Document:

Summary of Loan Agreement
Entered into by and between Shenzhen BAK Battery Co., Ltd. (“the Company”) and
Longgang Branch, Shenzhen Development Bank Co., Ltd (the “Creditor”) on March
9th, 2009

    

    Main
contents:

    
      	
              Ø

            	
              Contract
      number: Shenfa Longgang Daizi
20090309001;

            

    

    
      	
              Ø

            	
              Main
      Contract: Comprehensive Credit Facility
  Agreement;

            

    

    
      	
              Ø

            	
              Main
      Contract number: Shenfa Longgang Zongzi
  20081203001;

            

    

    
      	
              Ø

            	
              Loan
      principal: RMB20 million;

            

    

    
      	
              Ø

            	
              Loan
      term: from March 9th,
      2009 to March 9th
      , 2010;

            

    

    
      	
              Ø

            	
              Floating
      interest rate: Interest rate of loan shall be the benchmark rate announced
      by the People’s Bank of China, and be adjusted every
      3 months;

            

    

    
      	
               
      

            	
              n

            	
              Interest
      accrued and settled per month, interest settlement day is the 20th day
      of each month;

            

    

    
      	
               
      

            	
              n

            	
              Penalty
      interest rate for delayed repayment: current interest rate plus 50%
      * current interest rate;

            

    

    
      	
               
      

            	
              n

            	
              Penalty
      interest rate for embezzlement of loan proceeds: current interest rate
      *1;

            

    

    
      	
              Ø

            	
              Purpose
      of the loan is to provide working capital for the
      Company;

            

    

    
      	
              Ø

            	
              If
      any of the following occurs, the Creditor is entitled to demand prepayment
      of loan principal and interest before maturity and cancel all loans
      unprovided ;

            

    

    
      	
            	
              n

            	
              The Company
      terminates operation or is stopped from
  operation;

            

    

    
      	
            	
              n

            	
              The
      Company provides untrue documents or hide important  financial
      information about its operation;

            

    

    
      	
            	
              n

            	
              The
      Company intentionally evades bank debts by way of related party
      transaction or other means;

            

    

    
      	
            	
              n

            	
              The
      Company uses loan proceeds for purposes other than what is agreed without
      the consent of the Creditor;

            

    

    
      	
            	
              n

            	
              Occurrence
      of other instances which endangers or may endanger the  safety of the
      loan provided by the Creditor;

            

    

    

    Headlines
of the articles omitted:

    
      	
              Ø

            	
              Interest
      clearing of the loan

            

    

    
      	
              Ø

            	
              Payment
      of the loan

            

    

    
      	
              Ø

            	
              Rights
      and obligation of the Company

            

    

    
      	
              Ø

            	
              Rights
      and obligations of the Creditor

            

    

    
      	
              Ø

            	
              Disputation
      settlement and Validity

            

    

    
      	
              Ø

            	
              Fees

            

    

    
      	
              Ø

            	
              Breach
      of contract penalties

            

    

    
      	
              Ø

            	
              Announcement
      and Guaranty of the Company

            

    

    
      	
              Ø

            	
              Others

            

    

    
      	
              Ø

            	
              TextLOAN AND SECURITIES PURCHASE
AGREEMENT

    

    THIS LOAN
AND SECURITIES PURCHASE AGREEMENT (this “Agreement”) is entered into on this 8th
day of May 2009, between PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware
corporation (“PESI”), having a notice address of 8302 Dunwoody Place #250,
Atlanta, Georgia 30350, and WILLIAM N. LAMPSON, an individual (“Lampson”),
residing at 8308 Sunset Lane, Pasco, Washington; and DIEHL RETTIG, an individual
(“Rettig”), residing at 12522 Eagle Reach Ct., Pasco, Washington 99301 (Lampson
and Rettig are individually called “Lender” and collectively called the
“Lenders”).

