SUBORDINATION AGREEMENT
In consideration of the financial accommodations given, to be
given, or continued by CONGRESS FINANCIAL CORPORATION (FLORIDA), a
Florida corporation (hereinafter the "Lender"), to PERMA-FIX
ENVIRONMENTAL SERVICES, INC., a Delaware corporation. (hereinafter
the "Borrower"), and other affiliates of the Borrower, the
undersigned hereby agree, jointly and severally, as follows:
1. Each of the undersigned hereby postpones and subordinates
all of the respective indebtedness and other obligations of the
Borrower to the undersigned or any one of them of any nature
whatsoever, whensoever and however arising under either of those
certain Stock Purchase Agreements (as defined below) and/or under
each of the Promissory Notes (each such Promissory Note, a "Note")
of the Borrower in favor of the undersigned true and correct copies
of which are annexed hereto as Exhibits "A", "B", and "C" (the
aforesaid obligations and liabilities, including principal and
interest of the respective Notes are collectively referred to as
the "Subordinated Debt") to any and all obligations, liabilities
and indebtedness of every kind, nature and description owing by
Borrower (and severally as in connection with any affiliate of
Borrower) to Lender and/or its affiliates, including principal,
interest, charges, fees, costs and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise,
whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by Lender,
including, without limitation, the obligations of the Borrower in
favor of the Lender under that certain Loan and Security Agreement
dated of even date herewith, by and between the Borrower and the
Lender (the "Loan Agreement"; all capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Loan
Agreement) and/or the "Term Promissory Note" executed in connection
therewith (all of the foregoing being referred to collectively, as
the "Obligations"), and agrees that no payment of (except as
provided in paragraph 3 below) or on account of the Subordinated
Debt shall be made, or any security therefor given, except for the
Michigan Real Estate (as defined below), unless and until all of
the Obligations have been paid in full and all Financing Agreements
have been terminated, and further agrees not to demand, receive or
accept any such payment or security, except for the Michigan Real
Estate. Further, as long as the Loan Agreement or any other
Financing Agreement remains in force and effect, or any of the
Obligations remains outstanding, none of the undersigned has, nor
shall either of them hereafter have, any interest in and to or lien
upon the Collateral (as defined in the Loan Agreement), or any
other property or interest of the Borrower (or any affiliate
thereof), except for the Michigan Real Estate. As used in this
Agreement, the Michigan Real Estate shall mean that certain real
property described on Schedule 1 hereto (the "Real Property"), and
the building and improvements, and real estate fixtures, permits
and licenses to operate the building thereon (except for all
tangible and intangible assets used in connection with the business
of the Borrower and its affiliates, or any of them, including,
without limitation, all permits and licenses to operate the
business, and all trade fixtures of Borrower or its affiliates),
and all vacated alleys and streets abutting said land, together
with all rents and leases from third party tenants, if any, thereof
(but not the accounts, chattel paper or other intangible property
in which a security interest may be perfected under the Uniform
Commercial Code in effect in the State of Michigan from time to
time), and tenements, hereditaments, easements and appurtenances
therein or thereto. Each of the undersigned hereby disclaims any
interest in any other Collateral or property of Borrower or any
affiliate.
2. Each of the undersigned represents and warrants that the
amount of the Notes outstanding on the date hereof is as follows:
(i) $1,230,000 Note payable to Xxx X. Xxxxxxxx
Living Trust (Exhibit A);
(ii) $1,970,000 Note payable to Xxx X. Xxxxxxxx
Living Trust (Exhibit B); and
(iii) $1,500,000 Note payable to Xxxxxx X.
Xxxxxxxx Living Trust (Exhibit C);
and that none of the undersigned shall, directly or indirectly, (A)
increase the amount thereof or of any other Subordinated Debt or
create additional indebtedness or obligations of Borrower to the
undersigned at any time hereafter, (B) amend, modify, alter or
change any terms of the Subordinated Debt, or the Notes or any
other agreement, document or instrument related thereto at anytime,
(C) accept any prepayment or other nonmandatory payments on account
of the Notes, or any amounts arising under the Stock Purchase
Agreements, including, without limitation, any payment in cash or
consideration other than stock of Perma-Fix on account of the
guarantee described in Section 3.2 of the Stock Purchase Agreement
in respect of Chemical Conservation of Georgia, Inc. and Chemical
Conservation Corporation, without the prior consent of Lender in
its discretion.
