Exhibit 10.2





Exhibit 10.2






THIS NOTE AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, (THE “ACT”) OR ANY STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.



NON-NEGOTIABLE

PROMISSORY NOTE




			
	 	 	 
	$2,500,000.00
	 	                    , 2011






FOR VALUE RECEIVED, the undersigned PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware
corporation (“PESI”), promises to pay to the order of HOMELAND SECURITY CAPITAL CORPORATION, a
Delaware corporation (“Homeland”), having a notice address at 1005 North Glebe Road, Suite 550,
Arlington, Virginia 22201, or at such other place as may be designated in writing by Homeland, the
principal sum of TWO MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($2,500,000.00), together
with interest thereon at the annual interest rate hereinafter stated, payable as set forth below.



Unless otherwise defined herein, all terms defined or referenced in that certain Stock
Purchase Agreement of even date herewith (the “Purchase Agreement”) between PESI, Homeland and
Safety & Ecology Holdings Corporation, will have the same meanings herein as therein.



1. Until paid in full in accordance with the terms hereof, interest on this Note shall accrue
from the date hereof at the Interest Rate (calculated on the basis of a 360-day year consisting of
twelve 30 day months). For purposes of this Note, the Interest Rate shall mean six percent (6.0%)
per annum, except upon the occurrence of an Event of Default (as defined herein), in which case,
during the period from the date of such Event of Default until the earlier of (i) the date such
Event of Default is cured or (ii) the date on which such payment is made as set forth herein, the
Interest Rate shall mean twelve percent (12.0%) per annum. Notwithstanding any other provision of
this Note, Homeland does not intend to charge, and PESI shall not be required to pay, any interest
or other fees or charges in excess of the maximum interest permitted by applicable law; any
payments in excess of such maximum shall be refunded to PESI or credited to reduce principal
hereunder. The principal and accrued interest due thereon shall be payable over a three (3) year
period in thirty-six (36) monthly installments of principal and interest, with the first monthly
installment of $76,054.84 in principal and interest due and payable on                     , 2011, and a like
installment due and payable on the 15th day of each month thereafter for 34 months, and
the remaining unpaid principal balance of this Note and all accrued interest thereon due and
payable on                     , 2014 (the “Maturity Date”).


 


 









 





2. This Note is executed and delivered in connection with, and subject to the terms and
conditions contained in, the Purchase 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. Subject to the provisions of Section 4, all payments will first
be applied to the payment of accrued interest, and the remainder will be applied in reduction of
the principal balance hereof. Payments of principal and interest on this Note shall be made by
wire transfer of immediately available funds to an account designated by Homeland in Exhibit A
attached hereto, which may be changed by Homeland in writing from time to time.



3. PESI 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.



4. PESI agrees that, upon an occurrence of an Event of Default (as defined below), and, as a
result, this Note is placed in the hands of an attorney for collection or to defend or enforce any
of Homeland’s rights hereunder, PESI will pay, subject to the terms hereof, Homeland’s reasonable
attorneys’ fees and expenses and all other reasonable expenses incurred by Homeland in connection
therewith, provided that Homeland is represented by a single attorney or law firm, as determined by
a court of competent jurisdiction or as agreed to by PESI and the Parent (the “Expenses”).



5. The payment and performance of this Note is unsecured. This Note is non-negotiable, and
neither this Note nor the right to receive the payments due and to become due under this Note may
be sold, transferred or assigned by Homeland without the prior written consent of PESI which may be
withheld by PESI in PESI’s sole discretion. This Note is subject to PESI’s right to offset
payments hereunder as a result of any Claim that PESI or PESI Indemnitees may have against Homeland
in accordance with Article VIII of the Purchase Agreement, pursuant to Section 9.3 of the Purchase
Agreement.