    

    WITNESSETH

    

    WHEREAS, the Lenders desire to lend to
PESI, and PESI desires to borrow from the Lender, the sum of $3,000,000 pursuant
to the terms and conditions set forth in this Agreement, and, in consideration
thereof, the Lenders desire to acquire and PESI agrees to issue to the Lenders
certain shares of PESI common stock and warrants to acquire PESI common stock,
par value $.001 per share, on the terms and conditions set forth
herein;

    

    WHEREAS, Lampson was a principal
shareholder and director of Nuvotec USA. Inc., k/n/a Perma-Fix Northwest, Inc.
(“Nuvotec”) at the time of PESI’s acquisition of Nuvotec in June 2007, and
Rettig was a shareholder of, and counsel for, Nuvotec at such time, and as
shareholders of Nuvotec and being accredited investors, as defined in Rule 501
promulgated under the Securities Act of 1933, as amended (the “Act”): (a)
received their proportionate share of cash and PESI common stock in such
acquisition, (b) are currently entitled to receive certain contingent
consideration under the terms of the acquisition, and (c) are entitled to their
respective proportionate share of a $2.5 million promissory note payable by PESI
to the former shareholders of Nuvotec; and

    

    WHEREAS, each of the Lenders has been
previously furnished copies of the PESI’s SEC filings (as defined
below).

    

    NOW
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged the parties agree as follows.

    

    1.           Lending
Agreement.  Subject to the terms and conditions hereinafter set
forth, the Lenders, jointly and severally, agree to lend to PESI, and PESI
agrees to borrow from the Lenders, a sum of THREE MILLION DOLLARS
($3,000,000.00) (the “Loan”), as evidenced by the Note (as defined
below).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.           Promissory
Note.  The Loan shall be evidenced by a Promissory Note of even
date herewith in the principal amount of THREE MILLION DOLLARS ($3,000,000.00),
in substantially the form and substance as set forth in Exhibit “A” to this
Agreement (the “Note”).  The Note will bear interest on the unpaid
principal thereof at a 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.  “LIBOR Rate” means the rate per annum calculated by the
Lenders in good faith, which the 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 National Association based
on a 30 day maturity; provided, however, that the 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 the 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”).

    

    
      	
               
      

            	
              2.1

            	
              Purpose.  The
      funds advanced under the Note will be used by the PESI, as
      follows:

            

    

    

    
      	
               
      

            	
              (a)

            	
              first,
      to fund the payment of the unpaid principal balance and interest thereon
      owing by East Tennessee Materials & Energy Corporation, a subsidiary
      of PESI (“M&EC”), to
      Performance Development Corporation (“PDC”), under that certain the
      Promissory Note, dated June 25, 2001, as amended by the First Amendment to
      Promissory Note, dated December 29, 2008, for monies advanced to M&EC
      by PDC and certain services performed by PDC on behalf of M&EC prior
      to PESI’s acquisition of M&EC in June 2007;
  and

            

    

    

    
      	
               
      

            	
              (b)

            	
              second,
      after payment of the amount due under 2.1(a) above, the balance, if any,
      in connection with working capital purposes in the ordinary course of
      PESI’ business.

            

    

    

    
      	
               
      

            	
              2.2

            	
              Prepayment.  PESI
      may prepay the Note at any time, without premium or
      penalty.  Prepayments will not reduce the amount of the regular
      annual payment of principal due under the
Note.

            

    

    

    3.           Recourse.  The
Note will be full recourse to PESI, but the payment of the Note and the
obligations of PESI in this Agreement will otherwise be
unsecured.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    4.           Issuance of Shares and
Warrants.  In consideration of the Loan and in reliance on the
representations, warranties, and covenants of the Lenders set forth in this
Agreement, within five days following the Closing Date (as defined below), PESI
will issue to Lampson and Rettig (a) an aggregate of 200,000 shares (the
“Shares”) of the common stock, par value $.001 per share, of PESI, with Lampson
receiving 180,000 shares and Rettig receiving 20,000 shares; and
(b) warrants to purchase up to 150,000 shares of  PESI common
stock (the “Warrant Shares”) at the exercise price of $1.50 per share, with
Lampson receiving a warrant to purchase up to 135,000 shares and Rettig
receiving a warrant to purchase up to 15,000 shares (the
“Warrants”).  The Warrants may be exercised during the period
beginning six months from the date of issuance and ending two years from the
date of issuance.  The Warrants will be substantially in the form
attached as Exhibits “B” and “C” to this Agreement.

