Part 4 hereof.</P>
<P>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Redemption</STRONG></U>. Prior to any date
stipulated by the Corporation for the redemption of Series 11 Class K 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 11 Class K
Preferred Stock. The Redemption</P>&nbsp;
<P>
<CENTER>-8-</CENTER>
<P></P>
<P>Notice shall state: (i) the Redemption Date of such shares, (ii) the number
of Series 11 Class K 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 11 Class K Preferred
Stock to be redeemed from such holder, and (iv) instructions as to how to
specify to the Corporation the number of Series 11 Class K Preferred Stock to be
redeemed as provided in this Part 5 and, if the Redemption Notice is mailed to
the Holder after the first year from the date of issuance of the Series 11 Class
K Preferred Stock, the number of shares to be converted into Common Stock as
provided in Part 4 hereof.</P>
<P>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rights of Conversion Upon Redemption</STRONG></U>. If the
redemption occurs during the first 12 months after the issuance of the Series 11
Class K Preferred Stock, the holder may not convert any redeemed shares. If the
redemption occurs pursuant to Section 5.1 hereof, the Holder of the Series 11
Class K Preferred Stock shall not have the right to convert those outstanding
shares of Series 11 Class K Preferred Stock that the Company is redeeming after
receipt of the Redemption Notice. If the redemption occurs pursuant to Section
5.2 hereof, then, upon receipt of the Redemption Notice, any holder of Series 11
Class K Preferred Stock shall have the next five business days during which it
may exercise the option, at its sole election, to specify what portion of its
Series 11 Class K 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, except that, notwithstanding any provision
of such Part 4 to the contrary, after one year from the date of first issuance
of the Series 11 Class K Preferred Stock, such holder shall have the right to
convert into Common Stock that number of Series 11 Class K Preferred Stock
called for redemption in the Redemption Notice.</P>
<P>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Surrender of Certificates</STRONG></U>. On or before the
Redemption Date in respect of any Series 11 Class K 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 5.5 hereof, to the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered share
certificate shall be canceled and retired. 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 11 Class K 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.</P><P>5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment</STRONG></U>. On the Redemption Date in respect of any
Series 11 Class K 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 First Year
Redemption Price or the Redemption Price, whichever is applicable, of all such
shares called from redemption (less the aggregate Redemption Price for those
Series 11 Class K Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to convert Series 11
Class K Preferred Stock</P>
<P>&nbsp;</P>
<P>
<CENTER>-9-</CENTER>
<P></P>&nbsp;
<P>into Common Stock), with irrevocable instructions and authority to the bank or
trust company to pay, on or after the Redemption Date, the First Year Redemption
Price or the Redemption Price, whichever is applicable, 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 First Year Redemption
Price or the Redemption Price, whichever is applicable, 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 First Year
Redemption Price or the Redemption Price, whichever is applicable, in respect of
their shares only from the Corporation.</P>
<P><STRONG><U>Part 6 - Parity with Other Shares of Series 11 Class K Preferred
Stock and Priority</U></STRONG>.</P>
<P>6.1&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rateable Participation</STRONG></U>. If any cumulative
dividends or return of capital in respect of Series 11 Class K 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.</P>
<P>6.2&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Ranking</STRONG></U>. For purposes of this resolution, any
stock of any class or series of the Corporation shall be deemed to rank:</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior or senior to the shares of this Series 11 Class K Preferred Stock
either as&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to dividends or upon liquidation, if the holders of such class or
classes shall be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;entitled to the receipt of dividends or of amounts
distributable upon dissolution,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation or winding up of the Corporation,
whether voluntary or involuntary,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as the case may be, in preference or priority
to the holders of shares of this&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series 11 Class K Preferred Stock;</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;&nbsp;&nbsp;On a parity with, or equal to, shares of this Series 11 Class K
Preferred Stock,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;either as to dividends or upon liquidation, whether or not the
dividend rates,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividend payment dates, or redemption or liquidation prices per
share or sinking&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;fund provisions, if any, are different from those of this
Series 3 Class C Preferred&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock, if the holders of such stock are entitled to
the receipt of dividends or of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;amounts distributable upon dissolution,
liquidation or winding up of the Corporation,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether voluntary or involuntary,
in proportion to their respective dividend rates or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation prices, without
preference or priority, one over the other, as between&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the holders of such stock
and over the other, as between the holders of such stock&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and the holders of
shares of this Series 11 Class K Preferred Stock; and,</P>
<P>&nbsp;</P>
<P>
<CENTER>-10-</CENTER>
<P></P>&nbsp;<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junior to shares of this Series 11 Class K Preferred Stock, either as
to dividends&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or upon liquidation, if such class or series shall be Common Stock
or if the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;holders of shares of this Series 11 Class K Preferred Stock shall be
entitled to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;receipt of dividends or of amounts distributable upon dissolution,
liquidation or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;winding up of the Corporation, whether voluntary or involuntary,
as the case&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;may be, in preference or priority to the holders of shares of such
class or series.</P>
<P><STRONG><U>Part 7 - Amendment and Reissue</U></STRONG>.</P>
<P>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Amendment</STRONG></U>. If any proposed amendment to the
Corporation's Certificate of Incorporation would alter or change the powers,
preferences or special rights of the Series 11 Class K Preferred Stock so as to
affect such adversely, then the Corporation must obtain the affirmative vote of
such amendment to the Certificate of Incorporation at a duly called and held
series meeting of the holders of the Series 11 Class K Preferred Stock or
written consent by the holders of a majority of the Series 11 Class K Preferred
Stock then outstanding. Notwithstanding the above, the number of authorized
shares of any class or classes of stock may be increased or decreased (but not
below the number of shares thereof outstanding) by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to vote thereon,
voting together as a single class, irrespective of this Section 7.1 or the
requirements of Section 242 of the GCL.</P>
<P>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Authorized</STRONG></U>. Any shares of Series 11 Class K
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.</P>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER>-11-</CENTER>
<P></P>
<p align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 12:31 PM 07/15/1999&nbsp;&nbsp;<br>
991291289 - 2249849</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<P>
<CENTER><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 12 CLASS L CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></CENTER>
<P></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 12 Class L 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 12 Class L Convertible Preferred
Stock as set forth in the attached resolutions.</P>
<P>Dated: July 15, 1999</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC.</P><BR WP="BR1"><BR WP="BR2"><BR
WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_________________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board
<P>ATTEST:</P><BR WP="BR1"><BR WP="BR2">/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</CENTER>
<P>
<CENTER>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 12 CLASS L CONVERTIBLE PREFERRED STOCK<br>
</CENTER>
<P><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS</STRONG>, 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, restrictions and
conditions attaching to the shares of each such series;</P>
<P><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS</STRONG>, 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 12 Class L Convertible Preferred Stock, par value $.001 per share (the
"Series 12 Class L Preferred Stock");</P>
<P><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, BE IT RESOLVED,</STRONG> that the Series 12 Class L
Preferred Stock shall consist of nine hundred sixteen (916) shares and no more
and shall be designated as the Series 12 Class L Convertible Preferred Stock,
and the preferences, rights, privileges, restrictions and conditions attaching
to the Series 12 Class L Preferred Stock shall be as follows:</P>
<P><STRONG><U>Part 1 - Voting and Preemptive Rights</U></STRONG>.</P>
<P>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Voting Rights</STRONG></U>. Except as otherwise provided in
Part 7 hereof or under Section 242(b)(2) of the General Corporation Law of the
State of Delaware (the "GCL"), the holders of the Series 12 Class L Preferred
Stock shall have no voting rights whatsoever. To the extent that under Section
242(b)(2) of the GCL or Part 7 hereof, the holders of the Series 12 Class L
Preferred Stock are entitled to vote on a matter, each share of the Series 12
Class L Preferred Stock shall be entitled one (1) vote for each outstanding
share of Series 12 Class L Preferred Stock. Holders of the Series 12 Class L
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.</P>
<P>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Preemptive Rights</STRONG></U>. The Series 12 Class L
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.</P>&nbsp;
<p>&nbsp;</p>
<P>
<CENTER>-1-</CENTER>
<P></P>&nbsp;
<P><STRONG><U>Part 2 - Liquidation Rights</U></STRONG>.</P>
<P>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Liquidation</STRONG></U>. If the Corporation shall be
voluntarily or involuntarily liquidated, dissolved or wound up at any time when
any shares of the Series 12 Class L Preferred Stock shall be outstanding, the
holders of the then outstanding Series 12 Class L Preferred Stock shall have a
preference in distribution of the Corporation's property available for
distribution to the holders of the Corporation's Common Stock equal to $1,000
consideration per outstanding share of Series 12 Class L Preferred Stock, 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.</P>
<P>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment of Liquidation Preferences</STRONG></U>. Subject to
the provisions of Part 6 hereof, all amounts to be paid as Liquidation
Preference to the holders of Series 12 Class L 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.</P>
<P>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Rights After Payment</STRONG></U>. After the payment to the
holders of the shares of the Series 12 Class L Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the holders of the
Series 12 Class L Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.</P>
<P>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Assets Insufficient to Pay Full Liquidation
Preference</STRONG></U>. In the event that the assets of the Corporation
available for distribution to the holders of shares of the Series 12 Class L
Preferred Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be 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 12
Class L Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series 12 Class L Preferred Stock and shares of such other class or series
ranking on a parity with the shares of this Series 12 Class L 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.</P>
<P><STRONG><U>Part 3 - Dividends</U></STRONG>. The holders of the Series 12
Class L Preferred Stock are entitled to receive if, when and as declared by the
Board out of funds legally available therefor, cumulative 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%)</P>&nbsp;
<p>&nbsp;</p>
<P>
<CENTER>-2-</CENTER>
<P></P>&nbsp;
<P>per annum of the Liquidation Value (as defined below) of each issued and
outstanding share of Series 12 Class L Preferred Stock (the "Dividend Rate").
The Liquidation Value of the Series 12 Class L Preferred Stock shall be $1,000
per outstanding share of the Series 12 Class L 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 June 30, 1998
(each, a "Dividend Declaration Date"). Dividends shall be paid only with respect
to shares of Series 12 Class L Preferred Stock actually issued and outstanding
on a Dividend Declaration Date and to holders of record of the Series 12 Class L
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
March 1, 1998. 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 12 Class L 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 12 Class L 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 12 Class L Preferred Stock
shall have been paid or declared and set aside for payment.</P>
<P><STRONG><U>Part 4 - Conversion</U></STRONG>. The holders of the Series 12
Class L Preferred Stock shall have rights to convert the shares of Series 12
Class L Preferred Stock into shares of the Corporation's Common Stock, par value
$.001 per share ("Common Stock"), as follows (the "Conversion Rights"):</P>
<P>4.1 <STRONG><U>No Right to Convert</U></STRONG><U></U>. The Series 12 Class L
Preferred shall not be convertible into shares of Common Stock until after July
15, 2000.</P>
<P><U></U>4.2 <STRONG><U>Right to Convert</U></STRONG><U></U>. The Series 12
Class L Preferred Stock may be convertible into shares of Common Stock at any
time after July 15, 2000.</P>
<P>4.3 <STRONG><U>Conversion Price</U></STRONG>. Subject to the terms hereof, as
used herein, the Conversion Price per outstanding share of Series 12 Class L
Preferred Stock shall be $1.8125, except that, in the event the average closing
bid price per share of the Common Stock as reported on the
over-the-counter</P>&nbsp;
<p>&nbsp;</p>
<P>
<CENTER>-3-</CENTER>
<P></P>&nbsp;
<P>market, or the closing sale price if listed on a national securities
exchange, for the five (5) trading days prior to the particular date of
conversion shall be less than $2.265, the Conversion Price for only such
particular conversion shall be the product of 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 in connection with such conversion multiplied by eighty
percent (80%), subject to the provisions of this Section 4.3. Notwithstanding
the foregoing, the Conversion Price shall not be less than a minimum of $1.50
per share ("Minimum Conversion Price") for a period of twenty-four (24) months
from the date of issuance of the Series 12 Class L Preferred Stock. If any of
the outstanding shares of Series 12 Class L 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 12 Class L Preferred Stock so surrendered for conversion by
(b) the Conversion Price as of such conversion. At the time of conversion of
shares of the Series 12 Class L 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 whole shares of 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 12 Class L Preferred Stock so converted divided by the Stock
Dividend Price, as defined in Part 3 hereof, in effect at the date of
conversion.</P>
<P>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Conversion</STRONG></U>. Any holder of the Series
12 Class L Preferred Stock who wishes to exercise its Conversion Rights pursuant
to Section 4.1 of this Part 4 must, if such shares are not being held in escrow
by the Corporation's attorneys, surrender the certificate therefor at the
principal executive office of the Corporation, and give written notice, which
may be via facsimile transmission, to the Corporation at such office that it
elects to convert the same (the "Conversion Notice"). In the event that the
shares of Series 12 Class L Preferred Stock are being held in escrow by the
Corporation's attorneys, no delivery of the certificates shall be required. The
Corporation shall, within five (5) business days after receipt of an appropriate
and timely Conversion Notice (and certificate, if necessary), issue to such
holder of Series 12 Class L 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 12 Class L 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</P>&nbsp;
<P>
<CENTER>-4-</CENTER>
<P></P>&nbsp;
<P>made only after both the certificate for the shares of Series 12 Class L
Preferred Stock to be converted have been surrendered and the Conversion Notice
is received by the Corporation (or in the event that no surrender of the
Certificate is required, then only upon the receipt by the Corporation of the
Conversion Notice) (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. If the Corporation
fails to deliver to the holder or its agent the certificate representing the
shares of Common Stock that the holder is entitled to receive as a result of
such conversion of the Series 12 Class L Preferred Stock within seven (7)
business days after receipt by the Corporation from the holder of an appropriate
and timely Conversion Notice and certificates pursuant to the terms of this
Section 4.3 ("Seven (7) Business Day Period"), then, upon the written demand of
RBB Bank Aktiengesellschaft ("RBB Bank"), the holder of the Series 12 Class L
Preferred Stock, for payment of the penalty described below in this Section 4.3,
which demand must be received by the Corporation no later than ten (10) calendar
days after the expiration of such Seven (7) Business Day Period, the Corporation
shall pay to RBB Bank the following penalty for each business day after the
Seven (7) Business Day Period until the Corporation delivers to the holder or
its agent the certificate representing the shares of Common Stock that the
holder is entitled to receive as a result of such conversion: business day eight
(8) - U.S. $1,000; business day nine (9) - U.S. $2,000, and each business day
thereafter an amount equal to the penalty due on the immediately preceding
business day times two (2) until the Corporation delivers to the holder or its
agent the certificate representing the shares of Common Stock that the holder is
entitled to receive as a result of such conversion. </P>
<P>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Merger or Consolidation</STRONG></U>. 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 12 Class L Preferred Stock are outstanding and prior to the date that the
Corporation's Registration Statement covering up to 1,379,311 shares of Common
Stock issuable upon the conversion of the Series 12 Class L 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 12 Class L
Preferred Stock then outstanding shall have the right to convert such share
of</P>&nbsp;
<P>
<CENTER>-5-</CENTER>
<P></P>
<P>Series 12 Class L 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 12
Class L 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.</P>
<P>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments to Conversion Price for Stock Dividends and for
Combinations or Subdivisions of Common Stock</STRONG></U>. If the Corporation at
any time or from time to time while shares of Series 12 Class L 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.</P>
<P>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments for Reclassification and
Reorganization</STRONG></U>. If the Common Stock issuable upon conversion of the
Series 12 Class L 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
shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series 12 Class L
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 12 Class L 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
12 Class L Preferred Stock immediately before that change.</P>
<P>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Common Stock Duly Issued</STRONG></U>. All Common Stock which
may be issued upon conversion of Series 12 Class L 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.</P>
<P>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notice of Adjustments</STRONG></U>. 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</P>&nbsp;
<P>
<CENTER>-6-</CENTER>
<P></P>&nbsp;
<P>prepare and furnish to each holder of Series 12 Class L Preferred Stock a
notice setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment is based.</P>
<P>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Issue Taxes</STRONG></U>. 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 12 Class L
Preferred Stock pursuant thereto; <U>provided, however</U>, that the Corporation
shall not be obligated to pay any transfer taxes resulting from any transfer
requested by any holder of Series 12 Class L Preferred Stock in connection with
such conversion.</P>
<P>4.10&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Reservation of Stock Issuable Upon Conversion</STRONG></U>.
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 12 Class L 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 12
Class L 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 12 Class L 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.</P>
<P>4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Fractional Shares</STRONG></U>. No fractional shares shall be
issued upon the conversion of any share or shares of Series 12 Class L Preferred
Stock. All shares of Common Stock (including fractions thereof) issuable upon
conversion of more than one share of Series 12 Class L 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.</P>
<P>4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notices</STRONG></U>. Any notices required by the provisions
of this Part 4 to be given to the holders of shares of Series 12 Class L
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.</P>
<P>4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Business Day</STRONG></U>. 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.</P>&nbsp;
<P>
<CENTER>-7-</CENTER>
<P></P>&nbsp;
<P><STRONG><U>Part 5 - Redemption</U></STRONG>.</P>
<P>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Redemption at Corporation's Option</STRONG></U>. Except as
otherwise provided in this Section 5.1, at any time, and from time to time, 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, (i) for a period of 120
days from the date of issuance of the Series 12 Class L Preferred Stock up to an
aggregate of 300 shares of the Series 12 Class L Preferred Stock at the cash
redemption price of $1,000 per share, and (ii) the then outstanding Series 12
Class L Preferred Stock at the following cash redemption prices if redeemed
during the following periods: (a)<STRONG> </STRONG>within one year from<STRONG>
</STRONG>July 15, 1999 - $1,100 per share, except as otherwise provided in (i)
above and (b) after one year from<STRONG> </STRONG>July 15, 1999 - $1,200 per
share (as applicable, the redemption price of $1,000, $1,100 or $1,200 is
referred to herein as the "Redemption Price").</P>
<P>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Redemption</STRONG></U>. Prior to any date
stipulated by the Corporation for the redemption of Series 12 Class L 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 12 Class L
Preferred Stock. The Redemption Notice shall state: (i) the Redemption Date of
such shares, (ii) the number of Series 12 Class L 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 12
Class L Preferred Stock to be redeemed from such holder, and (iv) instructions
as to how to specify to the Corporation the number of Series 12 Class L
Preferred Stock to be redeemed as provided in this Part 5 and, if the Redemption
Notice is mailed to the Holder after the first year from the date of issuance of
the Series 12 Class L Preferred Stock, the number of shares to be converted into
Common Stock as provided in Part 4 hereof.</P>
<P>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rights of Conversion Upon Redemption</STRONG></U>. If the
redemption occurs during the first 12 months after the issuance of the Series 12
Class L Preferred Stock, the holder may not convert any redeemed shares. If the
redemption occurs after the first twelve months after the first issuance of
Series 12 Class L Preferred Stock, then, upon receipt of the Redemption Notice,
any holder of Series 12 Class L Preferred Stock shall have five business days
during which it may exercise the option, at its sole election, to specify what
portion of its Series 12 Class L 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, except that,
notwithstanding any provision of such Part 4 to the contrary, after one year
from the date of first issuance of the Series 12 Class L Preferred Stock, such
holder shall have the right to convert into Common Stock that number of Series
12 Class L Preferred Stock called for redemption in the Redemption
Notice.</P>&nbsp;
<P>
<CENTER>-8-</CENTER>
<P></P>&nbsp;
<P>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Surrender of Certificates</STRONG></U>. On or before the
Redemption Date in respect of any Series 12 Class L 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, and each surrendered share
certificate shall be canceled and retired. 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 12 Class L 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.</P>
<P>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment</STRONG></U>. On the Redemption Date in respect of any
Series 12 Class L Preferred Stock or prior thereto, the Corporation shall
deposit with any bank or trust company having a capital and surplus of at least
$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 12 Class L Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to convert Series 12
Class L 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.</P>
<P><STRONG><U>Part 6 - Parity with Other Shares of Series 12 Class L Preferred
Stock and Priority</U></STRONG>.</P>
<P>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rateable Participation</STRONG></U>. If any cumulative
dividends or return of capital in respect of Series 12 Class L 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.</P>
<P>&nbsp;</P>
<P>
<CENTER>-9-</CENTER>
<P></P>
<P>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Ranking</STRONG></U>. For purposes of this resolution, any
stock of any class or series of the Corporation shall be deemed to rank:</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior or senior to the shares of this Series 12 Class L Preferred Stock
either as to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or upon liquidation, if the holders of such class or
classes shall be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;entitled to the receipt of dividends or of amounts
distributable upon dissolution,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation or winding up of the Corporation,
whether voluntary or involuntary,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as the case may be, in preference or priority
to the holders of shares of this&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series 12 Class L Preferred Stock;</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a parity with, or equal to, shares of this Series 12 Class L
Preferred Stock,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;either as to dividends or upon liquidation, whether or not the
