LOAN 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”).

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”).

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.

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”):

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

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