    

    5.           Closing Date; Conditions
Precedent.  The Lenders shall, jointly and severally, fund the
full amount of the Note as soon as all of the conditions precedent set forth at
paragraph 5.1 through 5.3 hereof have been satisfied (the “Closing
Date”):

    

    
      	
               
      

            	
              5.1

            	
              Authority.  This
      Agreement, the Note, and issuance of the Shares, the Warrants, and the
      Warrant Shares shall have been duly reviewed and approved by the Audit
      Committee of the Board of Directors and authorized by the entire Board of
      Directors of PESI;

            

    

    

    
      	
               
      

            	
              5.2

            	
              Stock Quotation or
      Listing.  There will be no action or proceeding pending
      or threatened against PESI by the Nasdaq to prohibit or terminate the
      quotation of PESI common stock, or the trading thereof on The Nasdaq
      Capital Market;

            

    

    

    
      	
               
      

            	
              5.3

            	
              PNC
      Approval.  PESI’s lender, PNC Bank, n.a., shall have
      provided the necessary written approvals to allow the Loan on terms
      satisfactory to PESI.

            

    

    

    6.           Representations and
Warranties of PESI.  PESI represents and warrants to the
Lenders that:

    

    
      	
               
      

            	
              6.1

            	
              Reporting
      Company.  PESI is subject to the reporting requirements
      of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”).  Since January 1, 2009, PESI has
      filed with the SEC all reports required to be filed under the Exchange Act
      and PESI is and, as of the time Closing Date will be, current in its
      reporting obligations under the Exchange
Act.

            

    

    

    
      	
               
      

            	
              6.2

            	
              Material
      Changes.  To PESI’s knowledge, no material event has
      occurred or exists with respect to PESI that is required to be disclosed
      under the securities laws and that has not been disclosed by PESI under
      applicable securities laws or which has not been publicly announced as of
      the date hereof or disclosed to the Lenders and which has or would have a
      Material Adverse Effect (as defined in paragraph 11.4) on PESI and its subsidiaries, taken as a
      whole.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              6.3

            	
              Power and
      Authority.  PESI has the necessary corporate authority
      and right to enter into and carry out the provisions of this Agreement and
      other documents contemplated herein and to consummate the transactions
      contemplated hereby.

            

    

    

    
      	
               
      

            	
              6.4

            	
              Litigation.  There
      is no action, suit, proceeding or investigation pending, threatened
      against on PESI, which, if adversely determined, would have a Material
      Adverse Effect on PESI and its subsidiaries, taken as a
    whole.

            

    

    

    
      	
               
      

            	
              6.5

            	
              No
      Default.  The making and performance by PESI of this
      Agreement or the documents to be executed in connection herewith will not
      violate any provision or constitute a default under any indenture,
      agreement or instrument to which PESI is bound or affected, the effect of
      which would result in a Material Adverse Effect on PESI and its
      subsidiaries, taken as a whole, except as disclosed in PESI’s SEC Filings
      or disclosed in Schedule 6.5
hereof.

            

    

    

    
      	
               
      

            	
              6.6

            	
              Enforceability.  Each
      of the this Agreement, the Note, and the Warrants constitute the valid and
      legally binding obligations of PESI enforceable against PESI in accordance
      with their respective terms, except as may be limited by bankruptcy,
      insolvency, reorganization or other similar laws affecting the enforcement
      of creditor’s rights generally and by general principals of
      equity.

            

    

    

    7.           Investor Representations and
Warranties.  Each of the Lenders hereby acknowledges,
represents, warrants, and covenants, jointly and severally, to PESI as
follows:

    

    
      	
               
      

            	
              7.1

            	
              Investment
      Intent.  Each Lender is acquiring the Shares and Warrants
      for his own account as principal, not as a nominee or agent, for
      investment purposes only, and not with a view to, or for, resale,
      distribution or fractionalization thereof in whole or in part and no other
      person has a direct or indirect beneficial interest in such Shares and
      Warrants.  The Lenders do not have any contract, undertaking,
      agreement or arrangement with any person to sell, transfer or grant
      participation to such person or to any third person, with respect to any
      of the Shares and Warrants for which the Lenders is
      subscribing;

            

    

    

    
      	
               
      

            	
              7.2

            	
              Authority.  Each
      Lender has full power and authority to enter into this Agreement, and this
      Agreement constitutes a valid and legally binding obligation of the
      Lenders;

            

    

    

    
      	
               
      

            	
              7.3

            	
              SEC
      Filings.  PESI has previously furnished each of the
      Lenders copies of the following documents which have been filed by PESI
      with the SEC pursuant to Sections 13(a), 14(a), (b) or (c) or 15(d) of the
      Exchange Act (such documents are hereinafter collectively called the “SEC
      Filings”):

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (a)

            	
              Annual
      Report on Form 10-K for the year ended December 31, 2008 (the “Form
      10-K”), which report includes, among other things, consolidated Balance
      Sheets as at December 31, 2008 and December 31, 2007, and Consolidated
      Statements of Operations, Consolidated Statements of Shareholders’ Equity
      and Consolidated Statements of Changes in Financial Position of PESI for
      the three year periods ended December 31, 2008, December 31, 2007 and
      December 31, 2006, examined and reported on by BDO Seidman, LLP,
      independent certified public accountants;
and

            

    

    

    
      	
               
      

            	
              (b)

            	
              Current
      Reports on Form 8-K filed with the Securities and Exchange Commission on
      March 2, 2009, March 11, 2009, March 30, 2009, and April 8,
      2009.