dividend rates,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividend payment dates, or redemption or liquidation prices per
share or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sinking fund provisions, if any, are different from those of this
Series 12 Class L&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock, if the holders of such stock are entitled to
the receipt of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or of amounts distributable upon dissolution,
liquidation or winding&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;up of the Corporation, whether voluntary or involuntary,
in proportion to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;their respective dividend rates or liquidation prices, without
preference or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;priority, one over the other, as between the holders of such stock
and over&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the other, as between the holders of such stock and the holders of
shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of this Series 12 Class L Preferred Stock; and,</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junior to shares of this Series 12 Class L Preferred Stock, either as
to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or upon liquidation, if such class or series shall be Common Stock&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or if the holders of shares of this Series 12 Class L Preferred Stock shall&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;be
entitled to receipt of dividends or of amounts distributable upon&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dissolution,
liquidation or winding up of the Corporation, whether voluntary&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or involuntary,
as the case may be, in preference or priority to the holders&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of shares of such
class or series.</P>
<P><STRONG><U>Part 7 - Amendment and Reissue</U></STRONG>.</P>
<P>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Amendment</STRONG></U>. If any proposed amendment to the
Corporation's Certificate of Incorporation (the "Articles") would alter or
change the powers, preferences or special rights of the Series 12 Class L
Preferred Stock so as to affect such adversely, then the Corporation must obtain
the affirmative vote of such amendment to the Articles at a duly called and held
series meeting of the holders of the Series 12 Class L Preferred Stock or
written consent by the holders of a majority of the Series 12 Class L Preferred
Stock then outstanding. Notwithstanding the above or the provisions of Section
242(b)(2) of the GCL, the number</P>&nbsp;
<P>
<CENTER>-10-</CENTER>
<P></P>&nbsp;
<P>of authorized shares of any class or classes of stock of the Corporation may be
increased or decreased (but not below the number of shares thereof outstanding)
by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon, voting together as a single class,
irrespective of the provisions of this Section 7.1 or Section 242(b)(2) of the
GCL.</P>
<P>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Authorized</STRONG></U>. Any shares of Series 12 Class L
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.</P>
<P></P>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER>-11-</CENTER>
<P>&nbsp;</P>
<P align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 12:32 PM 07/15/1999&nbsp;&nbsp;<br>
991291291 - 2249849</font>&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P>
<CENTER><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 13 CLASS M CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></CENTER>
<p><BR
WP="BR2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 13 Class M 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 13 Class M Convertible Preferred
Stock as set forth in the attached resolutions.</P>
<P>Dated: July 15, 1999</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC.</P><BR WP="BR1"><BR WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___________________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board
<P>ATTEST:</P><BR WP="BR1"><BR WP="BR2">
/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary
<p>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>
<CENTER><b>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</b></CENTER>
</p>
<P>
<CENTER><b>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 13 CLASS M CONVERTIBLE PREFERRED STOCK</b></CENTER>
<P align="center"><STRONG>RE: DESIGNATION OF SERIES 13 CLASS M PREFERRED STOCK</STRONG>.</P><BR
WP="BR1"><STRONG>RESOLVED:</STRONG> That the designations, powers, preferences and
rights of the Series 13 Class M Convertible Preferred Stock be, and they hereby
are, as set forth below:
<P><STRONG></STRONG><STRONG>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of Shares of Common Stock of Series 13
Class M Convertible Preferred Stock </STRONG></P>
<P>The Corporation hereby authorizes the issuance of up to two thousand two
hundred fifty-two (2,252) shares of Series 13 Class M Convertible Preferred
Stock par value $.001 per share (the "Preferred Stock"). This Preferred Stock
shall pay an annual dividend based on a 365 day calendar year of 4% of the
Liquidation Value (as defined in Section 3 hereof) ("Dividend Rate"), payable
semiannually within ten (10) business days after each subsequent June 30th and
December 31st (each a "Dividend Declaration Date"), and shall be payable in cash
or shares of the Corporation's par value $.001 per share common stock (Common
Stock) at the Corporation's option. The first Dividend Declaration Date shall be
December 31st, 1998.</P>
<P>In the event that the Corporation elects to pay the accrued dividends due as
of a Dividend Declaration Date on the outstanding shares of Preferred Stock in
Common Stock of the Corporation, the Holder of each share of Preferred Stock
shall receive that 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 Corporation's Common Stock as reported on the
National Association of Securities Dealers Automated Quotation system
("NASDAQ"), or if the Common Stock is not listed for trading on the NASDAQ but
is listed for trading on a national securities exchange, the average closing bid
price of the Common Stock as quoted on such national 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 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 Preferred Stock shall have been
paid or declared and set aside for payment.</P>&nbsp;
<P>
<CENTER>-1-</CENTER>
<P></P>
<P><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voting.</b></P>
<P>Except as provided under Section 242 of the GCL, holders of Preferred Stock
(the "Holders") shall not have the right to vote on any matter. Notwithstanding
the provisions of Section 242 of the GCL or Section 4 hereof, the number of
authorized shares of any class or classes of stock of the Corporation may be
increased or decreased (but not below the number of shares thereof outstanding)
by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon, voting together as a single class,
irrespective of the provisions of Section 242 of the GCL.</P>
<P><STRONG>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liquidation.</STRONG></P>
<P>In the event of a voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the Holders of Preferred Stock shall be entitled
to receive out of the assets of the Corporation legally available for
distribution to holders of its capital stock, before any payment or distribution
shall be made to holders of shares of Common Stock or any other class of stock
ranking junior to the Preferred Stock, an amount per share of Preferred Stock
equal to $1,000 (the "Liquidation Value") plus any accrued and unpaid dividends
on the Preferred Stock. If upon such liquidation, dissolution, or winding up of
the Corporation, whether voluntary or involuntary, the assets to be distributed
among the Holders of Preferred Stock shall be insufficient to permit payment to
the Holders of Preferred Stock of the amount distributable as aforesaid, then
the entire assets of the Corporation to be so distributed shall be distributed
ratably among the Holders of Preferred Stock and shares of such other classes or
series ranking on a parity with the shares of this Preferred Stock in proportion
to the full distributable amounts for which holders of all such parity shares
are entitled upon such distribution, liquidation, or winding up. Upon any such
liquidation, dissolution or winding up of the Corporation, after the Holders of
Preferred Stock shall have been paid in full the amounts to which they shall be
entitled, the remaining net assets of the Corporation may be distributed to the
holders of stock ranking on liquidation junior to the Preferred Stock and the
Holders of the Preferred Stock shall have no right or claim to any of the
remaining assets of the Corporation. Written notice of such liquidation,
dissolution or winding up, stating a payment date, the amount of the liquidation
payments and the place where said liquidation payments shall be payable, shall
be given by mail, postage prepaid or by telex or facsimile to non-U.S.
residents, not less than 10 days prior to the payment date stated therein, to
the Holders of record of Preferred Stock, such notice to be addressed to each
such Holder at its address as shown by the records of the Corporation. For
purposes hereof the shares of Common Stock, shall rank on liquidation junior to
the Preferred Stock.</P>
<P><STRONG>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restrictions.</STRONG></P>
<P>The Corporation will not amend or modify the terms of its Restated
Certificate of Incorporation so as to adversely alter or change the Preferred
Stock at any time when shares of Preferred Stock are outstanding, without the
approval of the Holders of at least a majority of the then outstanding shares of
Preferred Stock given in<STRONG> </STRONG>writing or</P>&nbsp;
<P>
<CENTER>-2-</CENTER>
<P></P>
<P>by vote at a meeting, consenting or voting (as the case may be) separately as
a series, except where the vote or written consent of the Holders of a greater
number of shares of Common Stock of the Corporation is required by law or by the
Corporation's Certificate of Incorporation, as amended.</P>
<P><STRONG></STRONG><STRONG>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Optional Conversion.</STRONG></P>
<P>The Holders of shares of Preferred Stock shall have the following conversion
rights to convert the shares of Preferred Stock into shares of Common Stock of
the Corporation:</P>
<P><STRONG>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Right to Convert.</STRONG> The Preferred Stock shall not be
convertible into shares of Common Stock until after July 15, 2000.</P>
<P><STRONG>(b)&nbsp;&nbsp;&nbsp;&nbsp;Conversion Dates.</STRONG> The Preferred Stock may be convertible
into shares of Common Stock at any time after July 15, 2000.</P>
<P><STRONG>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right to Convert; Conversion Price</STRONG>. Subject to the terms
hereof, as used herein, the term Conversion Price per outstanding share of
Preferred Stock shall be One Dollar and 875/100 ($1.875); except that after the
expiration of one hundred and eighty (180) days after the Closing Date if the
average of the closing bid price per share of Common Stock quoted on the NASDAQ
(or the closing bid price of the Common Stock as quoted on the national
securities exchange if the Common Stock is not listed for trading on the NASDAQ
but is listed for trading on a national securities exchange) for the five (5)
trading days immediately prior to the particular date of each Conversion Notice
(as defined below) is less than Two Dollars and 34/100 ($2.34), then the
Conversion Price for that particular conversion shall be eighty percent (80%) of
the average of the closing bid price of the Common Stock on the NASDAQ (or if
the Common Stock is not listed for trading on the NASDAQ but is listed for
trading on a national securities exchange then eighty percent (80%) of the
average of the closing bid price of the Common Stock on the national securities
exchange) for the five (5) trading days immediately prior to the particular date
of the Conversion Notice. Notwithstanding the foregoing, the Conversion Price
shall not be less than a minimum of $1.50 per share ("Minimum Conversion Price")
for a period of twenty-four (24) months from the date of issuance of the
Preferred Stock. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the outstanding shares of Preferred Stock are converted, in whole
or in part, into Common Stock pursuant to the terms of this Section 5(b), 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 Stated Value
of the Preferred Stock so surrendered for conversion by (b) the Conversion Price
in effect on the date of that particular Conversion Notice relating to such
conversion. At the time of conversion of shares of the 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 on the shares of Preferred
so converted to the date of the Conversion Notice relating to such 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 the Conversion Notice </P>&nbsp;
<P>
<CENTER>-3-</CENTER>
<P></P>
<P>relating to such conversion of the shares of Preferred Stock so converted
divided by the Stock Dividend Price, in effect at the date of the Conversion
Notice relating to such conversion.</P>
<P><STRONG>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion Notice</STRONG>. The right of conversion shall be
exercised by the Holder thereof by telecopying or faxing an executed and
completed written notice signed by an authorized representative of the Holder,
("Conversion Notice") to the Corporation that the Holder elects to convert a
specified number of shares of Preferred Stock representing a specified Stated
Value thereof into shares of Common Stock and by delivering by express courier
the certificate or certificates of Preferred Stock being converted to the
Corporation at its principal office (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the Holders
of the Preferred Stock). The business date indicated on a Conversion Notice
which is telecopied to and received by the Corporation in accordance with the
provisions hereof shall be deemed a Conversion Date. The Conversion Notice shall
include therein the Stated Value of shares of Preferred Stock to be converted,
and a calculation (a) of the Stock Dividend Price, (b) the Conversion Price, and
(c) the number of Shares of Common Stock to be issued in connection with such
conversion. The Corporation shall have the right to review the calculations
included in the Conversion Notice, and shall provide notice of any discrepancy
or dispute therewith within three (3) business days of the receipt thereof. The
Holder shall deliver to the Corporation an original Conversion Notice and the
original Preferred to be converted within three (3) business days from the date
of the Conversion Notice.</P>
<P><STRONG>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Certificates - Time Conversion Effected</STRONG>.
Promptly, but in<STRONG> </STRONG>no event more than six (6) business days,
after the receipt by facsimile of the Conversion Notice referred to in
Subparagraph (5)(c); and provided within the six (6) business days the
Corporation receives the certificate or certificates for the shares of Preferred
Stock to be converted, the Corporation shall issue and deliver, or cause to be
issued and delivered, to the Holder, registered in the name of the Holder, a
certificate or certificates for the number of whole shares of Common Stock into
which such shares of Preferred Stock are converted. Such conversion shall be
deemed to have been effected as of the close of business on the date on which
the telecopy or facsimile Conversion Notice shall have been received by the
Corporation, and the rights of the Holder of such share or shares of Preferred
Stock shall cease, at such time, and the Holder or Holders shall be deemed to
have become the Holder or Holders of record of the shares of Common Stock
represented thereby. </P>
<P>In the event that the shares of Common Stock issuable upon conversion of the
Preferred, is not delivered within six (6) business days of the date the Company
receives the Conversion Notice, the Company shall pay to the Buyer, by wire
transfer, as liquidated damages for such failure and not as a penalty, for each
$100,000 of Preferred sought to be converted, $500 for each of the first five
(5) calendar days and $1,000 per calendar day thereafter that the shares of
Common Stock are not delivered, which liquidated damages shall begin to run from
the seventh (7th) business day after the Conversion Date. Any and all payments
required pursuant to this paragraph shall be payable only in cash.
Notwithstanding the above, liquidated damages shall not exceed $2,000.00 per
day. In addition to the liquidated damages set forth herein, in the event the
Company fails to deliver the shares of Common Stock within six (6) business days
after the Conversion date, the</P>&nbsp;
<P>
<CENTER>-4-</CENTER>
<P></P>
<P>Company agrees to issue the larger number of shares of Common Stock derived
from (i) the original Conversion Notice, or (ii) utilizing the five lowest
closing bid prices of the Company's shares of Common Stock beginning on the
Conversion Date and ending on the day the shares of Common Stock are delivered.
The Company understands that a delay in the issuance of the shares of Common
Stock could result in economic loss to the Holder. Nothing contained herein, or
in the Preferred shall limit the Holder's rights to pursue actual damages for
the Company's failure to issue and deliver shares of Common Stock to the Holder
in accordance with the terms of the Certificate of Designations, and this
Agreement. </P>
<P><STRONG>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fractional Shares of Common Stock.</STRONG> No fractional shares
of Common Stock shall be issued upon conversion of any Preferred Stock into
shares of Common Stock. All fractional shares of Common Stock shall be
aggregated and then rounded down to the nearest whole share of Common Stock. In
case the number of shares of Preferred Stock represented by the certificate or
certificates surrendered pursuant to Subparagraph 5(b) exceeds the number of
shares of Common Stock converted, the Corporation shall, upon such conversion,
execute and deliver to the Holder, at the expense of the Corporation, a new
certificate or certificates for the number of shares of Preferred Stock
represented by the certificate or certificates surrendered which are not to be
converted.</P>
<P><STRONG>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Merger or Consolidation</STRONG>. 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
Preferred Stock are outstanding and prior to the date that the Corporation's
Registration Statement covering all the shares of Common Stock issuable upon the
conversion of the Preferred Stock is declared effective by the U.S. Securities
and Exchange Commission ("Commission"), the Corporation or such successor
corporation as the case may be, shall make appropriate provision so that the
Holder of each share of Preferred Stock then outstanding shall have the right to
convert such share of 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
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 Section 5.</P>
<P>In the event of a Merger or Sale, where the Corporation is not the surviving
Corporation, the Holder shall have the right to redeem all of the outstanding
shares of Preferred Stock at 120% of the Liquidation Value of each share of
Preferred Stock then outstanding plus all accrued and unpaid dividends (the
"Redemption Amount"). The Corporation shall pay this Redemption Amount in cash
within ten (10) business days of receipt by the Corporation of notice from the
Holder, and receipt by the Corporation of all outstanding shares of Preferred
Stock duly endorsed by the Holder to the Corporation.</P>&nbsp;
<P>
<CENTER>-5-</CENTER>
<P></P>
<P><b>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to Conversion Price for Stock Dividends and for Combinations
or Subdivisions of Common Stock</b>.&nbsp;&nbsp;If the Corporation at any time or from time to
time while shares of Preferred Stock are issued and outstanding shall declare or
pay, 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 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.</P>
<P><STRONG>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments for Reclassification and Reorganization</STRONG>. If
the Common Stock issuable upon conversion of the Preferred Stock shall be
changed into the same or a different number of shares of Common Stock of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination or shares
of Common Stock provided for in Section 5(g) hereof), the Conversion Price then
in effect shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Preferred Stock shall
be convertible into, in lieu of the number of shares of Common Stock which the
holders of Preferred Stock would otherwise have been entitled to receive, a
number of shares of Common Stock 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 Preferred Stock immediately
before that change.</P>
<P><STRONG>6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption</STRONG>.</P>
<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Redemption at Corporation's Option</STRONG>. Except as otherwise
provided in this Section 6, at any time, and from time to time, 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 (i) for a period of 120 days from the
date of issuance of the Preferred Stock up to an aggregate of 450 shares of
Series 13 Class M Preferred Stock at the cash redemption price of $1,000 per
share and (ii) the then outstanding Series 13 Class M Preferred Stock at the
following cash redemption prices if redeemed during the following periods:
(a)<STRONG> </STRONG>within one year from<STRONG> </STRONG>July 15, 1999 -
$1,100 per share, except as otherwise provided in (i) above, and (b) after one
year from<STRONG> </STRONG>July 15, 1999 - $1,200 per share (as applicable, the
redemption price of $1,000, $1,100 or $1,200 is referred to herein as the
"Redemption Price").</P>
<P>(b)<STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mechanics of Redemption</STRONG>. Prior to any date stipulated by
the Corporation for the redemption of Series 13 Class M 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 13 Class M Preferred
Stock. The Redemption Notice shall state: (i) the Redemption Date of such
shares, (ii) the number of Series 13 Class M 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 13
Class M Preferred Stock to be redeemed from such holder, and (iv)</P>&nbsp;
<P>
<CENTER>-6-</CENTER>
<P></P>
<P>instructions as to how to specify to the Corporation the number of Series 13
Class M Preferred Stock to be redeemed as provided in this Part 6 and, if the
Redemption Notice is mailed to the Holder after the first year from the date of
issuance of the Series 13 Class M Preferred Stock, the number of shares to be
converted into Common Stock as provided in Part 5 hereof.</P>
<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Rights of Conversion Upon Redemption</STRONG>. If the redemption
occurs during the first 12 months after the issuance of the Preferred Stock, the
holder may not convert any redeemed shares. If the redemption occurs after the
first year after the first issuance of Series 13 Class M Preferred Stock, then,
upon receipt of the Redemption Notice, any holder of Series 13 Class M Preferred
Stock shall have five business days during which it may exercise the option, at
its sole election, to specify what portion of its Series 13 Class M Preferred
Stock called for redemption in the Redemption Notice shall be redeemed as
provided in this Part 6 or converted into Common Stock in the manner provided in
Part 5 hereof, except that, notwithstanding any provision of such Part 5 to the
contrary, after one year from the date of first issuance of the Preferred Stock,
such holder shall have the right to convert into Common Stock that number of
Series 13 Class M Preferred Stock called for redemption in the Redemption
Notice.</P>
<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Surrender of Certificates</STRONG>. On or before the Redemption
Date in respect of any Series 13 Class M 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 hereof, to the order of the
person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered share certificate shall be canceled and retired.
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
13 Class M 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.</P>
<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Payment</STRONG>. On the Redemption Date in respect of any Series
13 Class M Preferred Stock or prior thereto, the Corporation shall deposit with
any bank or trust company having a capital and surplus of at least $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 13 Class M Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to convert Series 13
Class M 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</P>
<P>&nbsp;</P>
<P>
<CENTER>-7-</CENTER>
<P></P>
<P>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.</P>
<P><STRONG></STRONG><STRONG>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assignment.</STRONG> </P>
<P>Subject to all applicable restrictions on transfer, the rights and
obligations of the Corporation and the Holder of the Preferred Stock shall be
binding upon and benefit the successors, assigns, heirs, administrators, and
transferees of the parties.</P>
<P><STRONG></STRONG><STRONG>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of Common Stock to be
Reserved.</STRONG></P>
<P>The Corporation, upon the effective date of this Certificate of Designations,
has a sufficient number of shares of Common Stock available to reserve for
issuance upon the conversion of all outstanding shares of Preferred Stock,
pursuant to the terms and conditions set forth in Section 5, and exercise of the
Warrants as defined in Section 12. The Corporation will at all times reserve and
keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon the conversion of Preferred Stock, and exercise of the
Warrants, as herein provided, such number of shares of Common Stock as shall
then be issuable upon the conversion of all outstanding shares of Preferred
Stock, and exercise of the Warrants. The Corporation covenants that all shares
of Common Stock which shall be so issued shall be duly and validly issued, fully
paid and non assessable. The Corporation will take such action as may be
required, if the total number of shares of Common Stock issued and issuable
after such action upon conversion of the Preferred Stock, and exercise of the
Warrants would exceed the total number of shares of Common Stock then authorized
by the Corporation's Certificate of Incorporation, as amended, or would exceed
19.99% of the shares of Common Stock then outstanding if required by law or the
Rules and Regulations of NASDAQ or the National Securities Exchange applicable
to the Corporation to take such action as a result of exceeding such 19.99%, in
order to increase the number of shares of Common Stock to permit the Corporation
to issue the number of shares of Common Stock required to effect conversion of
the Preferred, and exercise of the Warrants, to a number sufficient to permit
conversion of the Preferred Stock, and exercise of the Warrants, including,
without limitation, engaging in reasonable efforts to obtain the requisite
stockholder approval of any necessary amendment to the Corporation's Restated
Certificate of Incorporation, and to obtain shareholders approval in order to
effect conversion of the Preferred Stock, and exercise of the Warrants, if
required by law or the rules or regulations of the NASDAQ or National Securities
Exchange applicable to the Corporation.</P>
<P><STRONG>8(a)</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Shareholder Approval</STRONG>. In connection
with the issuance to the Holder of the shares of Preferred Stock, pursuant to
this Certificate of Designations, the Corporation is also issuing (i) certain
warrants ("RBB Warrants") to the Holder pursuant to the terms of that certain
Private Securities Subscription Agreement dated June 30, 1998 (the "Agreement"),
providing for the purchase of up to 150,000 shares of Common Stock at an
exercise price of $2.50 per share and (ii) certain warrants (collectively, the
"Liviakis Warrants") to Liviakis Financial Communication, Inc. ("Liviakis") and
Robert B. Prag providing for the</P>&nbsp;
<P>
<CENTER>-8-</CENTER>
<P></P>
