PROMISSORY
NOTE

    


    
      	
              $3,000,000.00

            	
              May
      8, 2009

            


    

    


    FOR VALUE RECEIVED, the undersigned
PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware corporation (“Borrower”)
promises to pay to the order of WILLIAM N. LAMPSON, an individual (“Lampson”),
and DIEHL RETTIG, an individual (“Rettig”) (Lampson and Rettig are collectively,
the “Lenders”), for the account of the Lenders as directed by the Lenders in
writing to the Borrower at KeyBank National Association (“KeyBank”), located at
23 W. Kennewick Avenue, Kennewick, Washington 99336, or at such other place as
may be designated in writing by the Lenders, the principal sum of THREE MILLION
AND 00/100 DOLLARS ($3,000,000.00), together with interest thereon at the
interest rates hereinafter stated, payable as set forth below.

    


    Unless otherwise defined herein, all
terms defined or referenced in that certain Loan and Securities Purchase
Agreement of even date herewith between the Borrower and the Lenders (the “Loan
Agreement”) will have the same meanings herein as therein.

     

    Interest on this Note will be paid at
the interest rate equal to the Libor Rate plus four and one-half percent (4.5%)
per annum, adjusted on each date on which a change in the LIBOR Rate occurs (the
“Interest Rate”).  “LIBOR Rate” means the rate per annum calculated by
the Lenders in good faith, which Lenders determine with reference to the rate
per annum (rounded to the next higher whole multiple of 1/16% if such rate is
not such a multiple) at which deposits in United States dollars are offered by
prime banks in the London interbank Eurodollar market two Business Days prior to
the day on which such rate is calculated by KeyBank, based on a 30 day maturity;
provided, however, that LIBOR Rate shall in no event be less than one and
one-half percent (1.50%).  On the date the Note is signed by Borrower
and continuing until the end of such month, the LIBOR Rate shall be the LIBOR
Rate determined by the Lenders on the first day of such month, or if the first
day of such month is not a Business Day, then as determined by the Lenders on
the Business Day immediately preceding the first day of such month, effective as
of the first day of such month; thereafter, the LIBOR Rate shall be adjusted by
the Lenders on the first day of each succeeding month, or if the first day of
the month is not a Business Day, then as determined by Lenders on the Business
Day immediately preceding the first day of the month, effective as of the first
day of the month.  “Business Day” means a day of the year on which
banks are not required or authorized to close in Cleveland, Ohio, and, if the
applicable Business Day relates to determination of the LIBOR Rate, a day on
which dealings are carried on in the London interbank Eurodollar
market.

     

    Commencing
on June 8, 2009, and on the 8th day of each month thereafter, PESI shall pay to
the Lenders equal successive payments of principal in the amount of $87,391.31,
plus interest accrued on the outstanding principal balance of the
Note.  The entire unpaid principal balance of the Note and all accrued
interest thereon is due and payable on May 8, 2011 (the “Maturity
Date”).


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    This Note is executed and delivered in
connection with, and subject to the terms and conditions contained in, the Loan
Agreement.  It is specifically agreed that the entire principal amount
of this Note has been advanced as of the date hereof, and that no additional
advances will be made hereunder.  All payments will first be applied
to the payment of accrued interest and the balance will be applied in reduction
of the principal balance hereof.

    


    The Borrower will have the right to
prepay this Note in whole or in part at any time and from time to time without
premium or penalty, but with interest accrued to the date of
prepayment.

    


    The Borrower agrees that if the
Borrower is in default in its payment obligations under the terms of this Note
if, as a result, this Note is placed in the hands of an attorney for collection
or to defend or enforce any of the Lender’s rights hereunder, the Borrower will
pay the Lender’s reasonable attorneys’ fees and expenses, all court costs and
all other reasonable expenses incurred by the Lenders in connection therewith;
provided that the Lenders are represented by a single attorney or law
firm.

    


    This Note is to be construed according
to the internal laws of the State of Delaware, expect with respect to usury
laws, the usury laws of the State of Washington will govern.

    


    On the failure to pay any principal or
interest within 30 days when due hereunder, the Lenders will have the option to
declare this Note and any renewals, extensions or modifications hereof to be
immediately due and payable whereupon this Note or any renewals or modifications
thereof shall become forthwith due and payable upon written demand, and the
Lenders will thereafter have the right to elect by written election delivered to
Borrower to receive in full and complete satisfaction of all Borrower’s
obligations under this Note either:

    


    
      	
               
      

            	
              (a)

            	
              the
      cash amount equal to the sum of the unpaid principal balance owing under
      the Note and all accrued and unpaid interest thereon (the “Payoff
      Amount”); or

            


    

    


    
      	
               
      

            	
              (b)

            	
              the
      number of whole shares of the common stock, par value $.001 per share, of
      the Borrower (the “Payoff Shares”) determined by dividing the Payoff
      Amount by the dollar amount equal to the closing bid price of the
      Borrower’s common stock on of the date immediately prior to the date of
      Default of this Note as reported or quoted on the primary nationally
      recognized exchange or automated quotation system on which the common
      stock is listed.

            


    

    


    The Lenders option to elect the Payoff
Amount or the Payoff Shares is mutually exclusive, and the Lenders may not elect
a combination of the Payoff Amount and the Payoff Shares.  If the
Lenders elect to receive the Payoff Shares, the issuance of the Payoff Shares
will be subject to the Lenders providing, as of the issuance of the Payoff
Shares, substantially the same representations and warranties as set forth in
paragraph 7 of the Purchase Agreement.  If issued, the Payoff Shares
will not be registered, and the Lenders will not be entitled to registration
rights with respect to the Payoff Shares.  Notwithstanding any other
provision of this Note, the aggregate number of Payoff Shares that will be
issued to the Lenders will be subject to the restrictions, qualifications, and
limitations set forth in the Purchase Agreement, including without limitation,
compliance with federal and state securities laws, the percentage of the Payoff
Shares to be issued to each Lender, and the limitations on the maximum number of
Payoff Shares to be issued to the Lenders.


    
      
         


      

      
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    IN WITNESS WHEREOF, the Borrower has
executed this instrument effective the date first above written.

    


    
      
        
          	
                  PERMA-FIX
      ENVIRONMENTAL SERVICES,

                  INC.,
      a Delaware corporation

                
	 
      
	
                  By:

                	
                    /s/Louis
  Centofanti

                
	
                  Name:

                	
                    Louis Centofanti

                
	
                  Title

                	
                    CEO

                
	 
      	 
      
	
                  (the
      “Borrower”)

                


        

      

    


    
      
         


      

      
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