            

    

    

    
      	
               
      

            	
              7.4

            	
              Investment
      Representations.  Each of the Lenders acknowledges
      and agrees that the Shares and Warrants acquired under this
      Agreement and the Warrant Shares issuable under the Warrants are not
      being registered under any state securities laws on the ground that the
      issuance thereof is exempt from registration, and are not being registered
      under the Act on the ground that the issuance thereof is exempt from
      registration under Rule 506 of Regulation D and/or 4(2) of the Act and
      that reliance by PESI on such exemptions is predicated in part
      on each Lenders’ representations and warranties set forth
      in this Agreement. In furtherance thereof, the Lenders represent and
      warrant to and agrees with PESI and its affiliates as
    follows:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Lenders realize that the basis for the exemption may not be present if,
      notwithstanding such representations, the Lenders have in mind merely
      acquiring the Shares, Warrants or Warrant Shares for a fixed or
      determinable period in the future, or for a market rise, or for sale if
      the market does not rise.  The Lenders do not have any such
      intention;

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Lenders have the financial ability to bear the economic risk of his
      investment, has adequate means for providing for current needs and
      personal contingencies and has no need for liquidity with respect to an
      investment in PESI;

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Lenders have such knowledge and experience in financial and business
      matters as to be capable of evaluating the merits and risks of the
      prospective investment in the Shares, Warrants and the Warrant Shares;
      and

            

    

    

    
      	
               
      

            	
              (d)

            	
              Each
      Lender is an accredited investor as defined in Rule 501 of the Act, for
      the following reasons, which are not intended to be exclusive Both Lampson
      and Rettig have net worths in excess of $1,000,000 and a net incomes in
      excess of $200,000 in each of the most recent years and has reasonable
      expectation of reaching the same income level in the current
      year.

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              7.5

            	
              Due
      Diligence.  The
Lenders:

            

    

    

    
      	
               
      

            	
              (a)

            	
              have
      been furnished for a reasonable period of time prior to the date hereof
      with the SEC Filings and any documents which may have been made available
      upon request (collectively with this Agreement, the “Investment
      Materials”) and the Lenders have carefully read and evaluated the
      Investment Materials and understand the risks involved in an investment in
      the Shares and Warrants, including the risks set forth under the section
      titled “Risk Factors” in the Form 10-K and the considerations set forth in
      the Investment Materials, and have relied solely (except as indicated in
      subsections (b) and (c) below) on the information contained in the
      Investment Materials (including all exhibits
  thereto);

            

    

    

    
      	
               
      

            	
              (b)

            	
              have
      been provided an opportunity, for a reasonable period of time prior to the
      date hereof, to obtain additional information concerning the acquisition
      of the Shares and Warrants, PESI and all other information to the extent
      PESI possesses such information or can acquire it without unreasonable
      effort or expense;

            

    

    

    
      	
               
      

            	
              (c)

            	
              have
      been given the opportunity, for a reasonable period of time prior to the
      date hereof, to ask questions of and receive answers from, PESI or its
      representatives concerning the terms and conditions of the acquisition of
      the Shares and Warrants and other matters pertaining to an investment
      therein, and have been given the opportunity for a reasonable period of
      time prior to the date hereof to obtain such additional information
      necessary to verify the accuracy of the information contained in the
      Investment Materials or that which was otherwise provided in order to
      evaluate the merits and risks of a purchase of the Shares and
      Warrants;

            

    

    

    
      	
               
      

            	
              (d)

            	
              have
      not been furnished with any oral representation or oral information in
      connection with the acquisition of the Shares and Warrants which is not
      contained in the Investment Materials;
and

            

    

    

    
      	
               
      

            	
              (e)

            	
              have
      determined that the Shares and Warrants are a suitable investment for the
      Lenders and that at this time the Lenders could bear a complete loss of
      such investment.