6. Upon the occurrence of an Event of Default (as defined below), Homeland will have the
option to declare this Note in default and to be immediately due and payable, whereupon this Note
shall become forthwith due and payable upon such written demand received by PESI (“Written Demand
Notice”), and Homeland will thereafter have the right, at its option and in its sole discretion, by
written election delivered to PESI to receive in full and complete satisfaction of all PESI’s
obligations under this Note, either:




	 	a.	 	the cash amount equal to the sum of the unpaid principal
balance owing under this Note and all accrued and unpaid interest thereon, plus
the Expenses (the “Payoff Amount”);







	 	b.	 	the number of fully paid and non-assessable shares of the
common stock, par value $.001 per share, of PESI (the “PESI Common Stock”)
equal to the quotient determined by dividing the Payoff Amount by the average
of the closing prices per share of the PESI Common Stock as reported by the
primary national securities exchange or automatic quotation system on which
PESI Common Stock is traded during the 30 consecutive trading day period ending
on the trading day immediately prior to receipt by PESI of the Written Demand
Notice delivered in accordance with Section 9.4 of
the Purchase Agreement (the “Payoff Shares”); provided, however, that the
number of Payoff Shares plus the number of shares of PESI Common Stock
issued or to be issued to the Management Investors pursuant to Section 5.21
of the Purchase Agreement shall not exceed 19.9% of the voting power of all
of PESI voting securities issued and outstanding as of the date of the
Purchase Agreement; or




 


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	 	c.	 	any combination of the Payoff Amount or the Payoff Shares,
provided, however, that the aggregate amount of the Payoff Amount and the
Payoff Shares shall not exceed the unpaid principal balance and accrued
interest due under this Note as of receipt by PESI of the Written Demand
Notice, with the number of Payoff Shares to be determined by dividing the
amount of the Payoff Amount which is to be paid in Payoff Shares by the average
of the closing prices per share of the PESI Common Stock as reported by the
primary national securities exchange or automatic quotation system on which
PESI Common Stock is traded during the thirty (30) consecutive trading day
period ending on the trading day immediately prior to receipt by PESI of the
Written Demand Notice and Homeland’s written election to receive a portion of
the Payoff Amount in Payoff Shares, with such notice to specify the amount of
the Payoff Amount to be paid in Payoff Shares.






7. If Homeland elects to receive Payoff Shares, (i) the issuance of the Payoff Shares will be
subject to Homeland providing in writing to PESI within three Business Days prior to the issuance
of the Payoff Shares, substantially the same representations, warranties and covenants as set forth
in Exhibit C attached to the Purchase Agreement and (ii) Homeland shall not, at anytime or for any
reason, assign, transfer or convey the Payoff Shares or any portion thereof, if issued by PESI to
Homeland, to Yorkville. If issued, the Payoff Shares will not be registered, and Homeland will not
be entitled to registration rights with respect to the Payoff Shares, except for those certain
Piggyback Registration Rights set forth in the Registration Rights Agreement attached as Exhibit D
to the Purchase Agreement, which PESI and Homeland shall execute immediately prior to the issuance
of the Payoff Shares. The Payoff Shares issued to Homeland pursuant to this Note, if any, will be
restricted securities and subject to the restrictions, qualifications, and limitations set forth in
the Purchase Agreement, Exhibits C and D of the Purchase Agreement, and this Note, including
without limitation, compliance with federal and state securities laws and the limitations on the
maximum number of Payoff Shares to be issued to Homeland set forth in Section 6(b) hereof.



8. Events of Default. Notwithstanding any provision of this Note to the contrary,
subject to the terms hereof and the Purchase Agreement, the outstanding principal and accrued
interest under this Note shall become due and payable, without notice or demand, upon the happening
of any one of the following specified events (each, an “Event of Default”):




	 	a.	 	PESI fails to pay any installment of principal and interest due
hereunder within 30 days of when due; or




 


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	 	b.	 	Any legal proceeding is commenced by or against PESI seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of its structure or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking
appointment of a receiver, trustee, custodian or other similar official for
PESI or for all or substantially all of PESI’s property, or shall take any
such action to authorize any of the foregoing, and such case or proceeding
(x) results in the entry of an order for relief against it which is not
stayed within twenty (20) Business Days after the entry thereof or (y) is
not dismissed within sixty (60) days of commencement; or







	 	c.	 	Change in Control (as defined below) of PESI. For the purposes
of this Note, a “Change in Control” shall mean any of the following:







