THIS PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AGREEMENT WITH
CONGRESS FINANCIAL CORPORATION (FLORIDA).
PROMISSORY NOTE
$1,230,000 May 28, 1999
FOR VALUE RECEIVED, the undersigned, PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Maker"), promises to pay
to the order of the ANN L. SULLIVAN LIVING TRUST, dated September
6, 1978 ("Payee"), in lawful money of the United States of America,
the principal sum of One Million Two Hundred Thirty Thousand and
no/100 Dollars ($1,230,000), together with interest on the unpaid
principal balance at an annual rate equal to 5.5% for three years
from the date hereof and at an annual rate equal to 7.0% for two
years thereafter, in the manner provided below. Interest shall be
calculated on the basis of a year of 360 days and charged for the
actual number of days elapsed.
This Note has been executed and delivered pursuant to and in
accordance with the terms and conditions of that certain Stock
Purchase Agreement (the "Chem-Con Stock Agreement"), dated as of
the even date herewith, by and among Maker, Payee, Chemical
Conservation Corporation, a Florida corporation, Chemical
Conservation of Georgia, Inc., a Georgia corporation, the Thomas P.
Sullivan Living Trust, dated September 6, 1978 (the "TPS Trust"),
Thomas P. Sullivan, an individual ("TPS"), and Ann L. Sullivan, an
individual ("ALS"), and is subject to the terms and conditions of
the Chem-Con Stock Agreement, which are, by this reference,
incorporated herein and made a part hereof. Capitalized terms used
in this Note without definition shall have the respective meanings
set forth in the Chem-Con Stock Agreement. Along with this Note,
a second note ("Second Chem-Con Note") in the original principal
amount of $1,970,000 is being issued by Maker to Payee and a third
note ("Chem-Met Note") in the original principal amount of
$1,500,000 is being issued to the TPS Trust in connection with a
certain Stock Purchase Agreement (the "Chem-Met Stock Agreement"),
dated as of the even date herewith, by and among Maker, Payee,
Chem-Met Services, Inc. a Michigan corporation ("Chem-Met"), the
TPS Trust, TPS and ALS. Collectively, the Note, Second Chem-Con
Note and Chem-Met Note are referred to as the "Three Notes." The
obligations of Maker underlying the Three Notes are guaranteed by
that certain Non-Recourse Guaranty among Chem-Met, Payee and the
TPS Trust of even date herewith. The Three Notes are secured by
that certain Mortgage of even date herewith which covers certain
Real Estate owned by Chem-Met.
1. PAYMENTS
1.1 PRINCIPAL AND INTEREST
The principal amount of this Note and accrued interest thereon
shall be payable in sixty (60) consecutive monthly installments,
with the first installment commencing on July 1, 1999, and an
installment payable on the 1st day of each month thereafter until
paid in full. The amount of each installment of principal and
interest paid each month shall be Twenty Three Thousand Six Hundred
Twenty-Five and 67/100 Dollars ($23,625.67).
1.2 MANNER OF PAYMENT
All payments of principal and interest on this Note shall be
delivered to Payee at 1021 Harvard Road, Grosse Pointe Park,
Michigan 48230 or at such other place in the United States of
America as Payee shall designate to Maker in writing. If any
payment of principal or interest on this Note is due on a day which
is not a Business Day, such payment shall be due on the next
succeeding Business Day, and such extension of time shall be taken
into account in calculating the amount of interest payable under
this Note. "Business Day" means any day other than a Saturday,
Sunday or legal holiday in the State of Delaware.
1.3 PREPAYMENT
Maker may, without premium or penalty, at any time and from time to
time, prepay all or any portion of the outstanding principal
balance due under this Note, provided that each such prepayment is
accompanied by accrued interest on the amount of principal prepaid
calculated to the date of such prepayment. Any partial prepayments
shall be applied to installments of principal in inverse order of
their maturity.
2. DEFAULTS
2.1 EVENTS OF DEFAULT
The occurrence of any one or more of the following events with
respect to Maker shall constitute an event of default hereunder
("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for fifteen (15)
days after Payee notifies Maker in writing of such failure to pay;
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a "Bankruptcy Law"), Maker shall
(i) commence a voluntary case or proceeding; (ii) consent to the
entry of an order for relief against it in an involuntary case;
(iii) consent to the appointment of a trustee, receiver, assignee,
liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing its inability to
pay its debts as they become due;
(c) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against Maker in an
involuntary case, (ii) appoints a trustee, receiver, assignee,
liquidator or similar official or for Maker substantially all of
Maker's properties, or (iii) orders the liquidation of Maker, and
in each case the order or decree is not dismissed within 90 days;
or
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(d) If Maker shall undergo a Change of Control. For the purposes
of this Note, a "Change of Control" shall mean the acquisition
after the date of this note of eighty percent (80%) or more of
Maker's then outstanding Common Stock, par value $.001 per share by
a person, corporation or other entity or the acquisition of all or
substantially all of its assets of the Maker by a person,
corporation or other entity, except the acquisition of such stock
or assets by a subsidiary of the Maker.
2.2 REMEDIES
Upon the occurrence of an Event of Default hereunder (unless all
Events of Default have been cured by Maker or waived by Payee),
Payee may, at its option, (i) by written notice to Maker, declare
the entire unpaid principal balance of this Note, together with all
accrued interest thereon, immediately due and payable regardless of
any prior forbearance, and (ii) exercise any and all rights and
remedies available to it under applicable law, including, without
limitation, the right to collect from Maker all sums due under this
Note. Maker shall pay all reasonable costs and expenses incurred by
or on behalf of Payee in connection with Payee's exercise of any or
all of its rights and remedies under this Note, including, without
limitation, reasonable attorneys' fees.
3. MISCELLANEOUS
3.1 WAIVER
The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any right or
remedy under this Note shall be effective unless in a writing
signed by Payee. Neither the failure nor any delay in exercising
any right, power or privilege under this Note will operate as a
waiver of such right, power or privilege and no single or partial
exercise of any such right, power or privilege by Payee will
preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
To the maximum extent permitted by applicable law, (a) no claim or
right of Payee arising out of this Note can be discharged by Payee,
in whole or in part, by a waiver or renunciation of the claim or
right unless in a writing, signed by Payee; (b) no waiver that may
be given by Payee will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on
Maker will be deemed to be a waiver of any obligation of Maker or
of the right of Payee to take further action without notice or
demand as provided in this Note. Maker hereby waives presentment,
demand, protest and notice of dishonor and protest.
3.2 NOTICES
Any notice required or permitted to be given hereunder shall be
given in accordance with Section 12.7 of the Chem-Con Stock
Agreement.
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3.3 SEVERABILITY
If any provision in this Note is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this
Note will remain in full force and effect. Any provision of this
Note held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable.
3.4 GOVERNING LAW
This Note will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
3.5 PARTIES IN INTEREST
This Note shall bind Maker and its successors and assigns.
3.6 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Note are provided for convenience
only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding
Section or Sections of this Note unless otherwise specified.
All words used in this Note will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly
provided, the words "hereof" and "hereunder" and similar references
refer to this Note in its entirety and not to any specific section
or subsection hereof.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as
of the date first stated above.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.,
a Delaware corporation
By: /s/ Louis F. Centofanti
_______________________________
Dr. Louis F. Centofanti, President