<P>purchase of up to an aggregate of 2,500,000 shares of Common Stock at an
exercise price of $1.875 per share pursuant to the terms of that Liviakis
Agreement dated June 30, 1998, between Liviakis and the Corporation.</P>
<P>If (i) the aggregate number of shares of Common Stock issued by the
Corporation as a result of any or all of the following: (a) conversion of the
Preferred Stock, (b) payment of dividends accrued on the Preferred Stock (c)
exercise of the RBB Warrants, and (d) exercise of the Liviakis Warrants exceeds
2,388,347 shares of Common Stock (which equals 19.9% of the outstanding shares
of Common Stock of the Corporation as of the date of this Certificate of
Designations) and (ii) the Holder has converted or elects to convert any of the
then outstanding shares of Preferred Stock pursuant to the terms of Section 5 at
a Conversion Price less than $ 1.875 ($1.875 being the market value per share of
Common Stock as quoted on the NASDAQ as of the close of business on June 30,
1998) pursuant to the terms of Section 5(b) hereof, other than if the Conversion
Price is less than $ 1.875 solely as a result of the anti-dilution provisions of
Section 5(g) and (h) hereof, then, notwithstanding anything in Section 5 to the
contrary, the Corporation shall not issue any shares of Common Stock as a result
of receipt of a Conversion Notice unless and until the Corporation shall have
obtained approval of its shareholders entitled to vote on the transactions in
accordance with subparagraphs (25)(H)(i)d, (iv) and (v) of Rule 4310 of the
NASDAQ Marketplace Rules ("Shareholder Approval").</P>
<P>If Shareholder Approval is required as set forth in the above paragraph, the
Corporation shall take all necessary steps to obtain such Shareholder Approval
upon receipt of the Conversion Notice triggering the need for Shareholder
Approval ("Current Conversion Notice"). If the Corporation has not received from
the Holder a Current Conversion Notice, the Holder, subsequent to January 1st,
1999 may, if the Corporation's shares of Common Stock trade, subsequent to
January 1st, 1999, at a five (5) day average closing bid price below Two Dollars
and 34/00 ($2.34), upon written notice to the Corporation, require the
Corporation to obtain Shareholder Approval ("Holder's Notice"). The Holder and
the Corporation's officers and directors covenant to vote all shares of Common
Stock over which they have voting control in favor of Shareholder Approval. If
the Corporation does not obtain Shareholder Approval within ninety (90) days of
the earlier of the Corporation's receipt of (i) the Current Conversion Notice or
(ii) the Holder's Notice, and the Holder has not breached its covenant to vote
all shares of Common Stock over which they have voting control in favor of
Shareholder Approval, the Corporation shall pay in<U> </U>cash to the Holder
liquidated damages, in an amount of 4% per month of the Liquidation Value of
each share of Preferred Stock then outstanding, commencing on the 91st day of
the Corporation's receipt of the Holder's Current Conversion Notice, and
continuing every thirty (30) days pro-rata until such time the Corporation
receives Shareholder Approval.<U></U></P>
<P><STRONG></STRONG><STRONG>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Reissuance of Series 13 Class M Convertible
Preferred Stock.</STRONG></P>
<P>Shares of Preferred Stock which are converted into shares of Common Stock as
provided herein 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.</P>&nbsp;
<P>
<CENTER>-9-</CENTER>
<P></P>
<P><STRONG>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Closing of Books.</STRONG></P>
<P>The Corporation will at no time close its transfer books against the transfer
of any Preferred Stock or of any shares of Common Stock issued or issuable upon
the conversion of any shares of Common Stock of Preferred Stock in<STRONG>
</STRONG>any manner which interferes with the timely conversion of such
Preferred Stock, except as may otherwise be required to comply with applicable
securities laws.</P>
<P><STRONG></STRONG><STRONG>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Preemptive Rights.</STRONG></P>
<P>The 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.<STRONG></STRONG></P>
<P><STRONG>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definition of Shares.</STRONG></P>
<P>As used in this Certificate of Designations, the term "shares of Common
Stock" shall mean and include the Corporation's authorized common stock, par
value $.001, as constituted on the date of filing of these terms of the
Preferred Stock, or in case of any reorganization, reclassification, or stock
split of the outstanding shares of Common Stock thereof, the stock, securities
or assets provided for hereof. The term "Warrants" as used herein shall have the
same meaning as defined in Section 1 of the Private Securities Subscription
Agreement, dated June 30, 1998, between the Company and RBB Bank
Aktiengesellschaft.</P>
<P>The said determination of the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions thereof, relating to the Preferred Stock was duly made by the Board
of Directors pursuant to the provisions of the Corporation's Restated
Certificate of Incorporation and in accordance with the provisions of the
Delaware General Corporation Law.</P>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER>-10-</CENTER>
<p>&nbsp;</p>
<p align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 12:33 PM 07/15/1999&nbsp;&nbsp;<br>
991291292 - 2249849&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
<P>
<CENTER><b>CERTIFICATE OF ELIMINATION<br>
OF<br>
SERIES 3 CLASS C CONVERTIBLE PREFERRED STOCK<br>
AND<br>
SERIES 8 CLASS H CONVERTIBLE PREFERRED STOCK<br>
AND<br>
SERIES 10 CLASS J CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
____________________________________________</b></CENTER>
<p><BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies the following:
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of Series 3 Class C Convertible
Preferred Stock, par value $.001 per share, of the Corporation (the "Series 3
Preferred") was filed with the Delaware Secretary of State on July 19, 1996 (the
"Series 3 Certificate of Designations").</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 3 Preferred have been delivered
to the Company and exchanged pursuant to an agreement with the holder thereof in
accordance with the terms and conditions of a certain Exchange Agreement between
the Company and RBB Bank Aktiengesellschaft, dated as of July&nbsp;15, 1999.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 3 Preferred remain outstanding.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 3 Preferred which have been exchanged have
the status of authorized and unissued shares of the Preferred Stock of the
Corporation without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That effective July 15, 1999, the Board of Directors of the Company duly
adopted the following resolutions:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange with the holder of the Series
3&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class C Convertible Preferred Stock, no authorized shares of Series 3 Class C&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock will remain outstanding and no shares of Series 3&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class C Convertible Preferred Stock will be issued subject to the Certificate of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designations previously filed with respect to the Series 3 Class C Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the exchange, the officers of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company are hereby authorized and directed, for and on behalf of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company, to
execute and deliver an appropriate Certificate of Elimination to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Secretary
of State of Delaware regarding the Series 3 Class C Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
Stock.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of the Series 8 Class H Convertible
Preferred Stock, par value $.001 per share, of the Corporation (the "Series 8
Preferred") was filed on July 16, 1998 (the "Series 8 Certificate of
Designations").</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 8 Preferred have been delivered
to the Company and exchanged pursuant to an agreement with the holder thereof in
accordance with the terms and conditions of a certain Exchange Agreement between
the Company and RBB Bank, dated as of July 15, 1999.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 8 Preferred remain outstanding.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 8 Preferred which have been exchanged have
the status of authorized and unissued shares of the Preferred Stock of the
Corporation without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;That effective July 15, 1999, the Board of Directors of the Company duly
adopted the following resolutions:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange with the holder of the Series
8&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class H Convertible Preferred Stock, no authorized shares of Series 8 Class H&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock will remain outstanding and no shares of Series 8&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class H Convertible Preferred Stock will be issued subject to the Certificate of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designations previously filed with respect to the Series 8 Class H Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the exchange, the officers of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company are hereby authorized and directed, for and on behalf of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company, to
execute and deliver an appropriate Certificate of Elimination to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Secretary
of State of Delaware regarding the Series 8 Class H Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock.
</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of the Series 10 Class J Convertible
Preferred Stock, par value $.001 per share, of the Corporation (the "Series 10
Preferred") was filed on July 10, 1998 (the "Series 10 Certificate of
Designations").</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 10 Preferred have been
delivered to the Company and exchanged pursuant to an agreement with the holder
thereof in accordance to the terms and conditions of a certain Exchange
Agreement between the Company and RBB Bank, dated as of July 15, 1999.</P>&nbsp;
<P>
<CENTER>-2-</CENTER>
<P></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 10 Preferred remain outstanding.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 10 Preferred which have been exchanged have
the status of authorized and unissued shares of the Preferred Stock of the
Corporation without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;That effective July 15, 1999, the Board of Directors of the Company duly
adopted the following resolutions:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange with the holder of the Series
10&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class J Convertible Preferred Stock, no authorized shares of Series 10 Class
J&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock will remain outstanding and no shares of Series 10&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class J Convertible Preferred Stock will be issued subject to the Certificate of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designations previously filed with respect to the Series 10 Class J Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the exchange, the officers&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the
Company are hereby authorized and directed, for and on behalf of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company, to
execute and deliver an appropriate Certificate of Elimination to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Secretary
of State of Delaware regarding the Series 10 Class J Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred
Stock. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;That pursuant to the provisions of Section 151(g) of the Delaware General
Corporation Law, upon the effective date of the filing of this Certificate, this
Certificate will have the effect of eliminating from the Restated Certificate of
Incorporation only those matters set forth in the Restated Certificate of
Incorporation with respect to the Series 3 Class C Convertible Preferred Stock,
the Series 8 Class H Convertible Preferred Stock, and the Series 10 Class J
Convertible Preferred Stock</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, this Certificate of Elimination has been executed this
15<SUP>th</SUP> day of July, 1999, by the President of the Company.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL<br>
ATTEST:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SERVICES, INC.</P>
<BR WP="BR1"><BR WP="BR2">/s/ Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
__________________________
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_________________________________<br>
Richard T. Kelecy, Secretary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti, President
<P>(SEAL)</P>&nbsp;
<P>
<CENTER>-3-</CENTER>
<P>&nbsp;</P>
<P align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 12:33 PM 07/15/1999&nbsp;&nbsp;<br>
991331578 - 2249849&nbsp;&nbsp;&nbsp;</font></P>
<P>
<CENTER><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 14 CLASS N CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></CENTER>
<p><BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 14 Class N 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 14 Class N Convertible Preferred
Stock as set forth in the attached resolutions.</P>
<P>Dated: August 10, 1999&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SERVICES, INC. </P>
<BR WP="BR1"><BR WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;______________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board
<P>ATTEST:</P><BR WP="BR1"><BR WP="BR2">/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary
<p>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER><b>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</b></CENTER>
<P>
<CENTER><b>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 14 CLASS N CONVERTIBLE PREFERRED STOCK</b></CENTER>
<p><BR WP="BR2">
<b>WHEREAS,</b>
<P>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation's share capital includes Preferred Stock, par value $.001
per share&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;("Preferred Stock"), which Preferred Stock may be issued in one or
more series by the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board of Directors of the Corporation (the "Board") being
entitled by resolution to fix&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the number of shares in each series and to
designate the rights, designations, preferences,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and relative, participating,
optional or other special rights, privileges, restrictions and&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;conditions
attaching to the shares of each such series; and</P>
<P>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is in the best interests of the Corporation for the Board to create a
new series from the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock designated as the Series 14 Class N
Convertible Preferred Stock, par&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;value $.001.</P>
<P><STRONG>NOW, THEREFORE, BE IT RESOLVED, THAT:</STRONG></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Series 14 Class N Convertible Preferred Stock, par value $.001 (the
"Series 14&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class N Preferred Stock") of the Corporation shall consist of 1,769
shares and no more&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and shall be designated as the Series 14 Class N Convertible
Preferred Stock, and the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;preferences, rights, privileges, restrictions and
conditions attaching to the Series 14&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class N Preferred Stock shall be as
follows:</P>
<P><STRONG><U>Part 1 - Voting and Preemptive Rights</U></STRONG>.</P>
<P>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Voting Rights</STRONG></U>. Except as otherwise provided
herein, in the Corporation's Certificate of Incorporation (the "Articles") or
the General Corporation Law of the State of Delaware (the "GCL"), the holders of
the Series 14 Class N Preferred Stock shall have no voting rights whatsoever. To
the extent that under the GCL the vote of the holders of the Series 14 Class N
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 14
Class N 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 14 Class N
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
the GCL the holders of the&nbsp;</P>&nbsp;
<P>
<CENTER>-2-</CENTER>
<P></P>
<P>Series 14 Class N Preferred Stock are entitled to vote on a matter with holders of
Corporation's Common Stock and/or any other class or series of the Corporation's
voting securities, the Series 14 Class N Preferred Stock, the Corporation's
Common Stock and all other classes or series of the Corporation's voting
securities shall vote together as one class, with each share of Series 14 Class
N Preferred Stock entitled to a number of votes equal to the number of shares of
the Corporation's Common Stock into which it is then convertible using the
record date for the taking of such vote of stockholders as the date as of which
the Conversion Price (as defined in Section 4.3 hereof) is calculated and
conversion is effected. Holders of the Series 14 Class N 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.</P>
<P>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Preemptive Rights</STRONG></U>. The Series 14 Class N
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.</P>
<P><STRONG><U>Part 2 - Liquidation Rights</U></STRONG>.</P>
<P>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Liquidation</STRONG></U>.&nbsp;&nbsp;If the Corporation shall be
voluntarily or involuntarily liquidated, dissolved or wound up at any time when
any shares of the Series 14 Class N Preferred Stock shall be outstanding, the
holders of the then outstanding Series 14 Class N Preferred Stock shall have a
preference in distribution of the Corporation's property available for
distribution to the holders of the Corporation's Common Stock equal to $1,000
consideration per outstanding share of Series 14 Class N Preferred Stock, 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.</P>
<P>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment of Liquidation Preferences</STRONG></U>. Subject to
the provisions of Part 6 hereof, all amounts to be paid as Liquidation
Preference to the holders of Series 14 Class N 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.</P>
<P>2.3&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Rights After Payment</STRONG></U>. After the payment to the
holders of the shares of the Series 14 Class N Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the holders of the
Series 14 Class N Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.</P>
<P>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Assets Insufficient to Pay Full Liquidation
Preference</STRONG></U>. In the event that the assets of the Corporation
available for distribution to the holders of shares of the Series 14 Class N
Preferred Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be&nbsp;</P>
<P>
<CENTER>-3-</CENTER>
<P></P>
<P>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 14 Class N
Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series 14 Class N Preferred Stock and shares of such other class or series
ranking on a parity with the shares of this Series 14 Class N 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.</P>
<P><STRONG><U>Part 3 - Dividends</U></STRONG>.</P>
<P>3.1&nbsp;&nbsp;&nbsp;The holders of the Series 14 Class N Preferred Stock are entitled to
receive if, when and as declared by the Board out of funds legally available
therefor, cumulative dividends, payable in cash or Common Stock of the
Corporation, par value $.001 per share (the "Common Stock"), at the
Corporation's election, at the rate of six percent (6%) per annum of the
Liquidation Value of the Series 14 Class N Preferred Stock. The Liquidation
Value of the Series 14 Class N Preferred Stock shall be $1,000.00 per share (the
"Dividend Rate"). 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, 1999 (each, a "Dividend Declaration Date"). Dividends shall be paid
only with respect to shares of Series 14 Class N Preferred Stock actually issued
and outstanding on a Dividend Declaration Date and to holders of record 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 August 3, 1999. In the
event that the Corporation elects to pay dividends in Common Stock of the
Corporation, each holder of the Series 14 Class N Preferred Stock shall receive
shares of Common Stock of the Corporation equal to the quotient of (i) the
Dividend Rate in effect on the applicable Dividend Declaration Date dividend by
(ii) the average of the 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 prior to the
Dividend Declaration Date (the "Stock Dividend Price"). Dividends on the Series
14 Class N Preferred Stock shall be cumulative, and no dividends or other
distributions shall be paid or declared or set aside for payment on the Common
Stock until all accrued and unpaid dividends on all outstanding shares of Series
14 Class N Preferred Stock shall have been paid or declared and set aside for
payment.</P>
<P><STRONG><U>Part 4 - Conversion</U></STRONG>. The holders of the Series 14
Class N Preferred Stock shall have rights to convert the shares of Series 14
Class N Preferred Stock into shares of the Corporation's Common Stock, par value
$.001 per share ("Common Stock"), as follows (the "Conversion Rights"):</P>
<P>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No Right to Convert</U>. The Series 14 Class N Preferred shall not be
convertible into shares of Common Stock until after April 20, 2000.</P>
<P>&nbsp;</P>
<P>
<CENTER>-4-</CENTER>
<P></P>
<P>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Right to Convert</STRONG></U>. The Series 14 Class N Preferred
Stock may be convertible into shares of Common Stock at any time on or after
April&nbsp;20, 2000.</P>
<P>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Conversion Price</STRONG></U>. As used herein, the term
Conversion Price shall be the product 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 4.4 below multiplied by (ii) seventy-five percent (75%), subject to the
provisions of this Section 4.3. Notwithstanding the foregoing, the Conversion
Price shall not be (i) less than a minimum of $1.50 per share for a period of
twenty-four (24) months from April 20, 1999, or, after twenty-four (24) months
from April 20, 1999, a minimum of $.50 per share (as applicable, the "Minimum
Conversion Price") or (ii) more than a maximum of $1.50 per share ( "Maximum
Conversion Price"). If, after July 1, 1996, the Corporation sustains a net loss,
on a consolidated basis, in each of two (2) consecutive quarters, as determined
under generally accepted accounting principles, the Minimum Conversion Price
shall be reduced $.25 a share, but there shall be no change to, or reduction of,
the Maximum Conversion Price. For the purpose of determining whether the
Corporation has had a net loss in each of two (2) consecutive quarters, at no
time shall a quarter that has already been considered in such determination be
considered in any subsequent determination (as an example the third quarter of
1996 in which there is a net profit and the fourth quarter of 1996 in which
there is a net loss shall be considered as two consecutive quarters, and, as a
result, the fourth quarter of 1996 shall not be considered along with the first
quarter of 1997 as two (2) consecutive quarters, but the first quarter of 1997
must be considered with the second quarter of 1997 for the purposes of such
determination). For the purposes of this Section 4.3, a "quarter" is a three (3)
month period ending on March 31, June 30, September 30, and December 31. If any
of the outstanding shares of Series 14 Class N 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 14 Class N 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 14 Class N 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 product of dividing the amount of such unpaid and accrued dividends to the
date of conversion on the shares of Series 14 Class N Preferred Stock so
converted by the Conversion Price in effect at the date of conversion.</P>
<P>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Conversion</STRONG></U>. Any holder of the Series
14 Class N Preferred Stock who wishes to exercise its Conversion Rights pursuant
to the terms of this Part 4 must, if such shares are not being held in escrow by
the Corporation's attorneys, surrender the certificate therefor at the principal
executive office of the Corporation, and give written notice, which may be via
facsimile transmission, to the Corporation at such office that it elects to
convert the same (the "Conversion Notice"). In the event that the shares of
Series 14&nbsp;</P>
<P>&nbsp;</P>
<P>
<CENTER>-5-</CENTER>
<P></P>
<P>Class N Preferred Stock are being held in escrow by the Corporation's attorneys, no
delivery of the certificates shall be required. No Conversion Notice with
respect to any shares of Series 14 Class N Preferred Stock can be given prior to
the time such shares of Series 14 Class N Preferred Stock are eligible for
conversion in accordance with the provision of Section 4.1 above. Any such
premature Conversion Notice shall automatically be null and void. The
Corporation shall, within five (5) business days after receipt of an appropriate
and timely Conversion Notice (and certificate, if necessary), issue to such
holder of Series 14 Class N 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 14 Class N 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 14 Class
N Preferred Stock to be converted have been surrendered and the Conversion
Notice is received by the Corporation (or in the event that no surrender of the
Certificate is required, then only upon the receipt by the Corporation of the
Conversion Notice) (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. If the Corporation
fails to deliver to the holder or its agent the certificate representing the
shares of Common Stock that the holder is entitled to receive as a result of
such conversion within five (5) business days after receipt by the Corporation
from the holder of an appropriate and timely Conversion Notice and certificates
pursuant to the terms of this Section 4.4, the Corporation shall pay to the
holder U.S. $1,000 for each day that the Corporation is late in delivering such
certificate to the holder or its agent.</P>
<P>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments to Conversion Price for Stock Dividends and for
Combinations or Subdivisions of Common Stock</STRONG></U>. If the Corporation at
any time or from time to time while shares of Series 14 Class N 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. If the Corporation shall declare or pay, without
consideration, any dividend on the Common Stock payable in any right to acquire
Common stock for no consideration, then the Corporation shall be deemed to have
made a dividend payable in Common Stock in an amount of shares equal to the
maximum number of shares issuable upon exercise of such rights to acquire Common
Stock.</P>
<P>&nbsp;</P>
<P>
<CENTER>-6-</CENTER>
<P></P>
<P>4.6.&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments for Reclassification and
Reorganization</STRONG></U>. If the Common Stock issuable upon conversion of the
Series 14 Class N 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 4.5 hereof), the Conversion Price
then in effect shall, concurrently with the effectiveness of such reorganization
or reclassification, be proportionately adjusted so that the Series 14 Class N
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 14 Class N 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
14 Class N Preferred Stock immediately before that change.</P>
<P>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Common Stock Duly Issued</STRONG></U>. All Common Stock which