            

    

    

    
      	
               
      

            	
              7.6

            	
              No
      Reliance.  The Lenders are not relying on PESI, or its
      affiliates with respect to economic considerations involved in an
      investment in the Shares and Warrants.  The Lenders have relied
      on the advice of, or has consulted with only their lawyers, accountants,
      and advisors in connection with the transactions contemplated by this
      Agreement.  Each Lender is capable of evaluating the merits and
      risks of an investment in the Shares and Warrants on the terms and
      conditions set forth in this
Agreement.

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              7.7

            	
              Restrictions on
      Transfer.  The Lenders represent, warrant and agree that
      he will not sell or otherwise transfer the Shares and Warrants without
      registration under the Act or an exemption therefrom and fully understands
      and agrees to bear the economic risk of any purchase because, among other
      reasons, the Shares and the Warrant Shares have not been registered under
      the Act or under the securities laws of any state and, therefore, cannot
      be resold, pledged, assigned or otherwise disposed of unless, inter alia, they are
      subsequently registered under the Act and under the applicable securities
      laws of such states or an exemption from such registration is available.
      In particular, the Lenders are aware that the Shares and Warrants are
      “restricted securities,” as such term is defined in Rule 144 promulgated
      under the Act (“Rule 144”), and they may not be sold pursuant to Rule 144
      unless all of the conditions of Rule 144 are met.  The Lenders
      also understand that PESI is under no obligation to register the Shares,
      the Warrants, or the Warrant Shares on the Lenders’ behalf or to assist
      the Lenders in complying with any exemption from registration under the
      Act or applicable state securities laws.  The Lenders further
      understands that U. S. securities laws, applicable state securities laws,
      and the provisions of this Agreement further restrict sales or transfers
      of the Shares, Warrants and Warrant
Shares.

            

    

    

    
      	
               
      

            	
              7.8

            	
              Representations.  No
      representations or warranties have been made to the Lenders by PESI, or
      any officer, employee, agent, affiliate or subsidiary of PESI, other than
      the representations of PESI contained herein and in connection with this
      Agreement the Lenders have not relied upon any representations other than
      those expressly contained herein.

            

    

    

    
      	
               
      

            	
              7.9

            	
              Financial
      Information.  Any information which the Lenders have
      heretofore furnished to PESI with respect to his financial position and
      business experience is correct and complete as of the date of this
      Agreement and if there should be any material change in such information
      the Lenders shall immediately furnish such revised or corrected
      information to PESI.

            

    

    

    
      	
               
      

            	
              7.10

            	
              Restrictive
      Legends.  The Lenders understand and agree that the
      certificates for the Shares and Warrants will bear, substantially, the
      following legend until (a) such securities will have been registered under
      the Act and effectively been disposed of in accordance with an effective
      registration statement; or (b) in the opinion of counsel for PESI such
      securities may be sold without registration under the Act, as well as any
      applicable “Blue Sky” or state securities
laws:

            

    

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE.  THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT WHICH IS CURRENT WITH RESPECT TO THESE SECURITIES OR
PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE ACT BUT ONLY UPON A
HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO COUNSEL FOR PESI, TO THE EFFECT THAT THE PROPOSED DISPOSITION MAY
BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT.”

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              7.11

            	
              Speculative
      Investment.  The Lenders understand that an investment in
      the Shares and Warrants is a speculative investment that involves a high
      degree of risk and the potential loss of the entire
      investment.

            

    

    

    
      	
               
      

            	
              7.12

            	
              Overall
      Commitments.  Each Lender’s overall commitment to
      investments that are not readily marketable is not disproportionate to the
      Lender’s net worth, and an investment in the Shares and Warrants will not
      cause such overall commitment to become
  excessive.

            

    

    

    
      	
               
      

            	
              7.13

            	
              Survival.  The
      representations, warranties and agreements of the Lenders set forth in
      this Agreement will survive the
Closing.

            

    

    

    8.           Indemnity.  The
Lenders agree, jointly and severally, to indemnify and hold harmless PESI, its
officers and directors, employees and its affiliates and each other person, if
any, who controls any thereof, against any loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever) arising out of
or based upon any false representation or warranty or breach or failure by the
Lenders to comply with any of the provisions of paragraph 7 of this
Agreement.

    

    9.           Default.  A
default will occur under the Note (a “Default”) upon the failure of PESI to pay
within 30 days when due any interest on or principal of the Note or any renewals
or modifications thereof.