	 	i.	 	consummation of a transaction in which
any person, entity, corporation, or group (as such terms are defined
in sections 13 (d)(3) and 14 (d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) (other than PESI, or a
profit sharing, employee ownership or other employee benefit plan
sponsored by PESI or any subsidiary of PESI) has purchased PESI’s
voting securities for cash, securities or other consideration
pursuant to a tender offer, or has become the “beneficial owner” (as
such term is defined in Rule 13d-3 under the Exchange Act (in one
transaction or a series of transactions), of securities of PESI
representing more than 50% of the total voting power of the then
outstanding securities of PESI ordinarily having the right to vote
in the election of directors; or

	 
	 	ii.	 	a change, without approval of at least a
majority of the Board of Directors then in office, of a majority of
PESI’s Board of Directors; or

	 
	 	iii.	 	consummation by PESI of PESI selling all
or substantially all of PESI’s assets to a purchaser which is not a
subsidiary of PESI; or

	 
	 	iv.	 	PESI shareholders’ approval of a plan of
dissolution or liquidation of PESI; or

	 
	 	v.	 	PESI’s consummation of a merger or
consolidation, in which PESI or a subsidiary of PESI is not the
surviving corporation, and immediately following such merger or
consolidation less than fifty percent (50%) of the surviving
corporation’s outstanding voting stock is held by persons who are
stockholders of PESI immediately prior to such merger or
consolidation.






9. All notices required or permitted hereunder shall be in writing and shall be deemed
effectively given if given in accordance with the notice provisions in the Purchase Agreement,
unless otherwise agreed to by the parties. In addition any notice otherwise required or permitted
hereunder, PESI shall give Homeland written notice not less than ten (10) days prior to the
consummation of any Change in Control.


 


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10. PESI hereby expressly waives presentment, demand, and protest, notice of demand, dishonor
and nonpayment of this Note, and all other notices or demands of any kind in connection with the
delivery, acceptance, performance, default or enforcement hereof, and hereby consents to any
delays, extensions of time, renewals, waivers or modifications that may be granted or consented to
by Homeland hereof with respect to the time of payment or any other provision hereof.



11. The rights and remedies of Homeland under this Note shall be cumulative. It is agreed
that no delay or omission to exercise any right, power or remedy accruing to Homeland upon any
breach or default of PESI under this Note shall impair any such right, power or remedy, nor shall
it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of or
in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or thereafter occurring.



12. In the event any one or more of the provisions of this Note shall for any reason be held
to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event
that any one or more of the provisions of this Note operate or would prospectively operate to
invalidate this Note, then and in any such event, such provision(s) only shall be deemed null and
void and shall not affect any other provision of this Note and the remaining provisions of this
Note shall remain operative and in full force and effect and in no way shall be affected,
prejudiced, or disturbed thereby.



13. This Note shall be governed by and construed and enforced in accordance with the laws of
The State of Delaware, without regard to its conflicts of laws provisions. The parties irrevocably
and unconditionally submit to the exclusive jurisdiction of the courts sitting in the State of
Delaware over any suit, action or proceeding arising out of or relating to this Note. The parties
irrevocably and unconditionally waive any objection to the laying of venue of any such suit, action
or proceeding brought in such court and any claim that any such suit, action or proceeding brought
in such court has been brought in an inconvenient forum. The parties agree that a final judgment
in any such suit, action or proceeding brought in such court shall be conclusive and binding upon
the parties and may be enforced in any other courts to whose jurisdiction other parties are or may
be subject, by suit upon such judgment.



14. Jury Trial Waiver. PESI HEREBY KNOWINGLY AND VOLUNTARILY IRREVOCABLY WAIVES TRIAL
BY JURY AND THE RIGHT THERETO IN ANY ACTION OR PROCEEDING OF ANY KIND, ARISING UNDER OR OUT OF, OR
OTHERWISE RELATED TO, THIS NOTE. PESI FURTHER ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO
REVIEW THIS NOTE WITH ITS COUNSEL AND THAT IT ON ITS OWN HAS MADE THE DETERMINATION TO EXECUTE THIS
NOTE AFTER CONSIDERATION OF ALL OF THE TERMS OF THIS NOTE AND OF ALL OTHER FACTORS WHICH IT
CONSIDERS RELEVANT.


 


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



	 	 	 	 	 
	 	PERMA-FIX ENVIRONMENTAL SERVICES, INC.,
 a Delaware
corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




 


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