may be issued upon conversion of Series 14 Class N 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.</P>
<P>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notice of Adjustments</STRONG></U>. 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 14 Class N Preferred Stock a notice
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment is based.</P>
<P>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Issue Taxes</STRONG></U>. 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 14 Class N
Preferred Stock pursuant thereto; <U>provided, however</U>, that the Corporation
shall not be obligated to pay any transfer taxes resulting from any transfer
requested by any holder of Series 14 Class N Preferred Stock in connection with
such conversion.</P>
<P>4.10&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Reservation of Stock Issuable Upon Conversion</STRONG></U>.
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 14 Class N 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 14
Class N 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 14 Class N 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.</P>
<P>4.11&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Fractional Shares</STRONG></U>. No fractional share shall be
issued upon the conversion of any share or shares of Series 14 Class N Preferred
Stock. </P>
<P>&nbsp; </P>
<P>
<CENTER>-7-</CENTER>
<P></P>
<P>All shares of Common Stock (including fractions thereof) issuable upon
conversion of more than one share of Series 14 Class N 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.</P>
<P>4.12&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notices</STRONG></U>. Any notices required by the provisions
of this Part 4 to be given to the holders of shares of Series 14 Class N
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.</P>
<P>4.13&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Business Day</STRONG></U>. 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 permitted to
close.</P>
<P><STRONG><U>Part 5 - Redemption</U></STRONG>.</P>
<P>5.1<STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Redemption at Corporation's Option</U></STRONG>. Except as
otherwise provided in this Section 5.1, at any time, and from time to time, 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 14 Class N Preferred Stock at the following cash redemption prices if
redeemed during the following periods: (i)<STRONG> </STRONG>within twelve (12)
months from<STRONG> </STRONG>April 20, 1999 - $1,100 per share, and (ii) after
twelve (12) months from<STRONG> </STRONG>April 20, 1999 - $1,200 per share (as
applicable, the redemption price of $1,100 or $1,200 is referred to herein as
the "Redemption Price").</P>
<P>5.2&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Redemption</STRONG></U>. Prior to any date
stipulated by the Corporation for the redemption of Series 14 Class N 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 14 Class N
Preferred Stock. The Redemption Notice shall state: (i) the Redemption Date of
such shares, (ii) the number of Series 14 Class N 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 14
Class N Preferred Stock to be redeemed from such holder, and (iv) instructions
as to how to specify to the Corporation the number of Series 14 Class N
Preferred Stock to be redeemed as provided in this Part 5 and, if the Redemption
Notice is mailed to the Holder after the first twelve (12) months from April 20,
1999, the number of shares to be converted into Common Stock as provided in Part
4 hereof.</P>
<P>5.3&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Redemption</STRONG></U>. Prior to any date
stipulated by the Corporation for the redemption of Series 14 Class N 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 14 Class N
Preferred Stock. The Redemption Notice shall state: (i) the Redemption Date of
such shares, (ii) the number of Series 14 Class N</P>
<P>&nbsp;</P>
<P>
<CENTER>-8-</CENTER>
<P></P>
<P>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 14 Class N Preferred Stock to be redeemed from
such holder, and (iv) instructions as to how to specify to the Corporation the
number of Series 14 Class N Preferred Stock to be redeemed as provided in this
Part 5 and, if the Redemption Notice is mailed to the Holder after the first 12
months from April 20, 1999, the number of shares to be converted into Common
Stock as provided in Part 4 hereof.</P>
<P>5.4&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rights of Conversion Upon Redemption</STRONG></U>. If the
redemption occurs during the first 12 months after April 20, 1999, the holder
may not convert any redeemed shares. If the redemption occurs pursuant to
Section 5.1 (i) hereof, the Holder of the Series 14 Class N Preferred Stock
shall not have the right to convert those outstanding shares of Series 14 Class
N Preferred Stock that the Company is redeeming after receipt of the Redemption
Notice. If the redemption occurs pursuant to Section 5.1 (ii) hereof, then, upon
receipt of the Redemption Notice, any holder of Series 14 Class N Preferred
Stock shall have the next five business days during which it may exercise the
option, at its sole election, to specify what portion of its Series 14 Class N
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, except that, notwithstanding any provision of such Part 4 to
the contrary, after twelve (12) months from April, 20, 1999, such holder shall
have the right to convert into Common Stock that number of Series 14 Class N
Preferred Stock called for redemption in the Redemption Notice.</P>
<P>5.5&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Surrender of Certificates</STRONG></U>. On or before the
Redemption Date in respect of any Series 14 Class N 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, and each surrendered share
certificate shall be canceled and retired. 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 14 Class N 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.</P>
<P>5.6&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment</STRONG></U>. On the Redemption Date in respect of any
Series 14 Class N 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 First Year
Redemption Price or the Redemption Price, whichever is applicable, of all such
shares called from redemption (less the aggregate Redemption Price for those
Series 14 Class N Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to convert Series 14
Class N 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</P>&nbsp;
<P>
<CENTER>-9-</CENTER>
<P></P>
<P>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 First Year Redemption Price or the Redemption Price, whichever
is applicable, 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 First Year Redemption Price or the
Redemption Price, whichever is applicable, in respect of their shares only from
the Corporation.</P>
<P><STRONG><U>Part 6 - Parity with Other Shares of Series 14 Class N Preferred
Stock and Priority</U></STRONG>.</P>
<P>6.1&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rateable Participation</STRONG></U>. If any cumulative
dividends or return of capital in respect of Series 14 Class N 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.</P>
<P>6.2&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Ranking</STRONG></U>. For purposes of this resolution, any
stock of any class or series of the Corporation shall be deemed to rank:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior or senior to the shares of this Series 14 Class N Preferred Stock
either as to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or upon liquidation, if the holders of such class or
classes shall be entitled&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the receipt of dividends or of amounts
distributable upon dissolution, liquidation&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or winding up of the Corporation,
whether voluntary or involuntary, as the case&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;may be, in preference or priority
to the holders of shares of this Series 14 Class N&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a parity with, or equal to, shares of this Series 14 Class N
Preferred Stock,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;either as to dividends or upon liquidation, whether or not the
dividend rates, dividend<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
payment dates, or redemption or liquidation prices per
share or sinking fund&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provisions, if any, are different from those of this
Series 14 Class N Preferred&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock, if the holders of such stock are entitled to
the receipt of dividends or of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;amounts distributable upon dissolution,
liquidation or winding up of the Corporation,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether voluntary or involuntary,
in proportion to their respective dividend rates&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or liquidation prices, without
preference or priority, one over the other, as&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;between the holders of such stock
and over the other, as between the holders&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of such stock and the holders of
shares of this Series 14 Class N Preferred&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock; and,</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junior to shares of this Series 14 Class N Preferred Stock, either as
to dividends&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or upon liquidation, if such class or series shall be Common Stock
or if the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;holders of shares of this Series 14 Class N Preferred Stock shall be
entitled to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;receipt of dividends or of amounts distributable upon dissolution,
liquidation&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or winding up of the Corporation, whether voluntary or
involuntary, as the<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;case
may be, in preference or priority to the holders of shares of such class<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
series.</P>&nbsp;
<P>
<CENTER>-10-</CENTER>
<P></P>
<P><STRONG><U>Part 7 - Amendment and Reissue</U></STRONG>.</P>
<P>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Amendment</STRONG></U>. If any proposed amendment to the
Corporation's Certificate of Incorporation would alter or change the powers,
preferences or special rights of the Series 14 Class N Preferred Stock so as to
affect such adversely, then the Corporation must obtain the affirmative vote of
such amendment to the Certificate of Incorporation at a duly called and held
series meeting of the holders of the Series 14 Class N Preferred Stock or
written consent by the holders of a majority of the Series 14 Class N Preferred
Stock then outstanding. Notwithstanding the above, the number of authorized
shares of any class or classes of stock may be increased or decreased (but not
below the number of shares thereof outstanding) by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to vote thereon,
voting together as a single class, irrespective of this Section 7.1 or the
requirements of Section 242 of the GCL.</P>
<P>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Authorized</STRONG></U>. Any shares of Series 14 Class N
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.</P>&nbsp;
<P>
<CENTER>-11-</CENTER>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>
<CENTER><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 15 CLASS O CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></CENTER>
<p><BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 15 Class O 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 15 Class O Convertible Preferred
Stock as set forth in the attached resolutions.</P>
<P>Dated: August 10, 1999</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC.</P><BR WP="BR1"><BR WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;____________________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board
<P>ATTEST:</P><BR WP="BR1">/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary
<p align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 12:31 PM 08/10/1999&nbsp;&nbsp;<br>
991331579 - 2249849&nbsp;&nbsp;&nbsp;</font>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER><b>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</b></CENTER>
<P>
<CENTER><b>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 15 CLASS O CONVERTIBLE PREFERRED STOCK</b></CENTER>
<p><BR WP="BR2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>WHEREAS</STRONG>, 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, restrictions and
conditions attaching to the shares of each such series;
<P><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS</STRONG>, 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 15 Class O Convertible Preferred Stock, par value $.001 per share (the
"Series 15 Class O Preferred Stock");</P>
<P><STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, BE IT RESOLVED,</STRONG> that the Series 15 Class O
Preferred Stock shall consist of six hundred sixteen (616) shares and no more
and shall be designated as the Series 15 Class O Convertible Preferred Stock,
and the preferences, rights, privileges, restrictions and conditions attaching
to the Series 15 Class O Preferred Stock shall be as follows:</P>
<P><STRONG><U>Part 1 - Voting and Preemptive Rights</U></STRONG>.</P>
<P>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Voting Rights</STRONG></U>. Except as otherwise provided in
Part 7 hereof or under Section 242(b)(2) of the General Corporation Law of the
State of Delaware (the "GCL"), the holders of the Series 15 Class O Preferred
Stock shall have no voting rights whatsoever. To the extent that under Section
242(b)(2) of the GCL or Part 7 hereof, the holders of the Series 15 Class O
Preferred Stock are entitled to vote on a matter, each share of the Series 15
Class O Preferred Stock shall be entitled one (1) vote for each outstanding
share of Series 15 Class O Preferred Stock. Holders of the Series 15 Class O
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.</P>
<P>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Preemptive Rights</STRONG></U>. The Series 15 Class O
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.</P>&nbsp;
<P>
<CENTER>-1-</CENTER>
<P></P>
<P><STRONG><U>Part 2 - Liquidation Rights</U></STRONG>.</P>
<P>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Liquidation</STRONG></U>. If the Corporation shall be
voluntarily or involuntarily liquidated, dissolved or wound up at any time when
any shares of the Series 15 Class O Preferred Stock shall be outstanding, the
holders of the then outstanding Series 15 Class O Preferred Stock shall have a
preference in distribution of the Corporation's property available for
distribution to the holders of the Corporation's Common Stock equal to $1,000
consideration per outstanding share of Series 15 Class O Preferred Stock, 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.</P>
<P>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment of Liquidation Preferences</STRONG></U>. Subject to
the provisions of Part 6 hereof, all amounts to be paid as Liquidation
Preference to the holders of Series 15 Class O 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.</P>
<P>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Rights After Payment</STRONG></U>. After the payment to the
holders of the shares of the Series 15 Class O Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the holders of the
Series 15 Class O Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.</P>
<P>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Assets Insufficient to Pay Full Liquidation
Preference</STRONG></U>. In the event that the assets of the Corporation
available for distribution to the holders of shares of the Series 15 Class O
Preferred Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be 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 15
Class O Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
this Series 15 Class O Preferred Stock and shares of such other class or series
ranking on a parity with the shares of this Series 15 Class O 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.</P>
<P><STRONG><U>Part 3 - Dividends</U></STRONG>. The holders of the Series 15
Class O Preferred Stock are entitled to receive if, when and as declared by the
Board out of funds legally available therefor, cumulative 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</P>
<P>&nbsp;</P>
<P>
<CENTER>-2-</CENTER>
<P></P>
<P>Value (as defined below) of each issued and
outstanding share of Series 15 Class O Preferred Stock (the "Dividend Rate").
The Liquidation Value of the Series 15 Class O Preferred Stock shall be $1,000
per outstanding share of the Series 15 Class O 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, 1999
(each, a "Dividend Declaration Date"). Dividends shall be paid only with respect
to shares of Series 15 Class O Preferred Stock actually issued and outstanding
on a Dividend Declaration Date and to holders of record of the Series 15 Class O
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
August 3, 1999. 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 15 Class O 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 15 Class O 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 15 Class O Preferred Stock
shall have been paid or declared and set aside for payment.</P>
<P><STRONG><U>Part 4 - Conversion</U></STRONG>. The holders of the Series 15
Class O Preferred Stock shall have rights to convert the shares of Series 15
Class O Preferred Stock into shares of the Corporation's Common Stock, par value
$.001 per share ("Common Stock"), as follows (the "Conversion Rights"):</P>
<P>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>No Right to Convert</STRONG></U><U></U>. The Series 15 Class O
Preferred shall not be convertible into shares of Common Stock until after April
20, 2000.</P>
<P><U></U>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Right to Convert</STRONG></U><U></U>. The Series 15
Class O Preferred Stock may be convertible into shares of Common Stock at any
time after April 20, 2000.</P>
<P>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Conversion Price</STRONG></U>. Subject to the terms hereof, as
used herein, the Conversion Price per outstanding share of Series 15 Class O
Preferred Stock shall be $1.8125, except that, in the event the average closing
bid price per share of the Common Stock as reported on the over-the-counter
market, or</P>&nbsp;
<P>
<CENTER>-3-</CENTER>
<P></P>
<P>the closing sale price if listed on a national securities exchange, for the
five (5) trading days prior to the particular date of conversion shall be less
than $2.265, the Conversion Price for only such particular conversion shall be
the product of 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 4.4 below in
connection with such conversion multiplied by eighty percent (80%), subject to
the provisions of this Section 4.2. Notwithstanding the foregoing, the
Conversion Price shall not be less than a minimum of $1.50 per share ("Minimum
Conversion Price") for a period of twenty-four (24) months from April 20, 1999.
If any of the outstanding shares of Series 15 Class O 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 15 Class O Preferred Stock so surrendered for
conversion by (b) the Conversion Price as of such conversion. At the time of
conversion of shares of the Series 15 Class O 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 whole shares of 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 15 Class O Preferred Stock so converted
divided by the Stock Dividend Price, as defined in Part 3 hereof, in effect at
the date of conversion.</P>
<P>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Conversion</STRONG></U>. Any holder of the Series
15 Class O Preferred Stock who wishes to exercise its Conversion Rights pursuant
to the terms of this Part 4 must, if such shares are not being held in escrow by
the Corporation's attorneys, surrender the certificate therefor at the principal
executive office of the Corporation, and give written notice, which may be via
facsimile transmission, to the Corporation at such office that it elects to
convert the same (the "Conversion Notice"). In the event that the shares of
Series 15 Class O Preferred Stock are being held in escrow by the Corporation's
attorneys, no delivery of the certificates shall be required. The Corporation
shall, within five (5) business days after receipt of an appropriate and timely
Conversion Notice (and certificate, if necessary), issue to such holder of
Series 15 Class O 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
15 Class O 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 15 Class O Preferred
Stock to be converted have been</P>&nbsp;
<P>
<CENTER>-4-</CENTER>
<P></P><BR WP="BR1"><BR WP="BR2">
<P>surrendered and
the Conversion Notice is received by the Corporation (or in the event that no
surrender of the Certificate is required, then only upon the receipt by the
Corporation of the Conversion Notice) (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. If
the Corporation fails to deliver to the holder or its agent the certificate
representing the shares of Common Stock that the holder is entitled to receive
as a result of such conversion of the Series 15 Class O Preferred Stock within
seven (7) business days after receipt by the Corporation from the holder of an
appropriate and timely Conversion Notice and certificates pursuant to the terms
of this Section 4.4 ("Seven (7) Business Day Period"), then, upon the written
demand of RBB Bank Aktiengesellschaft ("RBB Bank"), the holder of the Series 15
Class O Preferred Stock, for payment of the penalty described below in this
Section 4.4, which demand must be received by the Corporation no later than ten
(10) calendar days after the expiration of such Seven (7) Business Day Period,
the Corporation shall pay to RBB Bank the following penalty for each business
day after the Seven (7) Business Day Period until the Corporation delivers to
the holder or its agent the certificate representing the shares of Common Stock
that the holder is entitled to receive as a result of such conversion: business
day eight (8) - U.S. $1,000; business day nine (9) - U.S. $2,000, and each
business day thereafter an amount equal to the penalty due on the immediately
preceding business day times two (2) until the Corporation delivers to the
holder or its agent the certificate representing the shares of Common Stock that
the holder is entitled to receive as a result of such conversion. </P>
<P>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Merger or Consolidation</STRONG></U>. 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 15 Class O Preferred Stock are outstanding and prior to the date that the
Corporation's Registration Statement covering up to 1,379,311 shares of Common
Stock issuable upon the conversion of the Series 15 Class O 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 4.3, 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 15 Class O
Preferred Stock then outstanding shall have the right to convert such share of
Series 15 Class O 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</P>&nbsp;
<P>
<CENTER>-5-</CENTER>
<P></P>
<P>of shares of Common Stock into which such shares of Series 15 Class O
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.</P>
<P>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments to Conversion Price for Stock Dividends and for
Combinations or Subdivisions of Common Stock</STRONG></U>. If the Corporation at
any time or from time to time while shares of Series 15 Class O 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.</P>
<P>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Adjustments for Reclassification and
Reorganization</STRONG></U>. If the Common Stock issuable upon conversion of the
Series 15 Class O 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 4.6 hereof), the Conversion Price
shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series 15 Class O
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders of Series 15 Class O 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
15 Class O Preferred Stock immediately before that change.</P>
<P>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Common Stock Duly Issued</STRONG></U>. All Common Stock which
may be issued upon conversion of Series 15 Class O 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.</P>
<P>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notice of Adjustments</STRONG></U>. 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 15 Class O Preferred</P>&nbsp;
<P>
<CENTER>-6-</CENTER>
<P></P>
<P>Stock a notice setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment is based.</P>
<P>4.10&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Issue Taxes</STRONG></U>. 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 15 Class O
Preferred Stock pursuant thereto; <U>provided, however</U>, that the Corporation
shall not be obligated to pay any transfer taxes resulting from any transfer
requested by any holder of Series 15 Class O Preferred Stock in connection with
such conversion.</P>
<P>4.11&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Reservation of Stock Issuable Upon Conversion</STRONG></U>.
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 15 Class O 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 15
Class O 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 15 Class O 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.</P>
<P>4.12&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Fractional Shares</STRONG></U>. No fractional shares shall be
issued upon the conversion of any share or shares of Series 15 Class O Preferred
Stock. All shares of Common Stock (including fractions thereof) issuable upon
conversion of more than one share of Series 15 Class O 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.</P>
<P>4.13&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Notices</STRONG></U>. Any notices required by the provisions
of this Part 4 to be given to the holders of shares of Series 15 Class O
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.</P>
<P>4.14&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Business Day</STRONG></U>. 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.</P>&nbsp;
<P>
<CENTER>-7-</CENTER>
<P></P>
<P><STRONG><U>Part 5 - Redemption</U></STRONG>.</P>
<P>5.1&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Redemption at Corporation's Option</STRONG></U>. Except as
otherwise provided in this Section 5.1, at any time, and from time to time, 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 15 Class O Preferred Stock at the following cash redemption prices if
redeemed during the following periods: (i)<STRONG> </STRONG>within twelve (12)
months from<STRONG> </STRONG>April 20, 1999 - $1,100 per share and (ii) after
twelve (12) months from<STRONG> </STRONG>April 20, 1999 - $1,200 per share (as
applicable, the redemption price of $1,100 or $1,200 is referred to herein as
the "Redemption Price").</P>
<P>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Mechanics of Redemption</STRONG></U>. Prior to any date
stipulated by the Corporation for the redemption of Series 15 Class O 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 15 Class O
Preferred Stock. The Redemption Notice shall state: (i) the Redemption Date of
such shares, (ii) the number of Series 15 Class O 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 15
Class O Preferred Stock to be redeemed from such holder, and (iv) instructions
as to how to specify to the Corporation the number of Series 15 Class O
Preferred Stock to be redeemed as provided in this Part 5 and, if the Redemption
Notice is mailed to the Holder after the first twelve (12) months from April 20,
1999, the number of shares to be converted into Common Stock as provided in Part
4 hereof.</P>
<P>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rights of Conversion Upon Redemption</STRONG></U>. If the
redemption occurs during the first twelve (12) months after April 20, 1999, the
holder may not convert any redeemed shares. If the redemption occurs after the
first twelve (12) months after April 20, 1999, then, upon receipt of the
Redemption Notice, any holder of Series 15 Class O Preferred Stock shall have
five business days during which it may exercise the option, at its sole