3. So long as no Event of Default or event which with the
passage of time, giving of notice, or both, would constitute an
Event of Default, shall have occurred and be continuing under the
Loan Agreement, or in Lender's sole determination, if the payment
to the undersigned of amounts permitted below would result in an
Event of Default (notice of any of the foregoing is referred to as
a Default Notice), Borrower may pay and, until Lender gives the
undersigned written notice of the occurrence of an Event of
Default, the undersigned may accept from the Borrower, the
regularly scheduled payments of principal, together with accrued
interest thereon, on the Notes when, and in the amounts, set forth
in each respective Note. Such payments shall exclude, without
limitation, (a) prepayments (unless Lender has given its prior
written consent in its sole discretion), (b) non-mandatory
payments, (c) any payments pursuant to acceleration or pursuant to
claims of breach or pursuant to claims to acquire any of the Notes
or otherwise, or (d) any payments by virtue of setoff against any
obligation of the undersigned, any of them, or their affiliates to
indemnify or make payments to the Borrower or its affiliates,
including, without limitation, obligations due the Borrower under
those certain Stock Purchase Agreements among the undersigned, the
Borrower, and Chem-Met Services, Inc., and Chemical Conservation of
Georgia, Inc., and Chemical Conservation Corporation, respectively
(the "Stock Purchase Agreements"). From and after the giving of
Default Notice to an undersigned, unless and until the Event of
Default or other event giving rise to a Default Notice in question
is cured or waived by Lender (without implying any obligation on
the part of Lender to permit a cure of or to waive any such Event
of Default or other event), no further payments of principal or
interest shall be made to any of the undersigned unless and until
all Obligations have been paid in full and all Financing Agreements
have been terminated, and unless Lender, in its sole discretion,
gives its prior written consent, payments on the Subordinated Debt
which accrued but were unpaid during any period commencing upon the
giving of a Default Notice will not be permitted to be paid
notwithstanding that a cure or waiver occurs (subject as
aforesaid). Notwithstanding any rights or remedies available to
any of the undersigned under any of the respective Notes, the Stock
Purchase Agreements, applicable law or otherwise, unless and until
the indefeasible satisfaction in full of all the Obligations, none
of the undersigned shall, directly or indirectly, seek to collect
from Borrower, or exercise rights or remedies upon an event of
default under the Notes, or any other payment in respect of
Subordinated Debt, including, without limitation, filing an action
to foreclose upon the Michigan Real Estate, filing a lis pendens
against the Real Property, or any other judicial or non-judicial
remedy, except that: (a) upon an event of default under the Notes,
or any of them, or any other document evidencing the Subordinated
Debt, the undersigned, as applicable, may declare Borrower to be in
default under the respective Note(s) and accelerate the respective
portion thereof, (b) any of the undersigned may defend the validity
of its claims against the Borrower, and (c) any of the undersigned
may file a proof of claim with respect to its claims against the
Borrower, in a manner consistent with the terms of this Agreement.
4. Should any payment, distribution or security or proceeds
thereof be received by any of the undersigned upon or with respect
to the Subordinated Debt prior to the satisfaction of the
Obligations, the applicable person or entity shall, except as
provided in paragraph 3, forthwith deliver the same to the Lender
in the form received (except for indorsement or assignment by the
undersigned where required by the Lender), for application in
accordance with the Loan Agreement, and, until so delivered, the
same shall be held in trust by the undersigned as the property of
the Lender.
