Non-Recourse
Guaranty of Payment
Of
Promissory Note
WHEREAS, Waste Management Holdings, Inc., ("WM") has been
requested to accept a $2,500,000 Promissory Note in lieu of a
certain amount of cash from Perma-Fix Environmental Services,
Inc.("Debtor"), in connection with the closing of the Stock
Purchase Agreement between WM and Debtor dated May 16, 2000 as
amended by First Amendment to Stock Purchase Agreement dated
August 31, 2000. Said Promissory Note in the principal sum of
two million five hundred thousand dollars ($2,500,000.00), dated
August 31, 2000 ("Promissory Note"), together with interest
thereon at the rate of 11.25 percent per annum and secured by
this Guaranty.
WHEREAS, WM has declined to accept the Promissory Note unless
said Promissory Note shall be guaranteed on a non-recourse basis
by Diversified Scientific Services, Inc., a Tennessee corporation
("Guarantor") and unless such guaranty shall be secured by
certain assets of Guarantor.
NOW, THEREFORE, in consideration of WM's promise to accept the
Promissory Note, and for other valuable consideration received,
Guarantor hereby unconditionally and irrevocably guarantees
pursuant to the terms of this Agreement, WM., its successors and
assigns, the prompt and full repayment of the principal sum owing
on said Promissory Note, and all interest accrued and to accrue
thereon in accordance with its terms, except that Guarantor shall
be liable for the outstanding principal on said Note, together
with only so much of the interest owing thereon that would not
exceed the lawful rate for individual borrowers applicable at the
time the Note was made.
The Guarantor does hereby guarantee and become a surety, without
personal liability, to WM for the prompt satisfaction when due,
whether by acceleration or otherwise, of Debtor's obligations
under the Promissory Note subject to the terms of this Guaranty.
The Guarantor agrees that if Debtor's obligations under the
Promissory Note are not satisfied when due, either at maturity or
by acceleration or otherwise, the Guarantor shall upon demand by
WM forthwith satisfy such indebtedness of the Debtor to the
extent and only to the extent of the Collateral pledged pursuant
to this Guaranty shall satisfy Guarantor's obligations hereunder,
and provided that this Guaranty is non-recourse to the Guarantor
hereunder and is limited to the proceeds derived from the public
sale of the Collateral by Guarantor acting in good faith to
achieve the highest possible sales price for the Collateral or at
the sole election of WM, by surrendering the Collateral to WM.
If the Collateral is sold at a public sale the costs and expenses
of such sale shall be borne by Guarantor.. The Guarantor shall
not be liable for any deficiency which may remain under the
Promissory Note or otherwise upon the public sale of the
Collateral.
A separate cause of action may be brought and prosecuted against
the Guarantor without the necessity of joining the Debtor or
previously proceeding or exhausting any other remedy against the
Debtor or any other person who might have become liable for the
indebtedness by assumption thereof or of realizing upon any
security then held by noteholder to secure such indebtedness.
The Guarantor hereby specifically waives any and all defenses to
any action or proceeding brought to enforce this Guaranty or any
part of this Guaranty either at law or in equity, except the
single defense that the sum claimed has actually been paid to the
holder of the Promissory Note. Without limiting the foregoing in
anywise but merely by way of illustration, Guarantor specifically
waives any and all technical, dilatory or nonmeritorious
defenses, and any defense predicated upon and including but not
limited to:
1) Change or modification of the Promissory Note.
2) Indulgence or forbearance in enforcement of any term of
either the Promissory Note or any other instrument securing
affecting or modifying said Note or any term for the repayment of
the indebtedness it evidences.
3) Change of ownership of any of the assets securing this
Guaranty.
4) A release of all or any part of the security, whether for
valuable consideration or otherwise.
5) Acquiring additional security
6) Substitution of different security in exchange or exchanges
for part or parts of the original security.
7) The fact that there may be persons other than the Guarantor,
solvent and responsible for the payment of the indebtedness.
The Guarantor hereby assigns and grants to WM a continuing
general lien on, and security interest in, all of Guarantor's
right, title and interest in, and to the collateral described in
Schedule 1 attached hereto and hereby made a part of this
Guaranty (the "Collateral")to secure the payment and performance
of all of Guarantor's obligations under this Guaranty.
The Guarantor hereby represents, warrants and covenants, and for
so long as this Guaranty is in effect shall be deemed to
continuously represent, warrant and covenant, that:
The Guarantor is the owner of the Collateral and, except for the
first priority security interest granted by Guarantor to WM
pursuant hereto, and the second lien and security interest in and
to the Collateral granted by the Guarantor to its lender, the
Collateral and each part thereof is free and clear from, and is
not subject to, any security interest, mortgage, pledge, lien,
levy for taxes or other assessment, interest, charge, adverse
claim or other encumbrance, including any financing statement or
other document file din any public office (collectively, the
"encumbrances"); and Guarantor shall keep and maintain the
Collateral, and each part thereof, in good condition, ordinary
wear and tear excepted;
Notwithstanding the above, if any portion of the Collateral was
in the possession of Guarantor at the time of the Closing of the
transaction contemplated by the Stock Purchase Agreement, and
such Collateral is not owned by the Guarantor or is subject to a
lien or security interest in breach of WM's representations,
warranties or covenants contained in the Stock Purchase
Agreement, then such shall not be a breach of this Agreement.