election, to specify what portion of its Series 15 Class O 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, except that, notwithstanding any provision of such Part 4 to the
contrary, after twelve (12) months from April 20, 1999, such holder shall have
the right to convert into Common Stock that number of Series 15 Class O
Preferred Stock called for redemption in the Redemption Notice.</P>
<P>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Surrender of Certificates</STRONG></U>. On or before the
Redemption Date in respect of any Series 15 Class O 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</P>&nbsp;
<P>
<CENTER>-8-</CENTER>
<P></P>
<P>Redemption Notice, and upon the Redemption Date, the Redemption Price for
such shares shall be made payable, in the manner provided in Section 5.5 hereof,
to the order of the person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered share certificate shall
be canceled and retired. 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 15 Class O 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.</P>
<P>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Payment</STRONG></U>. On the Redemption Date in respect of any
Series 15 Class O Preferred Stock or prior thereto, the Corporation shall
deposit with any bank or trust company having a capital and surplus of at least
$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 15 Class O Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to convert Series 15
Class O 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.</P>
<P><STRONG><U>Part 6 - Parity with Other Shares of Series 15 Class O Preferred
Stock and Priority</U></STRONG>.</P>
<P>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Rateable Participation</STRONG></U>. If any cumulative
dividends or return of capital in respect of Series 15 Class O 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.</P>
<P>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Ranking</STRONG></U>. For purposes of this resolution, any
stock of any class or series of the Corporation shall be deemed to rank:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior or senior to the shares of this Series 15 Class O Preferred Stock
either as&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to dividends or upon liquidation, if the holders
of such class or classes shall be</P>
<P>&nbsp;</P>
<P>
<CENTER>-9-</CENTER>
<P></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;entitled to the receipt of dividends or of
amounts distributable upon dissolution,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;liquidation or winding up of the
Corporation, whether voluntary or involuntary,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as the case may be, in preference
or priority to the holders of shares of this&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series 15 Class O Preferred
Stock;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On a parity with, or equal to, shares of this Series 15 Class O
Preferred Stock,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;either as to dividends or upon liquidation, whether or not the
dividend rates,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividend payment dates, or redemption or liquidation prices per
share or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sinking fund provisions, if any, are different from those of this
Series 15 Class&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;O Preferred Stock, if the holders of such stock are entitled to
the receipt of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or of amounts distributable upon dissolution,
liquidation or winding&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;up of the Corporation, whether voluntary or involuntary,
in proportion to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;their respective dividend rates or liquidation prices, without
preference or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;priority, one over the other, as between the holders of such stock
and over&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the other, as between the holders of such stock and the holders of
shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of this Series 15 Class O Preferred Stock; and,</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junior to shares of this Series 15 Class O Preferred Stock, either as
to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dividends or upon liquidation, if such class or series shall be Common Stock&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or if the holders of shares of this Series 15 Class O Preferred Stock shall&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;be
entitled to receipt of dividends or of amounts distributable upon&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dissolution,
liquidation or winding up of the Corporation, whether voluntary&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or involuntary,
as the case may be, in preference or priority to the holders&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of shares of such
class or series.</P>
<P><STRONG><U>Part 7 - Amendment and Reissue</U></STRONG>.</P>
<P>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Amendment</STRONG></U>. If any proposed amendment to the
Corporation's Certificate of Incorporation (the "Articles") would alter or
change the powers, preferences or special rights of the Series 15 Class O
Preferred Stock so as to affect such adversely, then the Corporation must obtain
the affirmative vote of such amendment to the Articles at a duly called and held
series meeting of the holders of the Series 15 Class O Preferred Stock or
written consent by the holders of a majority of the Series 15 Class O Preferred
Stock then outstanding. Notwithstanding the above or the provisions of Section
242(b)(2) of the GCL, the number of authorized shares of any class or classes of
stock of the Corporation may be increased or decreased (but not below the number
of shares thereof outstanding) by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon, voting
together as a single class, irrespective of the provisions of this Section 7.1
or Section 242(b)(2) of the GCL.</P>&nbsp;
<P>
<CENTER>-10-</CENTER>
<P></P>
<P>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><STRONG>Authorized</STRONG></U>. Any shares of Series 15 Class O
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.</P>
<P></P>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER>-11-</CENTER>
<P>&nbsp;</P>
<P>
<CENTER><b>CERTIFICATE OF DESIGNATIONS<br>
OF SERIES 16 CLASS P CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.</b></CENTER>
<p><BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 16 Class P 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 16 Class P Convertible Preferred
Stock as set forth in the attached resolutions.</P>
<P>Dated: August 10, 1999</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC.</P><BR WP="BR1"><BR WP="BR2"><BR
WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By /s/ Louis Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;____________________________________<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board
<P>ATTEST:</P><BR WP="BR1"><BR WP="BR2">/s/ Richard T. Kelecy<br>
______________________________<br>
Richard T. Kelecy, Secretary
<p align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 12:32 PM 08/10/1999&nbsp;&nbsp;<br>
991331580 - 2249849&nbsp;&nbsp;&nbsp;</font></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER><b>PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
(the "Corporation")</b></CENTER>
<P>
<CENTER><b>RESOLUTION OF THE BOARD OF DIRECTORS<br>
FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,<br>
RESTRICTIONS AND CONDITIONS ATTACHING TO THE<br>
SERIES 16 CLASS P CONVERTIBLE PREFERRED STOCK</b></CENTER>
<p><BR WP="BR1"><STRONG>RE: DESIGNATION OF SERIES 16 CLASS P PREFERRED STOCK</STRONG>.
<P><STRONG>RESOLVED:</STRONG> That the designations, powers, preferences and
rights of the Series 16 Class P Convertible Preferred Stock be, and they hereby
are, as set forth below:</P>
<P><STRONG></STRONG><STRONG>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Number of Shares of Common Stock of Series 16
Class P Convertible Preferred Stock </STRONG></P>
<P>The Corporation hereby authorizes the issuance of up to one thousand eight
hundred two (1,802) shares of Series 16 Class P Convertible Preferred Stock par
value $.001 per share (the "Preferred Stock"). This Preferred Stock shall pay an
annual dividend based on a 365 day calendar year of 4% of the Liquidation Value
(as defined in Section 3 hereof) ("Dividend Rate"), payable semiannually within
ten (10) business days after each subsequent June 30th and December 31st (each a
"Dividend Declaration Date"), and shall be payable in cash or shares of the
Corporation's par value $.001 per share common stock (Common Stock) at the
Corporation's option. The first Dividend Declaration Date shall be December
31st, 1999.</P>
<P>In the event that the Corporation elects to pay the accrued dividends due as
of a Dividend Declaration Date on the outstanding shares of Preferred Stock in
Common Stock of the Corporation, the Holder of each share of Preferred Stock
shall receive that 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 Corporation's Common Stock as reported on the
National Association of Securities Dealers Automated Quotation system
("NASDAQ"), or if the Common Stock is not listed for trading on the NASDAQ but
is listed for trading on a national securities exchange, the average closing bid
price of the Common Stock as quoted on such national 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 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 Preferred Stock shall have been
paid or declared and set aside for payment.</P>&nbsp;
<P>
<CENTER>-1-</CENTER>
<P></P>
<P><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voting.</b></P>
<P>Except as provided under Section 242 of the GCL, holders of Preferred Stock
(the "Holders") shall not have the right to vote on any matter. Notwithstanding
the provisions of Section 242 of the GCL or Section 4 hereof, the number of
authorized shares of any class or classes of stock of the Corporation may be
increased or decreased (but not below the number of shares thereof outstanding)
by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon, voting together as a single class,
irrespective of the provisions of Section 242 of the GCL.</P>
<P><STRONG>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liquidation.</STRONG></P>
<P>In the event of a voluntary or involuntary dissolution, liquidation, or
winding up of the Corporation, the Holders of Preferred Stock shall be entitled
to receive out of the assets of the Corporation legally available for
distribution to holders of its capital stock, before any payment or distribution
shall be made to holders of shares of Common Stock or any other class of stock
ranking junior to the Preferred Stock, an amount per share of Preferred Stock
equal to $1,000 (the "Liquidation Value") plus any accrued and unpaid dividends
on the Preferred Stock. If upon such liquidation, dissolution, or winding up of
the Corporation, whether voluntary or involuntary, the assets to be distributed
among the Holders of Preferred Stock shall be insufficient to permit payment to
the Holders of Preferred Stock of the amount distributable as aforesaid, then
the entire assets of the Corporation to be so distributed shall be distributed
ratably among the Holders of Preferred Stock and shares of such other classes or
series ranking on a parity with the shares of this Preferred Stock in proportion
to the full distributable amounts for which holders of all such parity shares
are entitled upon such distribution, liquidation, or winding up. Upon any such
liquidation, dissolution or winding up of the Corporation, after the Holders of
Preferred Stock shall have been paid in full the amounts to which they shall be
entitled, the remaining net assets of the Corporation may be distributed to the
holders of stock ranking on liquidation junior to the Preferred Stock and the
Holders of the Preferred Stock shall have no right or claim to any of the
remaining assets of the Corporation. Written notice of such liquidation,
dissolution or winding up, stating a payment date, the amount of the liquidation
payments and the place where said liquidation payments shall be payable, shall
be given by mail, postage prepaid or by telex or facsimile to non-U.S.
residents, not less than 10 days prior to the payment date stated therein, to
the Holders of record of Preferred Stock, such notice to be addressed to each
such Holder at its address as shown by the records of the Corporation. For
purposes hereof the shares of Common Stock, shall rank on liquidation junior to
the Preferred Stock.</P>
<P><STRONG>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restrictions.</STRONG></P>
<P>The Corporation will not amend or modify the terms of its Restated
Certificate of Incorporation so as to adversely alter or change the Preferred
Stock at any time when shares of Preferred Stock are outstanding, without the
approval of the Holders of at least a majority of the then outstanding shares of
Preferred Stock given in<STRONG> </STRONG>writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a series, except where
the vote or written consent of the</P>
<P>&nbsp;</P>
<P>
<CENTER>-2-</CENTER>
<P></P>
<P>Holders of a greater number of shares of Common Stock of the Corporation is
required by law or by the Corporation's Certificate of Incorporation, as
amended.</P>
<P><STRONG></STRONG><STRONG>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Optional Conversion.</STRONG></P>
<P>The Holders of shares of Preferred Stock shall have the following conversion
rights to convert the shares of Preferred Stock into shares of Common Stock of
the Corporation:</P>
<P><STRONG>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Right to Convert.</STRONG> The Preferred Stock shall not be
convertible into shares of Common Stock until after April 20, 2000.</P>
<P><STRONG>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion Dates.</STRONG> The Preferred Stock may be convertible
into shares of Common Stock at any time after April 20, 2000.</P>
<P><STRONG>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right to Convert; Conversion Price</STRONG>. Subject to the terms
hereof, as used herein, the term Conversion Price per outstanding share of
Preferred Stock shall be One Dollar and 875/100 ($1.875); except that after the
expiration of one hundred and eighty (180) days after the Closing Date if the
average of the closing bid price per share of Common Stock quoted on the NASDAQ
(or the closing bid price of the Common Stock as quoted on the national
securities exchange if the Common Stock is not listed for trading on the NASDAQ
but is listed for trading on a national securities exchange) for the five (5)
trading days immediately prior to the particular date of each Conversion Notice
(as defined below) is less than Two Dollars and 34/100 ($2.34), then the
Conversion Price for that particular conversion shall be eighty percent (80%) of
the average of the closing bid price of the Common Stock on the NASDAQ (or if
the Common Stock is not listed for trading on the NASDAQ but is listed for
trading on a national securities exchange then eighty percent (80%) of the
average of the closing bid price of the Common Stock on the national securities
exchange) for the five (5) trading days immediately prior to the particular date
of the Conversion Notice. Notwithstanding the foregoing, the Conversion Price
shall not be less than a minimum of $1.50 per share ("Minimum Conversion Price")
for a period of twenty-four (24) months from April&nbsp;20, 1999. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the outstanding shares of Preferred Stock are converted, in whole
or in part, into Common Stock pursuant to the terms of this Section 5(c), 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 Stated Value
of the Preferred Stock so surrendered for conversion by (b) the Conversion Price
in effect on the date of that particular Conversion Notice relating to such
conversion. At the time of conversion of shares of the 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 on the shares of Preferred
so converted to the date of the Conversion Notice relating to such 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 the Conversion Notice relating to such conversion of the shares of
Preferred Stock so converted divided by the Stock Dividend Price, in effect at
the date of the Conversion Notice relating to such conversion.</P>
<P>&nbsp;</P>
<P>
<CENTER>-3-</CENTER>
<P></P>
<P><STRONG>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion Notice</STRONG>. The right of conversion shall be
exercised by the Holder thereof by telecopying or faxing an executed and
completed written notice signed by an authorized representative of the Holder,
("Conversion Notice") to the Corporation that the Holder elects to convert a
specified number of shares of Preferred Stock representing a specified Stated
Value thereof into shares of Common Stock and by delivering by express courier
the certificate or certificates of Preferred Stock being converted to the
Corporation at its principal office (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the Holders
of the Preferred Stock). The business date indicated on a Conversion Notice
which is telecopied to and received by the Corporation in accordance with the
provisions hereof shall be deemed a Conversion Date. The Conversion Notice shall
include therein the Stated Value of shares of Preferred Stock to be converted,
and a calculation (a) of the Stock Dividend Price, (b) the Conversion Price, and
(c) the number of Shares of Common Stock to be issued in connection with such
conversion. The Corporation shall have the right to review the calculations
included in the Conversion Notice, and shall provide notice of any discrepancy
or dispute therewith within three (3) business days of the receipt thereof. The
Holder shall deliver to the Corporation an original Conversion Notice and the
original Preferred to be converted within three (3) business days from the date
of the Conversion Notice.</P>
<P><STRONG>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Certificates - Time Conversion Effected</STRONG>.
Promptly, but in<STRONG> </STRONG>no event more than six (6) business days,
after the receipt by facsimile of the Conversion Notice referred to in
Subparagraph (5)(c); and provided within the six (6) business days the
Corporation receives the certificate or certificates for the shares of Preferred
Stock to be converted, the Corporation shall issue and deliver, or cause to be
issued and delivered, to the Holder, registered in the name of the Holder, a
certificate or certificates for the number of whole shares of Common Stock into
which such shares of Preferred Stock are converted. Such conversion shall be
deemed to have been effected as of the close of business on the date on which
the telecopy or facsimile Conversion Notice shall have been received by the
Corporation, and the rights of the Holder of such share or shares of Preferred
Stock shall cease, at such time, and the Holder or Holders shall be deemed to
have become the Holder or Holders of record of the shares of Common Stock
represented thereby. </P>
<P>In the event that the shares of Common Stock issuable upon conversion of the
Preferred, are not delivered within six (6) business days of the date the
Corporation receives the Conversion Notice, the Corporation shall pay to the
Holder, by wire transfer, as liquidated damages for such failure and not as a
penalty, for each $100,000 of Preferred sought to be converted, $500 for each of
the first five (5) calendar days and $1,000 per calendar day thereafter that the
shares of Common Stock are not delivered, which liquidated damages shall begin
to run from the seventh (7th) business day after the Conversion Date. Any and
all payments required pursuant to this paragraph shall be payable only in cash.
Notwithstanding the above, liquidated damages shall not exceed $2,000.00 per
day. In addition to the liquidated damages set forth herein, in the event the
Corporation fails to deliver the shares of Common Stock within six (6) business
days after the Conversion date, the Corporation agrees to issue the larger
number of shares of Common Stock derived from (i) the original Conversion
Notice, or (ii) utilizing the five lowest closing bid prices of the
Corporation's shares of Common Stock beginning on the Conversion Date and ending
on the day the shares of Common Stock are delivered. The Corporation</P>
<P>&nbsp;</P>
<P>
<CENTER>-4-</CENTER>
<P></P>
<P>understands that a delay in the issuance of the shares of Common Stock could
result in economic loss to the Holder. Nothing contained herein, or in the
Preferred shall limit the Holder's rights to pursue actual damages for the
Corporation's failure to issue and deliver shares of Common Stock to the Holder
in accordance with the terms of the Certificate of Designations, and this
Agreement. </P>
<P><STRONG>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fractional Shares of Common Stock.</STRONG> No fractional shares
of Common Stock shall be issued upon conversion of any Preferred Stock into
shares of Common Stock. All fractional shares of Common Stock shall be
aggregated and then rounded down to the nearest whole share of Common Stock. In
case the number of shares of Preferred Stock represented by the certificate or
certificates surrendered pursuant to Subparagraph 5(d) exceeds the number of
shares of Common Stock converted, the Corporation shall, upon such conversion,
execute and deliver to the Holder, at the expense of the Corporation, a new
certificate or certificates for the number of shares of Preferred Stock
represented by the certificate or certificates surrendered which are not to be
converted.</P>
<P><STRONG>(g) Merger or Consolidation</STRONG>. 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 while any shares of Preferred
Stock are outstanding and prior to the date that the Corporation's Registration
Statement covering all the shares of Common Stock issuable upon the conversion
of the Preferred Stock is declared effective by the U.S. Securities and Exchange
Commission ("Commission"), the Corporation or such successor corporation as the
case may be, shall make appropriate provision so that the Holder of each share
of Preferred Stock then outstanding shall have the right to convert such share
of 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 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 Section 5.</P>
<P>In the event of a Merger or Sale, where the Corporation is not the surviving
Corporation, the Holder shall have the right to redeem all of the outstanding
shares of Preferred Stock at 120% of the Liquidation Value of each share of
Preferred Stock then outstanding plus all accrued and unpaid dividends (the
"Redemption Amount"). The Corporation shall pay this Redemption Amount in cash
within ten (10) business days of receipt by the Corporation of notice from the
Holder, and receipt by the Corporation of all outstanding shares of Preferred
Stock duly endorsed by the Holder to the Corporation.</P>
<P><STRONG></STRONG><STRONG>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to Conversion Price for Stock
Dividends and for Combinations or Subdivisions of Common Stock</STRONG>. If the
Corporation at any time or from time to time while shares of Preferred Stock are
issued and outstanding shall declare or pay, 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
if the outstanding shares of Common Stock shall be combined or consolidated, by</P>
<P>&nbsp;</P>
<P>
<CENTER>-5-</CENTER>
<P></P>
<P>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.</P>
<P><STRONG>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments for Reclassification and Reorganization</STRONG>. If
the Common Stock issuable upon conversion of the Preferred Stock shall be
changed into the same or a different number of shares of Common Stock of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination or shares
of Common Stock provided for in Section 5(h) hereof), the Conversion Price then
in effect shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Preferred Stock shall
be convertible into, in lieu of the number of shares of Common Stock which the
holders of Preferred Stock would otherwise have been entitled to receive, a
number of shares of Common Stock 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 Preferred Stock immediately
before that change.</P>
<P><STRONG>6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption</STRONG>.</P>
<P>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Redemption at Corporation's Option</STRONG>. Except as otherwise
provided in this Section 6, at any time, and from time to time, 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 16 Class P
Preferred Stock at the following cash redemption prices if redeemed during the
following periods: (i)<STRONG> </STRONG>within twelve (12) months from<STRONG>
</STRONG>April 20, 1999 - $1,100 per share, and (ii) after twelve (12) months
from<STRONG> </STRONG>April 20, 1999 - $1,200 per share (as applicable, the
redemption price of $1,100 or $1,200 is referred to herein as the "Redemption
Price").</P>&nbsp;
<P>(b)<STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mechanics of Redemption</STRONG>. Prior to any date stipulated by
the Corporation for the redemption of Series 16 Class P 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 16 Class P Preferred
Stock. The Redemption Notice shall state: (i) the Redemption Date of such
shares, (ii) the number of Series 16 Class P 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 16
Class P Preferred Stock to be redeemed from such holder, and (iv) instructions
as to how to specify to the Corporation the number of Series 16 Class P
Preferred Stock to be redeemed as provided in this Part 6 and, if the Redemption
Notice is mailed to the Holder after the first twelve (12) months from April 20,
1999, the number of shares to be converted into Common Stock as provided in Part
5 hereof.</P>
<P>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Rights of Conversion Upon Redemption</STRONG>. If the redemption
occurs during the first twelve (12) months after April 20, 1999, the holder may
not convert any redeemed shares. If the redemption occurs after the first twelve
(12) months after April 20, 1999, then, upon receipt of the Redemption Notice,
any holder of Series 16 Class P Preferred Stock shall have five business days
during which it may exercise the</P>&nbsp;
<P>
<CENTER>-6-</CENTER>
<P></P>
<P>option, at its sole election, to specify what portion of its Series 16 Class
P Preferred Stock called for redemption in the Redemption Notice shall be
redeemed as provided in this Part 6 or converted into Common Stock in the manner
provided in Part 5 hereof, except that, notwithstanding any provision of such
Part 5 to the contrary, after twelve (12) months from April 20, 1999, such
holder shall have the right to convert into Common Stock that number of Series
16 Class P Preferred Stock called for redemption in the Redemption Notice.</P>
<P>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Surrender of Certificates</STRONG>. On or before the Redemption
Date in respect of any Series 16 Class P 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 hereof, to the order of the
person whose name appears on such certificate or certificates as the owner
thereof, and each surrendered share certificate shall be canceled and retired.
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
16 Class P 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.</P>
<P>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Payment</STRONG>. On the Redemption Date in respect of any Series
16 Class P Preferred Stock or prior thereto, the Corporation shall deposit with
any bank or trust company having a capital and surplus of at least $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 16 Class P Preferred Stock in respect of which the Corporation has
received notice from the holder thereof of its election to convert Series 16
Class P 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.</P>
<P><STRONG></STRONG><STRONG>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assignment.</STRONG> </P>
<P>Subject to all applicable restrictions on transfer, the rights and
obligations of the Corporation and the Holder of the Preferred Stock shall be