5. In the event of any receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, readjustment of
indebtedness, composition, reorganization, whether or not pursuant
to bankruptcy laws, sale of all or substantially all of the assets,
dissolution, winding up, liquidation, or any other marshalling of
the assets and liabilities of the Borrower, regardless of whether
Lender has given any of the undersigned a Default Notice, any
payment or distribution of assets of the Borrower of any kind of
character, whether in cash, securities or other property, which
would otherwise be payable to or deliverable upon or with respect
to the Subordinated Debt shall be paid or delivered directly to the
Lender for application in accordance with the Loan Agreement until
all Obligations shall have been fully paid and satisfied. The
Lender shall have the right to enforce, collect and receive every
such payment or distribution and give acquittance therefor, and the
Lender is hereby authorized, as attorney in fact for the
undersigned, to vote and prove the respective indebtedness of the
Borrower to the undersigned in any of the above described
proceedings or in any meeting of creditors of the Borrower.
6. None of the undersigned shall assign, transfer,
hypothecate or dispose of the Subordinated Debt or any claim it has
or may have against the Borrower, while any of the Obligations
remains unpaid, without the prior consent of the Lender. The
Notes, and any other instrument at any time evidencing the
Subordinated Debt, or any portion thereof, shall be permanently
marked on its face with a legend conspicuously indicating that
payment thereof is subordinate in right of payment to the
Obligations to the extent provided for herein and subject to the
terms and conditions of this Agreement, and after being so marked
certified copies thereof shall be delivered to Lender. In the
event any legend or endorsement is omitted, Lender or any of its
officers or employees, are hereby irrevocably authorized on behalf
of the undersigned to make the same. No specific legend, further
assignment or endorsement or delivery of notes, guarantees or
instruments shall be necessary to subject any Subordinated Debt to
the subordination thereof contained in this Agreement.
7. THIS AGREEMENT SHALL BE CONTINUING AND IRREVOCABLE SO LONG
AS THE OBLIGATIONS HAVE NOT BEEN PAID IN FULL. LENDER, AT ANY TIME
AND FROM TIME TO TIME, MAY AMEND, MODIFY OR SUPPLEMENT THE FINANCING
AGREEMENTS, INCREASE, RENEW OR EXTEND THE OBLIGATIONS, OR ANY OF
THEM, OR OTHERWISE ENTER INTO SUCH AGREEMENTS WITH THE BORROWER AS
LENDER MAY DEEM PROPER EXTENDING THE TIME OF PAYMENT OR RENEWING OR
OTHERWISE ALTERING THE TERMS OF THE OBLIGATIONS, OR ANY OF THEM, OR
AFFECTING THE COLLATERAL OR ANY OTHER SECURITY UNDERLYING ANY OF THE
OBLIGATIONS, OR ANY OF THEM, OR MAY EXCHANGE, SELL OR SURRENDER OR
OTHERWISE DEAL WITH ANY SECURITY, OR MAY RELEASE ANY BALANCE OF FUNDS
OF THE BORROWER, WITH LENDER, WITHOUT NOTICE TO THE UNDERSIGNED AND
WITHOUT IN ANY WAY IMPAIRING OR AFFECTING THIS AGREEMENT.
8. The Lender's delay in or failure to exercise any right or
remedy shall not be deemed a waiver of any obligation of any of the
undersigned or right of the Lender. This Agreement may be
modified, and any of the Lender's rights hereunder waived, only by
agreement in writing signed by the Lender.
9. This Agreement shall inure to the benefit of the Lender,
its successors and assigns and bind the respective heirs, legatees,
personal representatives, successors and assigns of the
undersigned.
10. Notice of acceptance by the Lender of this Agreement is
hereby waived by each of the undersigned, and this Agreement and
all of the terms and provisions hereof shall immediately be binding
upon the undersigned and the undersigned shall deliver such
additional documents and take such action as shall be reasonably
necessary to effectuate the purposes of this Agreement.
11. This Agreement sets forth the entire understanding and
agreement of the parties with respect to the subject matter hereof.
Neither this Agreement nor any term hereof may be modified,
altered, waived, discharged or terminated orally, but only by an
instrument in writing executed by the party to be charged.
12. Any notice or other communication in connection with this
Agreement shall be in writing (or in the form of a facsimile or
telecopy) and shall be deemed to have been duly given when
addressed as provided below and if either (a) personally delivered,
or (b) mailed by registered or certified mail, return receipt
requested, postage prepaid, or (c) sent by reputable overnight
courier service with receipt confirmed; or (d) sent by facsimile
transmission with confirmed receipt:
If to the Borrower:
Perma-Fix Environmental Services, Inc.