    

    10.         Remedies.  Upon
a Default (as defined in paragraph 9, above), the Lenders will have the option
to declare the Note and any renewals, extensions or modifications thereof to be
immediately due and payable whereupon the 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
PESI to receive in full and complete satisfaction of all of PESI’s obligations
under the 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

    

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

     

    (b) the
number of whole shares of PESI common stock (the “Payoff Shares”) determined by
dividing the Payoff Amount by the dollar amount equal to the closing bid price
of PESI’s common stock on 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 this 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 Agreement, the
Note, or the Warrants, the aggregate number of Shares, Warrant Shares, and
Payoff Shares that are or  will be issued to the Lenders pursuant to
this Agreement, the Note, and the Warrants, together with the aggregate shares
of PESI common stock and other PESI voting securities owned by the Lenders as of
the date of issuance of the Payoff Shares, shall not exceed (a) the number of
shares equal to 19.9% of the number of shares of PESI common stock issued and
outstanding as of the date of this Agreement or (b) 19.9% of the voting power of
all PESI voting securities issued and outstanding as of the date of this
Agreement.  Subject to the terms of this Agreement, PESI will issue
the common stock certificates representing the Payoff Shares to the Lenders in
the following denominations:  90% of the Payoff Shares to Lampson and
10% of the Payoff Shares to Rettig.  PESI will not issue any
fractional shares of common stock.

    

    11.         Miscellaneous.  It
is further agreed as follows:

     

    
      	
               
      

            	
              11.1

            	
              KeyBank.  The
      Lenders intend to borrow from KeyBank National Association
      (“KeyBank”) up to $3,000,000 (the “KeyBank Loan”) to fund the Loan to
      PESI in accordance with paragraph 1 of this Agreement.  PESI
      agrees to pay, on behalf of the Lenders, all reasonable and customary
      closing costs and bank fees assessed against the Lenders by KeyBank in
      connection with the KeyBank Loan.  All other legal, accounting,
      and miscellaneous fees and expenses incurred in connection with the
      negotiation and preparation of this Agreement and the transactions
      contemplated by this Agreement will be paid by the party incurring such
      expenses.  At the written direction of the Lenders, payments
      under the Note will be paid to Lenders’ account at
  KeyBank.

            

    

    

    
      	
               
      

            	
              11.2

            	
              Amendment and
      Waiver.  This agreement may not be amended or modified in
      any way, except by an instrument in writing executed by all of the parties
      hereto; provided, however, the Lenders may, in writing: (a) extend the
      time for performance of any of the obligations of PESI; (b) waive any
      default by PESI; and (c) waive the satisfaction of any condition that is
      precedent to the performance of the Lenders’ obligations under this
      Agreement.

            

    

    

    
      	
               
      

            	
              11.3

            	
              Non-Waiver; Cumulative
      Remedies.  No failure on the part of the Lenders to
      exercise and no delay in exercising any right hereunder shall operate as a
      waiver thereof, nor shall any single or partial exercise by the Lenders of
      any right hereunder preclude any other or further right of exercise
      thereof.  The remedies herein provided are cumulative and not
      alternative.

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              11.4

            	
              Material Adverse
      Effect. The term “Material
      Adverse Effect” when used in connection with an entity means any change,
      event, violation, inaccuracy, circumstance or effect, individually or when
      aggregated with other changes, events, violations, inaccuracies,
      circumstances or effects, that is materially adverse to the business,
      assets (including intangible assets), revenues, financial condition or
      results of operations of such entity, it being understood that none of the
      following alone or in combination shall be deemed, in and of itself, to
      constitute a Material Adverse Effect:  (a) changes attributable
      to the public announcement or pendency of the transactions contemplated
      hereby, (b) changes in general national or regional economic conditions,
      or (c) any SEC rulemaking.

            

    

    

    
      	
               
      

            	
              11.5

            	
              Governing
      Law.  This Agreement shall be governed by and construed
      in accordance with the law of the State of Washington regardless of the
      law that might otherwise govern under applicable principals of conflicts
      of law thereof.

            

    

    

    
      	
               
      

            	
              11.6

            	
              Descriptive
      Headings.  The descriptive headings of the paragraphs of
      this Agreement are for convenience only and shall not be used in the
      construction of the terms hereof.