binding upon and benefit the successors, assigns, heirs, administrators, and
transferees of the parties.</P>&nbsp;
<P>
<CENTER>-7-</CENTER>
<P></P>
<P><b>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of Common Stock to be Reserved.</b></P>
<P>The Corporation, upon the effective date of this Certificate of Designations,
has a sufficient number of shares of Common Stock available to reserve for
issuance upon the conversion of all outstanding shares of Preferred Stock,
pursuant to the terms and conditions set forth in Section 5, and exercise of the
Warrants as defined in Section 12. The Corporation will at all times reserve and
keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon the conversion of Preferred Stock, and exercise of the
Warrants, as herein provided, such number of shares of Common Stock as shall
then be issuable upon the conversion of all outstanding shares of Preferred
Stock, and exercise of the Warrants. The Corporation covenants that all shares
of Common Stock which shall be so issued shall be duly and validly issued, fully
paid and non assessable. The Corporation will take such action as may be
required, if the total number of shares of Common Stock issued and issuable
after such action upon conversion of the Preferred Stock, and exercise of the
Warrants would exceed the total number of shares of Common Stock then authorized
by the Corporation's Certificate of Incorporation, as amended, or would exceed
19.99% of the shares of Common Stock then outstanding if required by law or the
Rules and Regulations of NASDAQ or the National Securities Exchange applicable
to the Corporation to take such action as a result of exceeding such 19.99%, in
order to increase the number of shares of Common Stock to permit the Corporation
to issue the number of shares of Common Stock required to effect conversion of
the Preferred, and exercise of the Warrants, to a number sufficient to permit
conversion of the Preferred Stock, and exercise of the Warrants, including,
without limitation, engaging in reasonable efforts to obtain the requisite
stockholder approval of any necessary amendment to the Corporation's Restated
Certificate of Incorporation, and to obtain shareholders approval in order to
effect conversion of the Preferred Stock, and exercise of the Warrants, if
required by law or the rules or regulations of the NASDAQ or National Securities
Exchange applicable to the Corporation.</P>
<P><STRONG>8(a)</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>Shareholder Approval</STRONG>. In connection
with the issuance to the Holder of the shares of Preferred Stock, pursuant to
this Certificate of Designations, the Corporation is also issuing (i) certain
warrants ("RBB Warrants") to the Holder pursuant to the terms of that certain
Private Securities Subscription Agreement dated June 30, 1998 (the "Agreement"),
providing for the purchase of up to 150,000 shares of Common Stock at an
exercise price of $2.50 per share and (ii) certain warrants (collectively, the
"Liviakis Warrants") to Liviakis Financial Communication, Inc. ("Liviakis") and
Robert B. Prag providing for the purchase of up to an aggregate of 2,500,000
shares of Common Stock at an exercise price of $1.875 per share pursuant to the
terms of that Liviakis Agreement dated June 30, 1998, between Liviakis and the
Corporation.</P>
<P>If (i) the aggregate number of shares of Common Stock issued by the
Corporation as a result of any or all of the following: (a) conversion of the
Preferred Stock, (b) payment of dividends accrued on the Preferred Stock (c)
exercise of the RBB Warrants, and (d) exercise of the Liviakis Warrants exceeds
2,388,347 shares of Common Stock (which equals 19.9% of the outstanding shares
of Common Stock of the Corporation as of the date of this Certificate of
Designations) and (ii) the Holder has converted or elects to convert any of the
then outstanding shares of Preferred Stock pursuant to the terms of Section 5 at
a Conversion Price less than $ 1.875 ($1.875 being the market value per share of
Common Stock as</P>&nbsp;
<P>
<CENTER>-8-</CENTER>
<P></P>
<P>as quoted on the NASDAQ as of the close of
business on June 30, 1998) pursuant to the terms of Section 5(c) hereof, other
than if the Conversion Price is less than $ 1.875 solely as a result of the
anti-dilution provisions of Section 5(h) and (i) hereof, then, notwithstanding
anything in Section 5 to the contrary, the Corporation shall not issue any
shares of Common Stock as a result of receipt of a Conversion Notice unless and
until the Corporation shall have obtained approval of its shareholders entitled
to vote on the transactions in accordance with subparagraphs (25)(H)(i)d, (iv)
and (v) of Rule 4310 of the NASDAQ Marketplace Rules ("Shareholder
Approval").</P>
<P>If Shareholder Approval is required as set forth in the above paragraph, the
Corporation shall take all necessary steps to obtain such Shareholder Approval
upon receipt of the Conversion Notice triggering the need for Shareholder
Approval ("Current Conversion Notice"). If the Corporation has not received from
the Holder a Current Conversion Notice, the Holder, subsequent to January 1st,
1999 may, if the Corporation's shares of Common Stock trade, subsequent to
January 1st, 1999, at a five (5) day average closing bid price below Two Dollars
and 34/00 ($2.34), upon written notice to the Corporation, require the
Corporation to obtain Shareholder Approval ("Holder's Notice"). The Holder and
the Corporation's officers and directors covenant to vote all shares of Common
Stock over which they have voting control in favor of Shareholder Approval. If
the Corporation does not obtain Shareholder Approval within ninety (90) days of
the earlier of the Corporation's receipt of (i) the Current Conversion Notice or
(ii) the Holder's Notice, and the Holder has not breached its covenant to vote
all shares of Common Stock over which they have voting control in favor of
Shareholder Approval, the Corporation shall pay in<U> </U>cash to the Holder
liquidated damages, in an amount of 4% per month of the Liquidation Value of
each share of Preferred Stock then outstanding, commencing on the 91st day of
the Corporation's receipt of the Holder's Current Conversion Notice, and
continuing every thirty (30) days pro-rata until such time the Corporation
receives Shareholder Approval.<U></U></P>
<P><STRONG></STRONG><STRONG>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Reissuance of Series 16 Class P Convertible
Preferred Stock.</STRONG></P>
<P>Shares of Preferred Stock which are converted into shares of Common Stock as
provided herein 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.</P>
<P><STRONG></STRONG><STRONG>10.&nbsp;&nbsp;&nbsp;&nbsp;Closing of Books.</STRONG></P>
<P>The Corporation will at no time close its transfer books against the transfer
of any Preferred Stock or of any shares of Common Stock issued or issuable upon
the conversion of any shares of Common Stock of Preferred Stock in<STRONG>
</STRONG>any manner which interferes with the timely conversion of such
Preferred Stock, except as may otherwise be required to comply with applicable
securities laws.</P>&nbsp;
<P>
<CENTER>-9-</CENTER>
<P></P>&nbsp;
<P><b>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Preemptive Rights.</b></P>
<P>The 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.<STRONG></STRONG></P>
<P><STRONG>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definition of Shares.</STRONG></P>
<P>As used in this Certificate of Designations, the term "shares of Common
Stock" shall mean and include the Corporation's authorized common stock, par
value $.001, as constituted on the date of filing of these terms of the
Preferred Stock, or in case of any reorganization, reclassification, or stock
split of the outstanding shares of Common Stock thereof, the stock, securities
or assets provided for hereof. The term "Warrants" as used herein shall have the
same meaning as defined in Section 1 of the Private Securities Subscription
Agreement, dated June 30, 1998, between the Company and RBB Bank
Aktiengesellschaft.</P>
<P>The said determination of the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions thereof, relating to the Preferred Stock was duly made by the Board
of Directors pursuant to the provisions of the Corporation's Restated
Certificate of Incorporation and in accordance with the provisions of the
Delaware General Corporation Law.</P>&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<P>
<CENTER>-10-</CENTER>
<P>&nbsp;</P>&nbsp;
<P><FONT face="CG Times">
<CENTER><STRONG>CERTIFICATE OF ELIMINATION<BR></STRONG></CENTER><STRONG>
<CENTER>OF<BR>SERIES 11 CLASS K CONVERTIBLE PREFERRED STOCK<BR>AND<BR>SERIES 12
CLASS L CONVERTIBLE PREFERRED STOCK<BR>AND<BR>SERIES 13 CLASS M CONVERTIBLE
PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.<BR>____________________________________________ </STRONG></CENTER></FONT>
<p><BR WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="CG Times">PERMA-FIX ENVIRONMENTAL SERVICES,
INC., a corporation organized and existing under the General Corporation Law of
the State of Delaware (hereinafter called the "Corporation"), hereby certifies
the following:</FONT>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of Series
11
Class K Convertible Preferred Stock, par value $.001 per share, of the
Corporation (the "Series 11 Preferred") was filed with the Delaware Secretary of
State on</FONT> July 15<FONT face="CG Times">, 1999 (the "Series 11 Certificate of
Designations").</FONT></P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
all outstanding shares of the Series 11 Preferred have been delivered to the
Company and exchanged pursuant to an agreement with the holder thereof in
accordance with the terms and conditions of a certain Exchange Agreement between
the Company and RBB Bank Aktiengesellschaft, dated as of August 3, 1999.</font></P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
no shares of Series 11 Preferred remain outstanding.</font></P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
all shares of the Series 11 Preferred which have been exchanged have the status
of authorized and unissued shares of the Preferred Stock of the Corporation
without designation as to series, until such shares are once more designated as
part of a particular series by the Board of Directors.</font></P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
effective August 3, 1999, the Board of Directors of the Company duly adopted the
following resolutions:</font></P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
RESOLVED, that upon completion of the exchange with the holder of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
11 Class K Convertible Preferred Stock, no authorized shares of Series&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11
Class K Convertible Preferred Stock will remain outstanding and no shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
Series 11 Class K Convertible Preferred Stock will be issued subject to
the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificate
of Designations previously filed with respect to the Series 11 Class K&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible
Preferred Stock.</font></P>
<P><font face="CG Times" size="1">STATE OF DELAWARE<br>
SECRETARY OF STATE<br>
DIVISION OF CORPORATIONS<br>
FILED 12:33 PM 08/10/1999<br>
991331581 - 2249849</font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER
RESOLVED, that upon completion of the exchange, the officers<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
the Company are hereby authorized and directed, for and on behalf of<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company, to execute and deliver an appropriate Certificate of Elimination<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the Secretary of State of Delaware regarding the Series 11 Class K<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible
Preferred Stock.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
the Certificate of Designations of the Series 12 Class L Convertible Preferred
Stock, par value $.001 per share, of the Corporation (the &quot;Series 12
Preferred&quot;) was filed on July 15, 1999 (the &quot;Series 12 Certificate of
Designations&quot;).</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
all outstanding shares of the Series 12 Preferred have been delivered to the
Company and exchanged pursuant to an agreement with the holder thereof in
accordance with the terms and conditions of a certain Exchange Agreement between
the Company and RBB Bank, dated as of August 3, 1999.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
no shares of Series 12 Preferred remain outstanding.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
all shares of the Series 12 Preferred which have been exchanged have the status
of authorized and unissued shares of the Preferred Stock of the Corporation
without designation as to series, until such shares are once more designated as
part of a particular series by the Board of Directors.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;That
effective August 3, 1999, the Board of Directors of the company duly adopted the
following resolutions:</P><P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
RESOLVED, that upon completion of the exchange with the holder of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
12 Class L Convertible Preferred Stock, no authorized shares of Series&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12
Class L Convertible Preferred Stock will remain outstanding and no shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
Series 12 Class L Convertible Preferred Stock will be issued subject to
the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificate
of Designations previously filed with respect to the Series 12 Class L&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible
Preferred Stock.</font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER
RESOLVED, that upon completion of the exchange, the officers<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
the Company are hereby authorized and directed, for and on behalf of<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company, to execute and deliver an appropriate Certificate of Elimination<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the Secretary of State of Delaware regarding the Series 12 Class L<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible
Preferred Stock.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;That
the Certificate of Designations of the Series 13 Class M Convertible Preferred
Stock, par value $.001 per share, of the Corporation (the &quot;Series 13
Preferred&quot;) was filed on July 15, 1999 (the &quot;Series 13 Certificate of
Designations&quot;).</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;That
all outstanding shares of the Series 13 Preferred have been delivered to the
Company and exchanged pursuant to an agreement with the holder thereof in
accordance with the terms and conditions of a certain Exchange Agreement between
the Company and RBB Bank, dated as of August 3, 1999.</P><P>&nbsp;</P><P align="center">-2-</P><P>&nbsp;</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;That
no shares of Series 13 Preferred remain outstanding.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;That
all shares of the Series 13 Preferred which have been exchanged have the status
of authorized and unissued shares of the Preferred Stock of the Corporation
without designation as to series, until such shares are once more designated as
part of a particular series by the Board of Directors.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;That
effective August 3, 1999, the Board of Directors of the company duly adopted the
following resolutions:</P><P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
RESOLVED, that upon completion of the exchange with the holder of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series
13 Class M Convertible Preferred Stock, no authorized shares of Series&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13
Class M Convertible Preferred Stock will remain outstanding and no shares&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
Series 13 Class M Convertible Preferred Stock will be issued subject to
the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificate
of Designations previously filed with respect to the Series 13 Class M&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible
Preferred Stock.</font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER
RESOLVED, that upon completion of the exchange, the officers<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
the Company are hereby authorized and directed, for and on behalf of<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
Company, to execute and deliver an appropriate Certificate of Elimination<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the Secretary of State of Delaware regarding the Series 13 Class M<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible
Preferred Stock.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;That
pursuant to the provisions of Section 151(g) of the Delaware General Corporation
Law, upon the effective date of the filing of this Certificate, this Certificate
will have the effect of eliminating from the Restated Certificate of
Incorporation only those matters set forth in the Restated Certificate of
Incorporation with respect to the Series 11 Class K Convertible Preferred Stock,
the Series 12 Class L Convertible Preferred Stock, and the Series 13 Class M
Convertible Preferred Stock</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, this Certificate of&nbsp; Elimination has been executed this
10th day of August, 1999, by the President of the Company.</P><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL<br>
ATTEST:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SERVICES,
INC.<br>
<br>
<br>
<u>/s/ Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
By<u> /s/ Louis Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
Richard T. Kelecy,
Secretary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.
Louis F. Centofanti, President<br>
(SEAL)</P><P>&nbsp;</P><P>&nbsp;</P><P>&nbsp;</P>
<p align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 10:00 AM 06/14/2001&nbsp;&nbsp;<br>
010285655 - 2249849&nbsp;&nbsp;&nbsp;</font>
<P><FONT face="CG Times" size=3><STRONG>
<CENTER>CERTIFICATE OF DESIGNATIONS<BR>OF SERIES 17 CLASS Q CONVERTIBLE
PREFERRED STOCK<BR>OF<BR>PERMA-FIX ENVIRONMENTAL SERVICES, INC.
</STRONG></CENTER></FONT>
<p><FONT size=3><BR WP="BR1"></FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="CG Times" size=3>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:</FONT>
<P><FONT face="CG Times" size=3>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 17 Class Q
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 17 Class
Q Convertible Preferred Stock as set forth in the attached
resolutions.</FONT></P>
<P><FONT face="CG Times">Dated: May 25, 2001.</FONT></P>&nbsp;
<P><FONT
face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL SERVICES, INC.</FONT></P><BR WP="BR1"><BR
WP="BR2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Louis
Centofanti<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
face="CG Times">By_________________________________________<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
face="CG Times">Dr. Louis F.
Centofanti<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
face="CG Times">Chairman of the Board</FONT>
<P><FONT face="CG Times">ATTEST:</FONT></P><BR WP="BR1"><BR WP="BR2">/s/ Richard
T. Kelecy<BR><FONT face="CG Times">______________________________<BR>Richard T.
Kelecy, Secretary</FONT>
<P><BR WP="BR1"><BR WP="BR2"><BR WP="BR1"><BR WP="BR2">
<P><FONT face="CG Times">
<CENTER><STRONG>PERMA-FIX ENVIRONMENTAL SERVICES,
INC.<BR></STRONG></CENTER><STRONG>
<CENTER>(the "Corporation")<BR><BR>RESOLUTION OF THE BOARD OF
DIRECTORS<BR><BR>FIXING THE NUMBER AND DESIGNATING THE RIGHTS,
PRIVILEGES,<BR>RESTRICTIONS AND CONDITIONS ATTACHING TO THE<BR>SERIES 17 CLASS Q
CONVERTIBLE PREFERRED STOCK</CENTER></STRONG></FONT>
<P></P><BR WP="BR1"><FONT face="CG Times"><STRONG>RE: DESIGNATION OF SERIES 17
CLASS Q CONVERTIBLE PREFERRED STOCK</STRONG>.</FONT>
<P><FONT face="CG Times"><STRONG>RESOLVED:</STRONG> That the designations,
powers, preferences and rights of the Series 17 Class Q Convertible Preferred
Stock be, and they hereby are, as set forth below:</FONT></P><FONT
face="CG Times"><STRONG>1.&nbsp;&nbsp;Designation, Number of Shares of Preferred
Stock of Series 17 Class Q
Convertible&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock and
Dividends. </STRONG></FONT>
<P><FONT face="CG Times"><FONT face="CG Times"><STRONG></STRONG></FONT>The
Corporation hereby authorizes the issuance of up to two thousand five hundred
(2,500) shares of Series 17 Class Q Convertible Preferred Stock, par value $.001
per share (the "Preferred Stock"). The holders of the Preferred Stock
(individually, the "Holder," and collectively, the "Holders") are entitled to
receive if, when and as declared by the Board of Directors of the Corporation
(the"Board") out of funds legally available therefore, cumulative dividends at
an annual dividend rate, based on a 365 day calendar year, of 5% of the
Liquidation Value (as defined in Section 3 hereof) ("Dividend Rate") for each
share of the Preferred Stock then issued and outstanding as of the acceptable
declaration of such dividend, payable semiannually within ten (10) business days
after each subsequent June 30th and December 31st (each a "Dividend Declaration
Date"), and shall be payable in cash or shares of the Corporation's common
stock, par value $.001 per share ("Common Stock"), at the Corporation's option.
The first Dividend Declaration Date shall be December 31st, 2001. Dividends
shall be paid only with respect to the shares of Preferred Stock actually issued
and outstanding on the Dividend Declaration Date and to Holders of record on the
Dividend Declaration Date. Dividends shall accrue from the first day of the
semi-annual dividend period in which such dividend may be payable, except with
respect to the first semi-annual dividend which shall accrue from the date of
the issuance of the Preferred Stock.</FONT></P>
<P><FONT face="CG Times">In the event that the Board elects to pay the accrued
dividends due as of a Dividend Declaration Date on the outstanding shares of
Preferred Stock in Common Stock of the Corporation, the Holder of each share of
Preferred Stock shall receive that 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 average closing bid quotation of the Corporation's Common Stock as
reported on the National Association of Securities Dealers Automated</FONT></P>
<P>&nbsp;</P>
<P align="center">-1-</P>
<P>&nbsp;</P>
<P><FONT face="CG Times">Quotation
system ("NASDAQ"), or if the Common Stock is not listed for trading on the
NASDAQ but is listed for trading on a national securities exchange, the average
closing price of the Common Stock as quoted on such national 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 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 Preferred Stock shall have been
paid or declared and set aside for payment.</FONT></P>
<P><FONT face="CG Times"><STRONG></STRONG></FONT><FONT
face="CG Times"><STRONG>2. Voting.</STRONG></FONT></P>
<P><FONT face="CG Times">Except as provided under Section 242(2) of the Delaware
General Corporation Law ("GCL"), the Preferred Stock shall not have any voting
rights and the Holders of the Preferred Stock shall not have the right to vote
on any matter. Notwithstanding the provisions of Section 242 of the GCL, the
number of authorized shares of any class or classes of stock of the Corporation
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, voting together as a single class,
irrespective of the provisions of Section 242 of the GCL.</FONT></P>
<P><FONT face="CG Times"><STRONG>3. Liquidation.</STRONG></FONT></P>
<P><FONT face="CG Times">In the event of a voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the Holders of the Preferred
Stock shall be entitled to receive out of the assets of the Corporation legally
available for distribution to holders of its capital stock, before any payment
or distribution shall be made to holders of shares of Common Stock or any other
class of stock ranking junior to the Preferred Stock, an amount per share of the
Preferred Stock equal to $1,000 (the "Liquidation Value"), plus any accrued and
unpaid dividends on the Preferred Stock. If upon such liquidation, dissolution,
or winding up of the Corporation, whether voluntary or involuntary, the assets
to be distributed among the Holders of the Preferred Stock shall be insufficient
to permit payment to the Holders of the Preferred Stock of the amount
distributable as aforesaid, then the entire assets of the Corporation to be so
distributed shall be distributed ratably among the Holders of the Preferred
Stock and shares of such other classes or series ranking on a parity with the
shares of the Preferred Stock in proportion to the full distributable amounts
for which holders of all such parity shares are entitled upon such distribution,
liquidation, or winding up. Upon any such liquidation, dissolution or winding up
of the Corporation, after the Holders of Preferred Stock shall have been paid in
full the amounts to which they shall be entitled, the remaining net assets of
the Corporation may be distributed to the holders of stock ranking on
liquidation junior to the Preferred Stock and the Holders of the Preferred Stock
shall have no right or claim to any of the remaining assets of the Corporation.
Written notice of such liquidation, dissolution or winding up, stating a payment
date, the amount of the liquidation payments and the place where said
liquidation payments shall be payable, shall be given by mail, postage</FONT></P>
<P>&nbsp;</P>
<P align="center">-2-</P>
<P>&nbsp;</P>
<P><FONT face="CG Times">prepaid
or by telex or facsimile to non-U.S. residents, not less than 10 days prior to
the payment date stated therein, to the Holders of record of the Preferred
Stock, such notice to be addressed to each such Holder at its address as shown
by the records of the Corporation. For purposes hereof, the shares of Common
Stock shall rank on liquidation junior to the Preferred Stock.</FONT></P>
<P><FONT face="CG Times"><STRONG>4. Optional Conversion.</STRONG></FONT></P>
<P><FONT face="CG Times">The Holders of shares of Preferred Stock shall have the
following conversion rights to convert the shares of Preferred Stock into shares
of Common Stock of the Corporation as follows:</FONT></P>
<P><FONT face="CG Times"><STRONG>(a) Intentionally left
blank.</STRONG></FONT></P>
<P><FONT face="CG Times"><STRONG>(b) Right to Convert; Conversion
Price</STRONG>. Subject to the terms hereof, as used herein, the term Conversion
Price per outstanding share of Preferred Stock shall be One Dollar and 50/100
($1.50). If any of the outstanding shares of Preferred Stock are converted, in
whole or in part, into Common Stock pursuant to the terms of this Section 4, the
number of shares of whole Common Stock to be issued as a result of such
conversion shall be determined by dividing (a) the aggregate Liquidation Value
of the Preferred Stock so surrendered for conversion by (b) the Conversion Price
in effect on the date of that particular Conversion Notice relating to such
conversion. At the time of conversion of shares of the 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 on the shares of the
Preferred Stock so converted to the date of the Conversion Notice relating to
the shares of Preferred Stock so converted under such 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
the Conversion Notice relating to such conversion of the shares of Preferred
Stock so converted divided by the Stock Dividend Price in effect at the date of
the Conversion Notice relating to such conversion.</FONT></P>
<P><FONT face="CG Times"><STRONG>(c) Conversion Notice</STRONG>. The right of
conversion shall be exercised by the Holder thereof by telecopying or faxing an
executed and completed written notice signed by an authorized representative of
the Holder ("Conversion Notice"), to the Corporation that the Holder elects to
convert a specified number of shares of Preferred Stock representing a specified
Liquidation Value thereof into shares of Common Stock and by delivering by
express courier the certificate or certificates of Preferred Stock being
converted to the Corporation at its principal office (or such other office or
agency of the Corporation as the Corporation may designate by notice in writing