0000 X.X. 00xx Xxxxx, Xxxxx X
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Chief Financial Officer
Facsimile No.: (000) 000-0000
If to the undersigned:
Xxx X. Xxxxxxxx Living Trust
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx Living Trust
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxx
with a copy to:
X'Xxxxxx & Xxxxx
000 Xxxxxxxx
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. X'Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Lender:
Congress Financial Corporation (Florida)
000 Xxxxxxxx Xxxxxx - Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx, Vice President
Facsimile No. (000) 000-0000
with a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No. (000) 000-0000
and in any case at such other address as the addressee shall have
specified by written notice as aforesaid.
13. EACH OF THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT HE OR SHE MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENTS AT ANY TIME MADE IN
CONNECTION HEREWITH, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR
THEREIN. FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF LENDER NOR LENDER'S COUNSEL HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE
EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION. FINALLY, THE UNDERSIGNED ACKNOWLEDGE THAT
THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER
ALIA, THE PROVISIONS OF THIS PARAGRAPH.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without giving
effect to principles of conflict of laws. The parties hereto
expressly consent to the jurisdiction of the state and federal
courts located in the State of Florida and agree that any
litigation arising out of or in connection with this Agreement
shall be brought in the Circuit Court of Miami-Dade County, Florida
or Federal District Court of the Southern District of Florida,
including in respect of the validity, enforceability or
interpretation hereof.
15. This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which, when taken
together, shall constitute but one agreement.
16. Neither Borrower nor any third party shall have any
rights or be entitled to any benefits under this Agreement.
17. All references to the undersigned in this Agreement (and
the obligations of the undersigned in favor of the Lender) are
deemed to be joint and several.
IN WITNESS WHEREOF, the undersigned has executed this
Agreement as of this 26th day of May, 1999.
XXX X. XXXXXXXX LIVING TRUST
By: /s/ Xxx X. Xxxxxxxx
____________________________
Name: Xxx X. Xxxxxxxx
________________________
Title: Trustee
_______________________
XXXXXX X. XXXXXXXX LIVING TRUST
By: /s/ Xxxxxx X. Xxxxxxxx
___________________________
Name: Xxxxxx X. Xxxxxxxx
______________________
Title: Trustee
_____________________
/s/ Xxxxxx X. Xxxxxxxx
_____________________________
s/
Xxxxxx X. Xxxxxxxx
/s/ Xxx X. Xxxxxxxx
______________________________
s/
Xxx X. Xxxxxxxx
The undersigned Borrower hereby consents to the foregoing
agreement and agrees to be bound by the terms and conditions
thereof.
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
_______________________________
Name: Xxxxxxx X. Xxxxxx
__________________________
Title: Vice President
__________________________
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Xxx X. Xxxxxxxx, as Trustee of the Xxx X.
Xxxxxxxx Living Trust. She is personally known to me or has
produced a ________________________ as identification.
/s/ Xxxxx Xxx Hull
______________________________
Print Name: Xxxxx Xxx Xxxx
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Xxxxxx X. Xxxxxxxx, as Trustee of the Xxxxxx X.
Xxxxxxxx Living Trust. He is personally known to me or has
produced a ________________________ as identification.
/s/ Xxxxx Xxx Hull
______________________________
Print Name: Xxxxx Xxx Xxxx
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Xxxxxx X. Xxxxxxxx, individually. He is
personally known to me or has produced a ________________________
as identification.
/s/ Xxxxx Xxx Xxxx
______________________________
Print Name: Xxxxx Xxx Hull
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
The foregoing instrument was acknowledged before me this 26th
day of May, 1999 by Xxx X. Xxxxxxxx, individually. She is
personally known to me or has produced a ________________________
as identification.
/s/ Xxxxx Xxx Hull
______________________________
Print Name: Xxxxx Xxx Xxxx
___________________
Title: Notary Public
Commission expires: 1/29/2002 ________________________
Commission No. _______________
(if any)
30061531v4