            

    

    

    
      	
               
      

            	
              11.7

            	
              Integrated
      Agreement.  This Agreement, the Note and the Warrants
      executed pursuant hereto or in connection herewith constitute the entire
      agreement between the parties hereto, and there are no agreements,
      understandings, warranties or representations between the parties other
      than those set forth in such
documents.

            

    

    

    
      	
               
      

            	
              11.8

            	
              Binding Effect.
      This Agreement shall be binding on and inure to the benefit of the parties
      hereto and their respective successors, personal representatives, legal
      representatives and assigns.

            

    

    

    
      	
               
      

            	
              11.9

            	
              Third Party
      Beneficiary.  Nothing in this Agreement, express or
      implied, is intended to confer on any person, other than the parties
      hereto and their respective successors and assigns, any rights or remedies
      under or by reason of this
Agreement.

            

    

    

    
      	
            	
              11.10

            	
              Maximum Legal Rate of
      Interest.  Notwithstanding any other provisions of this
      Agreement or the Note to the contrary, the total interest charges incurred
      by PESI pursuant to the Note shall not exceed the maximum legal rate of
      interest under Washington law.  If the holder of the Note shall
      ever be entitled to receive, collect or apply, as interest on the Loan,
      any amount in excess of the maximum legal rate of interest permitted to be
      charged by applicable law, and, in the event any holder of the Note ever
      receives, collects or applies, as interest, any such excess, such amount
      which would be excessive interest shall be applied to the reduction of the
      unpaid principal balance of the applicable Note, and if the principal
      balance is paid in full, any remaining excess shall be forthwith paid to
      PESI.  In determining whether or not the interest paid or
      payable under any specific contingency exceeds the highest lawful rate,
      PESI and the Lenders shall, to the maximum extent permitted, under
      applicable law: (a) characterize any non-principal payment as an expense,
      fee or premium rather than as interest; (b) exclude voluntary prepayments
      and the effects thereof; (c) “spread” the total amount of interest on the
      Note throughout the entire term of the Note so that the interest rate is
      uniform throughout the entire term of the
Note.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    
      	
            	
              11.11

            	
              No Responsibility of
      Lenders.  Notwithstanding
      any term or provision of this Agreement or the Note, the Lenders shall not
      have any rights as to management, conduct or operation of the business and
      affairs of PESI or any of their
subsidiaries.

            

    

    

    
      	
            	
              11.12

            	
              Counterparts;
      Facsimile Signatures.  This Agreement may be executed in
      one or more counterparts, all of which shall be considered one and the
      same agreement and shall become effective when one or more counterparts
      have been signed by each of the parties and delivered to the other party,
      it being understood that all parties need not sign the same
      counterpart.  Delivery by facsimile to counsel for the other
      party of a counterpart executed by a party shall be deemed to meet the
      requirements of the previous
sentence.

            

    

    

    
      	
            	
              11.13

            	
              Assignment.  No
      party may assign either this Agreement or any of its rights, interests, or
      obligations hereunder without the prior written approval of the other
      parties.  This Agreement shall be binding upon and shall inure
      to the benefit of the parties hereto and their respective successors and
      permitted assigns.

            

    

    

    
      	
            	
              11.14

            	
              Attorneys’
      Fees.  In any action or proceeding brought to enforce any
      provision of this Agreement, or where any provision hereof is validly
      asserted as a defense, the prevailing party shall be entitled to recover
      reasonable attorneys’ fees.

            

    

    

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    IN
WITNESS WHEREOF, the parties have caused this Loan and Securities Purchase
Agreement to be duly executed as of the day and year first above
written.

    

    
      
        
          
            
              
                	
                        PERMA-FIX
      ENVIRONMENTAL SERVICES,

                        INC.,
      a Delaware corporation

                      
	 
      	 
      
	
                        By:

                      	
                        /s/Louis Centofanti

                      
	 
      	 
      
	 
      	 
      
	
                        (“PESI”)

                      
	 
      
	
                        /s/ William N. Lampson

                      
	
                        WILLIAM
      N. LAMPSON, an individual

                      
	 
      
	
                        (“Lampson”)

                      
	 
      
	
                        /s/Diehl Rettig

                      
	
                        DIEHL
      RETTIG, an individual

                      
	 
	
                        (“Rettig”)

                      
	 
      
	
                        (Lampson
      and Rettig are collectively,

                      
	
                        the
      “Lenders”)

                      

              

            

          

        

      

    

    
      
         

      

      
        12

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