to the Holders of the Preferred Stock). The business date indicated on a
Conversion Notice which is telecopied to and received by the Corporation in
accordance with the provisions hereof shall be deemed a Conversion Date. The
Conversion Notice shall include therein the Liquidation Value of the shares of
Preferred Stock to be converted, and a calculation (a) of the Stock Dividend
Price, (b) the Conversion Price, and (c) the number of shares of Common Stock to
be issued in connection with such conversion. The Corporation shall have the
right to review the calculations included in the Conversion Notice, and shall
provide notice of any discrepancy or dispute therewith within five (5)</FONT></P>
<P>&nbsp;</P>
<P align="center">-3-</P>
<P>&nbsp;</P>
<P><FONT face="CG Times">business
days of the receipt thereof. The Holder shall deliver to the Corporation an
original Conversion Notice and the original Preferred to be converted within
three (3) business days from the date of the Conversion Notice.</FONT></P>
<P><FONT face="CG Times"><STRONG>(d) Issuance of Certificates - Time Conversion
Effected</STRONG>. Promptly, but in<STRONG> </STRONG>no event more than fifteen
(15) business days, after the receipt by facsimile of the Conversion Notice
referred to in Section 4(c); and provided within the ten (10) business days the
Corporation receives the certificate or certificates for the shares of Preferred
Stock to be converted, the Corporation shall issue and deliver, or cause to be
issued and delivered, to the Holder, registered in the name of the Holder, a
certificate or certificates for the number of whole shares of Common Stock into
which such shares of Preferred Stock are converted. Such conversion shall be
deemed to have been effected as of the close of business on the date on which
the telecopy or facsimile Conversion Notice shall have been received by the
Corporation, and the rights of the Holder of such share or shares of Preferred
Stock shall cease at such time, and the Holder or Holders shall be deemed to
have become the holder or holders of record of the shares of Common Stock
represented thereby. </FONT></P>
<P><FONT face="CG Times"><STRONG>(e) Fractional Shares of Common Stock.</STRONG>
No fractional shares of Common Stock shall be issued upon conversion of any
Preferred Stock into shares of Common Stock. All fractional shares of Common
Stock shall be aggregated and then rounded down to the nearest whole share of
Common Stock. In case the number of shares of Preferred Stock represented by the
certificate or certificates surrendered pursuant to this Section 4(e) exceeds
the number of shares of Common Stock converted, the Corporation shall, upon such
conversion, execute and deliver to the Holder, at the expense of the
Corporation, a new certificate or certificates for the number of shares of
Preferred Stock represented by the certificate or certificates surrendered which
are not to be converted.</FONT></P>
<P><FONT face="CG Times"><STRONG>(f) Merger or Consolidation</STRONG>. 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 while any shares of Preferred Stock are outstanding and prior to the
date that the Corporation's Registration Statement covering all the Conversion
Shares is declared effective by the U. S. Securities and Exchange Commission
("SEC"), the Corporation or such successor corporation as the case may be, shall
make appropriate provision so that the Holder of each share of Preferred Stock
then outstanding shall have the right to convert such share of 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 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 Section 4.</FONT></P>
<P><FONT face="CG Times"><STRONG>(g) Adjustments to Conversion Price for Stock
Dividends and for Combinations or Subdivisions of Common Stock</STRONG>. If the
Corporation, at any time or from time to time while shares of Preferred Stock
are issued and outstanding, shall declare or pay, 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</FONT></P>
<P>&nbsp;</P>
<P align="center">-4-</P>
<P>&nbsp;</P>
<P><FONT face="CG Times">shares of Common Stock (by stock
split, reclassification or otherwise than by payment of a dividend in 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.</FONT></P>
<P><FONT face="CG Times"><STRONG>(h) Adjustments for Reclassification and
Reorganization</STRONG>. If the Common Stock issuable upon conversion of the
Preferred Stock shall be changed into the same or a different number of shares
of common stock of any other class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or
combination or shares of Common Stock provided for in Section 5(g) hereof), the
Conversion Price then in effect shall, concurrently with the effectiveness of
such reorganization or reclassification, be proportionately adjusted so that the
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the Holders of Preferred Stock would otherwise have been
entitled to receive, a number of shares of common stock 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 Preferred
Stock immediately before that change.</FONT></P>
<P><FONT face="CG Times"><STRONG>(i) Other Adjustments to Conversion
Price</STRONG>. Except as provided in subsection 4(j), if, after the Closing
Date and during the period that any of the Preferred Stock is issued and
outstanding, the Corporation shall sell (a) any shares of Common Stock for a
consideration per share less than the Conversion Price in effect immediately
prior to such sale, or (b) any rights, warrants or other securities entitling
the holders thereof to convert such securities into Common Stock at a price per
share (determined by dividing (i) the total amount, if any, received or
receivable by the Corporation in consideration of the sale of such rights,
warrants or other securities plus the total amount, if any, payable to the
Corporation upon exercise or conversion thereof by (ii) the number of additional
shares of Common Stock issuable upon exercise or conversion of such securities)
which is less than the Conversion Price in effect on the date of such sale, the
Conversion Price shall be adjusted as of the date of such sale to the amount per
share received and to be received by the Corporation in connection with such
sale, conversion and exercise as determined above. The Holders may, if approved
by the Holders of record representing a majority of the then issued and
outstanding shares of Preferred Stock, waive their rights to any adjustment to
the Conversion Price in connection with a particular sale covered by this
Section 4(i), and, in the event of such waiver, no adjustment to the Conversion
Price shall be made under this Section 4(i) as a result of such sale.</FONT></P>
<P><FONT face="CG Times"><STRONG>(j)</STRONG> <STRONG>No Adjustments</STRONG>.
No adjustment in the Conversion Price shall be required in the case of (i) the
grant by the Corporation of stock options to employees of the Corporation under
a Stock Option Plan approved by the stockholders of the Company or (ii) the
issuance of shares of Common Stock upon the exercise of stock options (a)
referred to in clause (i) hereof and (b) granted by the Corporation which grant
had triggered an adjustment in the Conversion Price.</FONT></P>
<P>&nbsp;</P>
<P align="center"><font face="CG Times">-5-</font></P>
<P>&nbsp;</P>
<P><FONT face="CG Times"><STRONG></STRONG></FONT><FONT
face="CG Times"><STRONG>5.&nbsp;&nbsp;&nbsp;&nbsp;Redemption</STRONG>.</FONT></P>
<P><FONT face="CG Times">(a) <STRONG>Redemption at Corporation's
Option</STRONG>. Except as otherwise provided in this Section 5, at any time,
and from time to time, 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 Preferred Stock at the following cash redemption prices if
redeemed during the following periods: (i)<STRONG> </STRONG>within twelve (12)
months from June 1, 2001 - $1,100 per share, and (ii) after June 1, 2002 -
$1,200 per share (as applicable, the redemption price of $1,100 or $1,200 is
referred to herein as the "Redemption Price").</FONT></P>
<P><FONT face="CG Times">(b)<STRONG> Mechanics of Redemption</STRONG>. Prior to
any date stipulated by the Corporation for the redemption of Preferred Stock
(the "Redemption Date"), written notice (the "Redemption Notice") shall be
mailed to each Holder of record on such notice date of the Preferred Stock. The
Redemption Notice shall state: (i) the Redemption Date of such shares, (ii) the
number of 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 Preferred Stock to be redeemed from such Holder, and
(iv) instructions as to how to specify to the Corporation the number of
Preferred Stock to be redeemed as provided in this Section 5.</FONT></P>
<P><FONT face="CG Times">(c) <STRONG>Rights of Conversion Upon
Redemption</STRONG>. If the redemption occurs, then, upon receipt of the
Redemption Notice, any Holder of Preferred Stock shall have five business days
during which it may exercise the option, at its sole election, to specify what
portion of its Preferred Stock called for redemption in the Redemption Notice
shall be redeemed as provided in this Section 5 or converted into Common Stock
in the manner provided in Section 4 hereof.</FONT></P>
<P><FONT face="CG Times">(d) <STRONG>Surrender of Certificates</STRONG>. On or
before the Redemption Date in respect of any 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
hereof, to the order of the person whose name appears on such certificate or
certificates as the owner thereof, and each surrendered share certificate shall
be canceled and retired. If a share certificate is surrendered and all the
shares evidenced thereby are not being redeemed (as described below), the
Corporation shall cause the 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.</FONT></P>
<P><FONT face="CG Times">(e) <STRONG>Payment</STRONG>. On the Redemption Date in
respect of any Preferred Stock or prior thereto, the Corporation shall deposit
with any bank or trust company having a capital and surplus of at least
$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 Preferred Stock in respect of which the Corporation has received notice
from the holder thereof of its election to convert Preferred Stock into Common
Stock), with</FONT></P>
<P>&nbsp;</P>
<P align="center">-6-</P>
<P>&nbsp;</P>
<P><FONT face="CG Times">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.</FONT></P>
<P><FONT face="CG Times"><STRONG></STRONG></FONT><FONT
face="CG Times"><STRONG>6. Assignment.</STRONG> </FONT></P>
<P><FONT face="CG Times">Subject to all applicable restrictions on transfer, the
rights and obligations of the Corporation and the Holder of the Preferred Stock
shall be binding upon and benefit the successors, assigns, heirs,
administrators, and transferees of the parties.</FONT></P>
<P><FONT face="CG Times"><STRONG></STRONG></FONT><FONT
face="CG Times"><STRONG>7. Shares of Common Stock to be
Reserved.</STRONG></FONT></P>
<P><FONT face="CG Times">The Corporation, upon the effective date of this
Certificate of Designations, has a sufficient number of shares of Common Stock
available to reserve for issuance upon the conversion of all outstanding shares
of Preferred Stock, pursuant to the terms and conditions set forth in Section 4.
The Corporation will at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
conversion of Preferred Stock, as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of all outstanding
shares of Preferred Stock. The Corporation covenants that all shares of Common
Stock which shall be so issued shall be duly and validly issued, fully paid and
non assessable. The Corporation will take such action as may be required, if the
total number of shares of Common Stock issued and issuable after such action
upon conversion of the Preferred Stock would exceed the total number of shares
of Common Stock then authorized by the Corporation's Certificate of
Incorporation, as amended, in order to increase the number of shares of Common
Stock to permit the Corporation to issue the number of shares of Common Stock
required to effect conversion of the Preferred Stock, and exercise of the
Warrants, to a number sufficient to permit conversion of the Preferred
Stock.</FONT></P>
<P><FONT face="CG Times"><STRONG>8. No Reissuance of Preferred
Stock.</STRONG></FONT></P>
<P><FONT face="CG Times">Shares of Preferred Stock which are converted into
shares of Common Stock as provided herein 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.</FONT></P>
<P>&nbsp;</P>
<P align="center"><font face="CG Times">-7-</font></P>
<P>&nbsp;</P>
<P><FONT face="CG Times"><STRONG></STRONG></FONT><FONT
face="CG Times"><STRONG>9. Closing of Books.</STRONG></FONT></P>
<P><FONT face="CG Times">The Corporation will at no time close its transfer
books against the transfer of any Preferred Stock or of any shares of Common
Stock issued or issuable upon the conversion of any shares of Common Stock of
Preferred Stock in<STRONG> </STRONG>any manner which interferes with the timely
conversion of such Preferred Stock, except as may otherwise be required to
comply with applicable securities laws.</FONT></P>
<P><FONT face="CG Times"><STRONG></STRONG></FONT><FONT
face="CG Times"><STRONG>10. No Preemptive Rights.</STRONG></FONT></P>
<P><FONT face="CG Times">The 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.<STRONG></STRONG></FONT></P>
<P><FONT face="CG Times"><STRONG>11. Definition of Shares.</STRONG></FONT></P>
<P><FONT face="CG Times">As used in this Certificate of Designations, the term
"shares of Common Stock" shall mean and include the Corporation's authorized
common stock, par value $.001, as constituted on the date of filing of these
terms of the Preferred Stock, or in case of any reorganization,
reclassification, or stock split of the outstanding shares of Common Stock
thereof, the stock, securities or assets provided for hereof. </FONT></P>
<P><FONT face="CG Times">The said determination of the designations, preferences
and relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, relating to the Preferred Stock was duly
made by the Board of Directors pursuant to the provisions of the Corporation's
Restated Certificate of Incorporation and in accordance with the provisions of
the Delaware General Corporation Law.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center">-8-</P>
<P>&nbsp;</P>
<P align="right"><font size="1">STATE OF DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 10:01 AM 06/14/2001&nbsp;&nbsp;<br>
0102585660 - 2249849&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></P>
<P align="center"><b>CERTIFICATE OF ELIMINATION<br>
OF<br>
SERIES 14 CLASS N CONVERTIBLE PREFERRED STOCK<br>
AND<br>
SERIES 15 CLASS O CONVERTIBLE PREFERRED STOCK<br>
AND<br>
SERIES 16 CLASS P CONVERTIBLE PREFERRED STOCK<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
____________________________________________</b></P>
<P><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix
Environmental Services, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
&quot;Corporation&quot;), hereby certifies the following:</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
the Certificate of Designations of Series 14 Class N Convertible Preferred
Stock, par value $.001 per share, of the Corporation (the &quot;Series 14
Preferred&quot;) was filed with the Delaware Secretary of State on August 10,
1999 (the &quot;Series 14 Certificate of Designations&quot;).</P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; That a portion of the outstanding shares of the
Series 14 Preferred have been converted into common stock of the Corporation and
all of the remaining balance have been delivered to the Company and exchanged
pursuant to an agreement with the holder thereof in accordance with the terms
and conditions of a certain Conversion and Exchange Agreement between the
Company and RBB Bank Aktiengesellschaft, dated as of May 25, 2001 ("Exchange
Agreement").</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 14 Preferred remain
outstanding.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 14 Preferred which
have been exchanged have the status of authorized and unissued shares of the
preferred stock of the Corporation without designation as to series, until such
shares are once more designated as part of a particular series by the Board of
Directors.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That effective May 25, 2001, the Board of Directors
of the Company duly adopted the following resolutions:</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the conversion and
exchange with the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;holder of the Series 14 Class N Convertible Preferred Stock,
no authorized&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Series 14 Class N Convertible Preferred Stock will
remain&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;outstanding and no shares of Series 14 Class N Convertible Preferred
Stock&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;will be issued subject to the Certificate of Designations previously filed
with&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;respect to the Series 14 Class N Convertible Preferred Stock.</FONT></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the exchange,
the officers&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the Company are hereby authorized and directed, for and on
behalf of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company, to execute and deliver an appropriate Certificate of
Elimination to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Secretary of State of Delaware regarding the Series 14 Class
N Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of the Series
15 Class O Convertible Preferred Stock, par value $.001 per share, of the
Corporation (the "Series 15 Preferred") was filed on August 10, 1999 (the
"Series 15 Certificate of Designations").</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 15
Preferred have been delivered to the Company and exchanged pursuant to the
Exchange Agreement.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 15 Preferred remain
outstanding.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 15 Preferred which
have been exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to series, until such
shares are once more designated as part of a particular series by the Board of
Directors.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;That effective May 25, 2001, the Board of Directors
of the Company duly adopted the following resolutions:</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange with the
holder of the Series 15&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class O Convertible Preferred Stock no authorized shares
of Series 15 Class O&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock will remain outstanding and no
shares of Series 15&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class O Convertible Preferred Stock will be issued subject
to the Certificate of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designations previously filed with respect to the Series
15 Class O Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the exchange,
the officers of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Company are hereby authorized and directed, for and on
behalf of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company, to execute and deliver an appropriate Certificate of
Elimination to the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secretary of State of Delaware regarding the Series 15 Class
O Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock. </FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the Certificate of Designations of the Series
16 Class P Convertible Preferred Stock, par value $.001 per share, of the
Corporation (the "Series 16 Preferred") was filed on August 10, 1999 (the
"Series 16 Certificate of Designations").</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all outstanding shares of the Series 16
Preferred have been delivered to the Company and exchanged pursuant to the
Exchange Agreement.</FONT></P>
<P>&nbsp;</P>
<P align="center"><font face="CG Times">-2-</font></P>
<P>&nbsp;</P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That no shares of Series 16 Preferred remain
outstanding.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That all shares of the Series 16 Preferred which
have been exchanged have the status of authorized and unissued shares of the
Preferred Stock of the Corporation without designation as to series, until such
shares are once more designated as part of a particular series by the Board of
Directors.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That effective May 25, 2001, the Board of Directors
of the Company duly adopted the following resolutions:</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESOLVED, that upon completion of the exchange with the
holder of the Series 16&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class P Convertible Preferred Stock, no authorized
shares of Series 16 Class P&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock will remain outstanding
and no shares of Series 16&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class P Convertible Preferred Stock will be issued
subject to the Certificate of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designations previously filed with respect to the
Series 16 Class P Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock.</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER RESOLVED, that upon completion of the exchange,
the officers of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Company are hereby authorized and directed, for and on
behalf of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company, to execute and deliver an appropriate Certificate of
Elimination to the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secretary of State of Delaware regarding the Series 16 Class
P Convertible&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock. </FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That pursuant to the provisions of Section 151(g)
of the Delaware General Corporation Law, upon the effective date of the filing
of this Certificate, this Certificate will have the effect of eliminating from
the Restated Certificate of Incorporation only those matters set forth in the
Restated Certificate of Incorporation with respect to the Series 14 Class N
Convertible Preferred Stock, the Series 15 Class O Convertible Preferred Stock,
and the Series 16 Class P Convertible Preferred Stock</FONT></P>
<P><FONT face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, this Certificate of Elimination has
been executed this 25<SUP>th</SUP> day of May, 2001, by the President of the
Company.</FONT></P>
<P><FONT
face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX
ENVIRONMENTAL<BR>ATTEST:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SERVICES,
INC.</FONT></P><BR><U>/s/ Richard T.
Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By:<U>&nbsp;&nbsp;/s/
Louis
Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR><FONT
face="CG Times">Richard T. Kelecy, Secretary
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr. Louis F. Centofanti,
President</FONT>
<P><FONT face="CG Times">(SEAL)</FONT></P>
<P>&nbsp;</P>
<P align="center"><font face="CG Times">-3-</font></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center"><i><font face="CG Times" size="6">Delaware<br>
</font><font face="CG Times" size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></i><font face="CG Times">PAGE
1</font><i><font face="CG Times" size="6"><br>
_________<br>
</font><font face="CG Times" size="4">The First State</font></i></P>
<P>&nbsp;</P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I,
HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF &quot;PERMA-FIX ENVIRONMENTAL SERVICES, INC.,&quot; FILED IN THIS OFFICE ON
THE TWENTIETH DAY OF JUNE, A.D. 2002, AT 10 O'CLOCK A.M.</font></P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY
RECORDER OF DEEDS.</font></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P><font face="CG Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;/s/
Harriet Smith
Windsor&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="2">Harriet
Smith Windsor, Secretary of State</font></font></P>
<P><font face="CG Times">2249849&nbsp;
8100&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUTHENTICATION:&nbsp;
1842415<br>
<br>
020398062&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATE:&nbsp;
06-20-02</font></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="right"><font face="CG Times" size="1">STATE OF
DELAWARE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
SECRETARY OF STATE&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
DIVISION OF CORPORATIONS<br>
FILED 10:00 AM 06/20/2002&nbsp;&nbsp;<br>
020398062 - 2249849&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></P>
<p><center><strong>CERTIFICATE OF AMENDMENT<br>
</strong></center><strong><center>OF<br>
RESTATED CERTIFICATE OF INCORPORATION,<br>
AS AMENDED,<br>
OF<br>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.<br>
___________________________________________</strong></center></p>
<br WP="BR1">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental Services, Inc., a Delaware corporation (the
&quot;Corporation&quot;), for purposes of amending its Restated Certificate of
Incorporation, as amended, filed January 7, 1997 (&quot;Restated Certificate of
Incorporation&quot;), as provided by Section 242 of the Delaware General
Corporation Law, does hereby certify:
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amendment set forth below to the Restated Certificate of Incorporation
was duly adopted in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The first paragraph of Article Fourth of the Corporation's Restated
Certificate of Incorporation, as amended, is hereby deleted and replaced in its
entirety by the following:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>FOURTH</u>: The total number of shares of capital stock that the
Corporation&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shall have authority to issue is 77,000,000, of which 75,000,000
shall be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;designated as common stock, par value $.001 per share (&quot;Common
Stock&quot;),&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and 2,000,000 shall be designated as preferred stock, par value
$.001 per&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;share (&quot;Preferred Stock&quot;).</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only the first paragraph of Article Fourth is amended by this Amendment,
and the remainder of Article Fourth shall remain in full force and effect. No
other provision, paragraph or article of the Restated Certificate of
Incorporation is amended or changed by this Amendment. The Restated Certificate
of Incorporation, as expressly amended by paragraph 1 of this Amendment, shall
be in full force and effect.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors, on March 13, 2002, unanimously adopted the
foregoing proposed amendment to the first paragraph of Article Fourth of the
Restated Certificate of Incorporation declared such amendment to be advisable,
and set a Special Meeting of Stockholders for consideration thereof. A Special
Meeting of Stockholders was duly called and held on June 14, 2002, at which
meeting the necessary number of shares as required by law and the Restated
Certificate of Incorporation were voted in favor of such amendment.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS whereof, Perma-Fix Environmental Services, Inc. has caused this
Certificate of Amendment to be signed and attested to by its duly authorized
officers as of this 19th day of June, 2002.</p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perma-Fix Environmental Services, Inc.,<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a Delaware corporation
<p><br WP="BR1">
<br WP="BR2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By:
<u>&nbsp;&nbsp;&nbsp;/s/ Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard T. Kelecy,<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice President and Chief Financial&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Officer
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">-2-</p>
<p>&nbsp;</p>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>4
<FILENAME>pnc-amend.htm
<DESCRIPTION>AMENDMENT NO. 1 TO PNC LOAN AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 4.3 - Amendment No. 1 to PNC Loan Agreement</TITLE>
</HEAD>
<BODY TEXT="#000000" LINK="#0000ff" VLINK="#551a8b" ALINK="#ff0000" BGCOLOR="#c0c0c0">