2
(a) The Guarantor shall, at its sole cost and expense, defend
its right, title and interest in and to the Collateral, and
defend the Collateral against any claims of infringement and all
other claims or demands of any other party and all other
liabilities of any nature whatsoever;
(b) The Collateral is personalty and the Guarantor shall not,
except with the prior written consent of WM, affix the Collateral
to real estate in such a manner as to cause the Collateral to
become a fixture, as such term is defined in Section 9-313 of the
Uniform Commercial Code of Tennessee or to become part of real
estate; if the Collateral is or in the opinion of WM may become a
fixture or part of any real estate, the Guarantor shall give WM a
written waiver by the record owner of such real estate of all
interest in the Collateral and a written subordination by any
person who has a lien on such real estate which is or may be
superior to the security interest created by this Agreement;
(c) The Guarantor shall, at its expense, maintain the Collateral
and every part thereof in good operating condition and shall not
permit anything to be done or any condition to exist that may
impair the value of the Collateral, ordinary wear and tear
excepted;
(d) The Guarantor shall at all times and at its expense keep the
Collateral fully insured against risks of loss or physical damage
by collision, upset, fire (including so-called extended
coverage), theft and other casualties as WM may reasonably
require, losses in all cases to be payable to WM and the
Guarantor as their interests may appear; all policies of
insurance shall provide for at least ten days' prior written
notice of cancellation to WM; the Guarantor shall promptly
furnish WM with certificates of insurance or other evidence
satisfactory to WM as to compliance with the provisions of this
Section; the Guarantor further agrees that, in the event it shall
fail to pay the premium on any such insurance; WM may do so and
the Guarantor shall promptly reimburse WM for such expense.
(e) The Guarantor shall duly and promptly pay and discharge, or
cause to be paid and discharged, (i) all taxes, assessments and
governmental charges or levy upon or against it or its profits,
income, properties or assets and when such became due, except
Guarantor may contest such in good-faith, (ii) all lawful claims,
for labor, materials, supplies, or services, becomes a lien or
charge upon the Collateral, unless and to the extent only that
the same are being diligently contested in good faith by
appropriate proceedings and appropriate reserves therefore have
been established in accordance with generally accepted accounting
principles consistently applied;
(f) The Collateral, or any part thereof, will not be sold,
assigned, conveyed, transferred, disposed of or become subjected
to any subsequent interest of any party, created or suffered by
the Guarantor, voluntarily or involuntarily, except as expressly
authorized in writing by WM, except in the ordinary course of
business or to replace such because of damage or obsolence of
such, provided, however that such replacement of the Collateral
or any part thereof shall have a fair market value equal to or in
excess of the Collateral replaced, that Guarantor provide WM
3
written notice of the replacement within ten days thereof and
htat the property replacing the Collateral be deemed substituted
for the original Collateral and subject to this Guaranty;
(g) The Guarantor, at its sole cost and expense, shall duly
execute, deliver and file, or cause to be duly executed,
delivered or filed, financing, continuation or termination
statements, certificates of title for endorsement with respect to
the security interested created by this Agreement and such other
instruments and documents as WM may request, and do and cause to
be done such acts and things as WM may at any time reasonably
request in order to enforce, perfect and protect its security
interest in the Collateral as herein provided and its rights and
remedies with respect to the Collateral;
(h) No other Obligation shall be released, discharged, or
impaired in any manner or to any extent if: (i) WM renews,
extends, modifies, changes or waives the time of payment and/or
the manner, place or terms of payment of all or any part of any
obligation secured hereby or any renewal thereof; or (ii) WM
makes any exchange, release, substitution, addition, surrender,
settlement or compromise with WM subordinates an obligation or
the Collateral, or both, to any other indebtedness of the
Guarantor or security therefore, or both, which may exist at any
time hereafter and no right of WM shall be impaired by any of the
foregoiung, including its right to declare a subsequent default
of the Promissory Note, this right bring deemed a continuing one;
(i) The Guarantor shall promptly notify WM of any act, condition
or event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default hereunder, including
the existence of any material litigation, arbitration or other
legal proceedings involving or affecting the collateral; and
The liability hereunder assumed shall not be affected by the
acceptance of any settlement or composition by Guarantor either
in liquidation, readjustment, receivership, bankruptcy or
otherwise, except only to the extent that such settlement has
resulted in actual payment of a part of the indebtedness, and
then only to that extent.
WM shall not be required to give notice to Guarantor of any
failure or omission on the part of Guarantor to meet any payment
sooner than at the time payment hereunder is demanded, and
Guarantor expressly waives any other notice.
The undersigned Guarantor hereby agrees to waive any rights of
subrogation of WM or any beneficiary of the Guaranty until such
time as WM or the beneficiary has received payment under the
aforementioned Note.
Nothing contained in this Guaranty shall be construed as obliging
Guarantor in anywise to be responsible for interest in excess of
what would be lawful for Guarantor to pay under the
circumstances.
This instrument is to be construed as a continuing, binding,
absolute, and unconditional guaranty that shall remain in full
force and effect as written until actual payment of said
4
Promissory Note, both principal and interest, or until terminated
by agreement between the Guarantor and the holder of this
guaranty. To the extent permitted by law, Guarantor shall pay
all reasonable attorney fees and other costs and expenses
incurred by WM in the event that WM shall be obliged to resort to
the courts or require the services of an attorney to collect
hereunder or to protect or preserve the Collateral.
If any part of this guaranty agreement shall not be valid under
the laws or the state or jurisdiction where the premises
encumbered by the mortgage that secures the Promissory Note
concerning which this guaranty has been issued is located, such
part shall be rendered inoperative, but the remainder of this
guaranty shall be enforced.
Wherever the name of WM appears, the rights and authority granted
WM shall inure to the benefit of its successors and assigns
(whether such statement follows WM's title or not), and the
agreement contained herein by Guarantor shall bind the successors
and assigns of Guarantor.
IN WITNESS WHEREOF the Guarantor has executed this guaranty on
this 31st day of August, 2000.
DIVERSIFIED SCIENTIFIC SERVICES,
INC.
By: /s/ Robert G. Simpson
_____________________________
Title: President
____________________________