<P ALIGN="CENTER">AMENDMENT NO. 1 </P>

<P ALIGN="CENTER">TO </P>

<P ALIGN="CENTER">REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT </P>

<BR WP="BR2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AMENDMENT NO. 1 ("Amendment") is entered into as of June 10, 2002 by and among
PERMA-FIX ENVIRONMENTAL SERVICES, INC., a corporation organized under the laws of the
State of Delaware ("Borrower,"), PNC BANK, NATIONAL ASSOCIATION ("PNC"), the various other
financial institutions (together with PNC, collectively the "Lenders") named in or which hereafter
become a party to the Loan Agreement (as hereafter defined) and PNC as agent for Lenders (in such
capacity, "Agent") and as Issuing Bank.

<P ALIGN="CENTER"><U>BACKGROUND</U> <U></U></P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower, Agent and Lenders are parties to a Revolving Credit, Term Loan and Security
Agreement dated as of December 22, 2000 (as amended, supplemented or otherwise modified from time
to time, the "Loan Agreement") pursuant to which Lenders provides Borrower with certain financial
accommodations. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested that Lenders amend certain provisions of the Loan Agreement and
Agent, on behalf of Lenders is willing to do so on the terms and conditions hereafter set forth. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or
hereafter made to or for the account of Borrower by Lenders, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows: </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Definitions</U>. All capitalized terms not otherwise defined herein shall have the meanings given
to them in the Loan Agreement. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Amendment to Loan Agreement</U>. Subject to satisfaction of the conditions precedent set forth
in Section 3 below, the Loan Agreement is hereby amended as follows: </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.2 of the Loan Agreement is hereby amended by inserting the following
defined terms in their appropriate alphabetical order: </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Amendment No. 1</U>" shall mean Amendment No. I to Revolving Credit, Term Loan and
Security Agreement dated as of June 10, 2002. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Amendment No. 1 Effective Date</U>" shall mean the date when the conditions of
effectiveness set forth in Section 3 of Amendment No. I have been met to Agent's
satisfaction. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Amortizing Availability</U>" shall mean $4,000,000, less $66,666.67, on the fifteenth day
of each month commencing with July 15, 2002 and reducing to $0 upon the end of  the
Term. In the event (x) any </P>

<P>		&nbsp; </P>

<P>		&nbsp; </P>

<P>		&nbsp; </P>

<P>		Equipment of East Tennessee Materials &amp; Energy Corporation
is sold on or after the Amendment No. I Effective Date, the Amortizing Availability shall
be further reduced by the greater of (i) 75% of the fair market value of such Equipment
or (ii) 45% of the liquidation in place value of such Equipment, in each case as set forth
in the appraisal dated March 2, 2002 conducted by Marshall and Stevens Valuation
Consulting, or (y) the face amount of the Standby UC is reduced by an amendment
thereto, then the Amortizing Availability shall be reduced (but not increased) to the
amended face amount and the monthly amortization amount shall be the quotient
obtained by dividing (1) the amended face amount of the Standby L/C by (2) the number
of months remaining from the date of such reduction until June 15, 2007 (the intent being
that the revised Amortizing Availability would be reduced to $0 by June 15, 2007 in
equal monthly amounts if the Term was extended to such date). </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Revised Article 9</U>" shall mean Revised Article 9 of UCC. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Standby UC</U>" shall mean a standby letter of credit in the original face amount of
$4,000,000, which secures surety bond obligations which Borrower is required to cause
to be issued. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>UCC</U>" shall mean the Uniform Commercial Code as adopted in the State of New York. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.2 of the Loan Agreement is hereby amended by amending the following
defined terms to provide as follows:</P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Collateral</U>" shall mean and include all of the following assets, properties, rights&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and interests of each Credit Party, whether now owned and existing or hereafter&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;arising,
acquired or created, and wherever located:</P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all Receivables;</P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all Equipment;</P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all General Intangibles;</P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;all Inventory; </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;all Investment Property; </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all Real Property and fixtures and improvements, including&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leasehold
Interests; </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all Subsidiary Stock as listed on <U>Schedule 1.2(b)</U>;</P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any and all balances, credits, deposits, accounts or moneys of or in&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
Person's name in the possession or control of, or in transit to,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agent or
any other financial institution (including, without limitation,&nbsp; </P>

<P>			&nbsp; </P>

<P align="center">			2 </P>

<P>			&nbsp; </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all sums on deposit therein from time to time and all
securities,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;instruments and accounts in which such sums are invested
from&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;time to time); </P>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all of such Person's right, title and interest in and to (i) its&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;respective
goods and other property including, but not limited to,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all merchandise
returned or rejected by Customers, relating to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or securing any of the
Receivables; (ii) all of such Person's rights&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as a consignor, a consignee,
an unpaid vendor, mechanic, artisan,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or other lienor, including stoppage
in transit, setoff, detinue,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;replevin, reclamation and repurchase; (iii) all
additional amounts&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;due to such Person from any Customer relating to the
Receivables;&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) other property, including warranty claims, relating to
any&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;goods securing this Agreement; (v) all of such Person's contract&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;rights, rights of payment that have been earned under a contract&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;right,
instruments (including promissory notes), documents, chattel&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;paper
(including electronic chattel paper), warehouse receipts,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;deposit
accounts, letters of credit (whether or not such Person,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as beneficiary,
has demanded or is entitled to demand payment<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or performance thereof),
Investment Property and money; (vi) all&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;commercial tort claims (as
defined under Revised Article 9) (whether&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;now existing or hereafter
arising); (vii) all real and personal&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property of third parties in which such
Person has been granted a&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;lien or security interest as security for the
payment or enforcement&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Receivables; and (viii) any other goods,
personal property or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;real property now owned or hereafter acquired in
which such&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Person has expressly granted a security interest or may in the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;future grant a security interest to Agent hereunder, or in any&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;amendment
or supplement hereto or thereto, or under any other&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;agreement between
Agent and such Person;
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all of such Person's ledger sheets, ledger cards, files, correspondence,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;records, books of account, business papers, computers, computer&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;software (owned by such Person or in which it has an interest),&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;computer
programs, tapes, disks and documents relating to (a), (b),&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c), (d), (e), (f),
(g), (h) or (i) of this Paragraph; and
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all proceeds and products of (a), (b), (c), (d), (c), (f), (g), (h),
(i)&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and j) in
whatever form, including, but not limited to: cash, deposit&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;accounts
(whether or not comprised solely of proceeds),&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;certificates of deposit,
insurance proceeds (including hazard, flood&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and credit insurance),
negotiable instruments and other&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;instruments for the payment of money,
chattel paper, security&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;agreements, documents, eminent domain
proceeds, condemnation&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;proceeds and tort<STRONG> </STRONG>claim proceeds
<p>&nbsp;</p>
<p align="center">3</p>
<p>&nbsp;</p>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>General Intangibles</U>" shall mean and include all of each Credit Party's general&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;intangibles,
whether now owned or hereafter acquired including, without limitation, all&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payment intangibles, all
choses in action, causes of action, corporate or other&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;business records, inventions, designs, patents, patent
applications, equipment&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;formulations, manufacturing procedures, quality control procedures, trademarks,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;trademark applications, service marks, trade secrets, goodwill, copyrights, design
-<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;rights, permits,
software, computer information, source codes, object codes,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;records and dates, registrations, licenses,
franchises, customer lists, tax refunds,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;tax refund claims, computer programs, all claims under guaranties,
security&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;interests or other security held by or granted to Borrower to secure payment of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any of the
Receivables by a Customer (other than to the extent covered by&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables), all other intellectual
property or proprietary rights, all rights of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;indemnification and all other intangible Property of every kind
and nature (other&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;than Receivables). </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Inventory</U>" shall mean and include all of each Credit Party's now owned&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or hereafter acquired
goods, merchandise and other personal property, wherever&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;located, to be furnished under any
consignment arrangement, contract of service&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or held for sale or lease, all raw materials, work in process,
finished goods and&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;materials and supplies of any kind, nature or description which are or might be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;used
or consumed in any Credit Party's business or used in selling or furnishing&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such goods, merchandise and
other personal property, and all documents of title&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or other documents representing them.</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>L/C Commitment</U>" means the commitment of the Issuing Bank to Issue,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and the commitment of
the Lenders severally to participate in, Letters of Credit&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from time to time Issued or outstanding as
provided herein, in an aggregate&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;amount not to exceed on any date the sum of $4,500,000, less any
reduction&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the face amount of the Standby UC; provided that the L/C Commitment&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is part of the
Revolving Commitment Facility, rather than a separate&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;independent commitment.</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Letter of Credit</U>" means any commercial documentary Letter of Credit&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued by the Issuing
Bank pursuant to Section 2.14 as well as the Standby L/C.</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"<U>Receivables</U>" shall mean and include, as to any Credit Party, all of such&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit Party's accounts,
contract rights, instruments (including those evidencing&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;indebtedness owed to such Credit Party by its
Affiliates), documents, chattel&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;paper (including electronic chattel paper), general intangibles relating to
accounts,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;drafts and acceptances, credit card receivables and all other forms of obligations&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;owing to such
Credit Party arising out of or in connection with the sale or lease&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Inventory or the rendition of services
pursuant to term contracts or otherwise&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or the licensing of any general intangible rights, all supporting
obligations,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;guarantees and other security therefor, whether secured or unsecured, now&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;existing or
hereafter created, and whether or not specifically sold or assigned&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to Agent hereunder.</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.3 of the Loan Agreement is hereby amended by inserting the following sentence
at the end thereof to provide as follows: </P>

<P>	&nbsp; </P>

<P align="center">	4 </P>

<P>	&nbsp; </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"To the extent the definition of any category or type of Collateral is&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;expanded by any
amendment, modification or revision to Revised&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 9, such expanded definition will apply
automatically as of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the date of such amendment, modification or revision." </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.2(a)(y) of the Loan Agreement is hereby amended in its entirety to provide as
follows:</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(y) an amount up to the sum (without duplication) of (i) up to 85%&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of Commercial Receivables
aged 60 days or less from invoice date,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) up to 85% of Commercial Broker Receivables aged
up to 90&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;days from the due date, up to 120 days from invoice date, (iii) up&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to 85% of Acceptable
Government Agency Receivables aged 60&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;days or less from the due date, UP to 150 days from
invoice date,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) up to 50% of Acceptable Unbilled Amounts aged 60 days (the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;foregoing
applicable percentages being referred to as the "Advance&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rates") subject, in each case, to clause
(b) of the definition of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Eligible Receivables," and (v) Amortizing Availability, minus (vi)&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such
reserves as Agent may reasonably deem proper and necessary&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from time to time. The amount
determined pursuant to this&nbsp; <U><br>
</U> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Section 2.2(a)(y)</U> at any time and from time to time shall be referred&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to as the "Formula Amount." For purposes of this Section <U>2.2</U>,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reserves shall include all L/C
Obligations from time to time&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;outstanding. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.14(i)(i) of the Loan Agreement is hereby amended by amending the first
sentence thereof in its entirety to provide as follows: </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Borrower shall pay to the Agent for the account of the Lenders a&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;letter of credit fee (x) with
respect to the Letters of Credit (other than&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Standby UC) equal to the rate per annum equal to
three percent&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3%) per annum, and (y) with respect to the Standby L/C equal to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the rate per
annum equal to four percent (4%) per annum, in each&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;case calculated on the average daily
maximum amount available to&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;be drawn of the outstanding Letters of Credit (other than the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standby L/C) with respect to clause (x) and of the Standby L/C&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;with respect to clause (y) (each of
which rates shall be increased&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by 2% per annum at any time when an Event of Default shall have&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;occurred and be continuing), computed on a quarterly basis in&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;arrears on the last Business Day of
each calendar quarter based&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon the applicable Letters of Credit outstanding for that quarter&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as
calculated by Agent, such computation be made on the basis&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of actual days elapsed in a 360-day
year." </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.1 of the Loan Agreement is hereby amended by inserting a new sentence at the
end thereof to provide as follows: </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Borrower shall promptly provide Agent with written notice of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all commercial tort claims, such
notice to contain the case title&nbsp; </P>

<P>	&nbsp; </P>

<P align="center">	5 </P>

<P>	&nbsp; </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;together with the applicable court and a brief description of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;claim(s). Upon delivery each such notice, Borrower shall be&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;deemed to hereby grant to Agent, for
its benefit and for the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ratable benefit of the Lenders, a security interest
and lien in&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and to such
commercial tort claims and all proceeds thereof." </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A new subsection is hereby added to Article 4 at the end thereof to provide as follows: </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"4.22. <U>Filing, of Financing Statements</U>. By its signature hereto,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower ,hereby authorizes
Agent to file against Borrower,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;one or more initial financing, continuation or amendment&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;statements pursuant to the UCC in m and substance&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;satisfactory to Agent that (a) indicate the
Collateral (i) all&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;assets of Borrower or words of similar effect, regardless of&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;whether
any particular
asset comprised in the Collateral falls&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;within the scope of
Revised Article 9, or (ii) as being of an&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;equal or lesser scope or with greater detail, and (b) contain&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any other information required by part
5 of Revised Article 9&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for the sufficiency or filing office acceptance of any
financing&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;statement
or amendment, including (i) whether Borrower is&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an organization, the type of organization and
any organization&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;identification number issued to Borrower, and (ii) in the case&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of a financing
statement filed as a fixture filing or indicating&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Collateral as-extracted collateral or timber to be
cut, a&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sufficient description of real property to which the Collateral&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;relates. </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.2 of the Loan Agreement is hereby amended by inserting the lowing subsection at
the conclusion thereof: </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(c)   Each Credit Party's (i) organizational identification number issued&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by each Credit
Party's state of incorporation or organization or a&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;statement that no such number has been
issued and (ii) federal tax&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;identification number, are listed on Schedule 5.2(c)." </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;			(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7. 1 (a) of the Loan Agreement is hereby amended by inserting the following
sentence at the end thereof: </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without limiting the foregoing, no Credit Party shall reincorporate&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or organize itself
under the laws of any jurisdiction other than the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;laws of state of organization as of the
date hereof without the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prior written consent<STRONG> </STRONG>of Agent." </P>

<P>			&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section I7.1 of the Loan Agreement is hereby amended by deleting the rase "five (5) days"
appearing therein and inserting the phrase "ten (I0) days" in substitution
therefor. </P>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Conditions of Effectiveness</U>. This Amendment shall become effective upon satisfaction of
the following conditions precedent: Agent shall have received (i) four (4) copies of this Amendment
executed by Borrower and consented and agreed to by Guarantors, (ii) four copies of an Amendment No.
I to Secured Subsidiaries Guaranty dated as of the date of this Amendment among Agent and Subsidiary,
(iii) an amendment fee of $50,000 (which fee shall be charged to Borrower's Account), and (iv) such
other
<p>&nbsp;</p>
<p align="center">6</p>
<p>&nbsp;</p>
<p>certificates, instruments, documents, agreements and opinions of counsel as may be required by
Agent or its counsel, each of which shall be in form and substance satisfactory to Agent and its counsel.</p>

<P>	4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations and Warranties</U>. Borrower hereby represents and warrants as follows: </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Amendment and the Loan Agreement, as amended hereby, constitute&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;legal,
valid and binding obligations of Borrower and are enforceable against Borrower&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
accordance with their respective terms. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the effectiveness of this Amendment, Borrower hereby reaffirms&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
covenants, representations and warranties made in the Loan Agreement to the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;extent the
same are not amended hereby and agrees that all such covenants,&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;representations and
warranties shall be deemed to have been remade as of the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;effective date of this
Amendment, except that such representations and warranties&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shall be qualified by the
matters set forth on Schedule A attached hereto and made&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a part hereof </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Event of Default or Default has occurred and is continuing or&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;would exist after
giving effect to this Amendment. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower has no defense, counterclaim or offset with respect to the&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan
Agreement. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower is incorporated in the State of Delaware. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Effect on the Loan Agreement</U>. <U></U></P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the effectiveness of Section 2 hereof, each reference in the Loan Agreement
to "this Agreement," "hereunder," "hereof," "herein" or words of like import shall mean
and be a reference to the Loan Agreement as amended hereby. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as specifically amended herein, the Loan Agreement, and all other
documents, instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified and confirmed. </P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of Agent or any Lender, nor constitute a waiver of
any provision of the Loan Agreement, or any other documents, instruments or
agreements executed and/or delivered under or in connection therewith. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing Law</U>. This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and shall be governed by and construed in accordance
with the laws of the State of New York.</P>

<P>	&nbsp;</P>

<P align="center">	7</P>

<P>	&nbsp;</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Headings</U>. Section headings in this Amendment are included herein for convenience of
reference only and shall not constitute a part of this Amendment for any other purpose. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Counterparts</U>. This Amendment may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which when taken together shall
constitute one and the same agreement. </P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, this Amendment has been duty executed as of the day and year first <STRONG>
</STRONG>written above. </P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PERMA-FIX ENVIRONMENTAL SERVICES, INC.</P>

<BR WP="BR1"><BR WP="BR2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By:
<u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PNC BANK, NATIONAL ASSOCIATION, as<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agent and Lender</P>

<BR WP="BR1"><BR WP="BR2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By:
<u>&nbsp;&nbsp;&nbsp;/s/Susanne Raschner&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Susanne Raschner<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P ALIGN="CENTER"><STRONG>(SIGNATURES CONTINUED ON FOLLOWING PAGE)</STRONG></P>

&nbsp;
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">8</p>
<p>&nbsp;</p>
<P>CONSENTED AND AGREED TO:</P>

<P>SCHREIBER, YONLEY AND ASSOCIATES, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>PERMA-FIX TREATMENT SERVICES, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>PERMA-FIX, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<p>

<BR WP="BR1">PERMA-FIX OF NEW MEXICO, INC.
<p>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<p>PERMA-FIX OF FLORIDA, INC.
<p>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>PERMA-FIX OF MEMPHIS, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">9</p>
<p>&nbsp;</p>
<P>PERMA-FIX OF DAYTON, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<p>PERMA-FIX OF FT. LAUDERDALE, INC.
<p>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President

<P>PERMA-FIX OF ORLANDO, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<p>PERMA-FIX OF SOUTH GEORGIA, INC.
<p>

<BR WP="BR1">By: <u>&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>PERMA-FIX OF MICHIGAN, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>DIVERSIFIED SCIENTIFIC SERVICES, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">10</p>
<p>&nbsp;</p>
<P>INDUSTRIAL WASTE MANAGEMENT, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>MINTECH, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>RECLAMATION SYSTEMS, INC.</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<P>EAST TENNESSEE MATERIALS &amp; ENERGY CORPORATION</P>

<BR WP="BR1">By: <u>&nbsp;&nbsp;&nbsp;/s/Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:	Richard T. Kelecy<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:	Vice President
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">11</p>
<p>&nbsp;</p>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>lfc-cert.htm
<DESCRIPTION>CEO CERTIFICATION
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 99.1 - CEO Certification</TITLE>
</HEAD>
<BODY TEXT="#000000" LINK="#0000ff" VLINK="#551a8b" ALINK="#ff0000" BGCOLOR="#c0c0c0">

<P><CENTER>CERTIFICATION PURSUANT TO<br>
18 U.S.C. SECTION 1350,<br>
AS ADOPTED PURSUANT TO<br>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</CENTER>
</P>

<BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of Perma-Fix Environmental Services, Inc. ("PESI")
on Form 10-Q for the period ending June 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Louis F. Centofanti, President and Chief Executive
Officer of PESI, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;the Report fully complies with the requirements of Section 13(a)&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or 15(d) of the Securities Exchange Act of 1934; and</P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;the information contained in the Report fairly presents, in all&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;material respects, the financial condition and results of operations of
PESI.</P>

<P><br>
<br>
<br>
<br>
<u>&nbsp;&nbsp;&nbsp;&nbsp;/s/ Louis Centofanti&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>Louis F. Centofanti<br>
President and<br>
Chief Executive Officer</P>

<P>August 14, 2002</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This certification is made solely for purpose of 18
U.S.C. Section 1350 subject to the knowledge
standard contained therein, and not for any other purpose.</P>

<P>	&nbsp;</P>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>6
<FILENAME>rtk-cert.htm
<DESCRIPTION>CFO CERTIFICATION
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 99.2 - CFO Certification</TITLE>
</HEAD>
<BODY TEXT="#000000" LINK="#0000ff" VLINK="#551a8b" ALINK="#ff0000" BGCOLOR="#c0c0c0">

<P><CENTER>CERTIFICATION PURSUANT TO<br>
18 U.S.C. SECTION 1350,<br>
AS ADOPTED PURSUANT TO<br>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</CENTER>
</P>

<BR WP="BR1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the Quarterly Report of Perma-Fix Environmental Services, Inc. ("PESI")
on Form 10-Q for the period ending June 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Richard T. Kelecy, Chief Financial Officer of
PESI, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act
of 2002, that:
<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;the Report fully complies with the requirements of Section 13(a)&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or 15(d) of the Securities Exchange Act of 1934; and</P>

<P>		&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;the information contained in the Report fairly presents, in all&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;material respects, the financial condition and results of operations of
PESI.</P>

<P>&nbsp;</P>

<P><u>&nbsp;&nbsp;&nbsp;/s/ Richard T. Kelecy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
Richard T. Kelecy<br>
Chief Financial Officer</P>

<P>August 14, 2002</P>

<P>	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This certification is made solely for purpose of 18
U.S.C. Section 1350 subject to the knowledge
standard contained therein, and not for any other purpose.</P>

<P>	&nbsp;</P>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
</SUBMISSION>
