EXHIBIT 99.1
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WARRANT REDEMPTION AGREEMENT
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THIS WARRANT REDEMPTION AGREEMENT (this "AGREEMENT") is made and
entered into as of the 17th day of February, 2004, by and between AMERICAN
ECOLOGY CORPORATION, a Delaware corporation ("AEC"), and JPMORGAN CHASE BANK, a
New York state chartered bank (the "BANK"). AEC and the Bank are sometimes
referred to herein as the "PARTIES," and each individually, as a "PARTY."
R E C I T A L S:
WHEREAS, AEC issued to Chase Bank of Texas, National Association, the
Bank's predecessor-in-interest a Warrant, dated November 19, 1998, to purchase
1,349,843 shares of AEC common stock (the "WARRANT"); and
WHEREAS, AEC desires to purchase and redeem the Warrant from the Bank, and
the Bank desires to sell and transfer the Warrant to AEC, all on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. PURCHASE AND SALE. The Bank hereby sells, assigns, transfers, conveys
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and delivers the Warrant to AEC, and AEC hereby redeems, purchases and accepts
the Warrant from the Bank. The purchase price ("PURCHASE PRICE") for the
Warrant shall be Five Million Five Hundred Thousand Dollars ($5,500,000).
2. CLOSING. The closing of the purchase and redemption of the Warrant
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(the "CLOSING") shall take place concurrently with the execution and delivery of
this Agreement. At Closing, AEC shall pay the Purchase Price for the Warrant in
immediately available funds, by wire transfer to an account identified by the
Bank in writing, upon physical surrender by the Bank to AEC of the originally
executed Warrant for cancellation. The Closing of the transaction shall be
administered by Stoel Rives llp, 000 X. Xxxxxxx Xxxx., Xxxxx 0000, Xxxxx, XX
00000, Attention: Xxxx X. Xxxx, Esq. ("ESCROW HOLDER"). The Parties shall
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forward fully executed copies of this Agreement via facsimile transmission to
Escrow Holder at (000) 000-0000. In addition, each Party shall provide, via
overnight express mail, two (2) fully executed originals of this Agreement to
Escrow Holder; and the Bank shall forward the originally executed Warrant. Upon
receipt of each of the foregoing, the Closing shall occur and Escrow Holder (i)
shall instruct AEC to wire transfer the Purchase Price to AEC, (ii) shall
forward originally executed copies of this Agreement to the parties; and (iii)
shall forward the originally executed Warrant to AEC.
3. MUTUAL RELEASE. In consideration of the Purchase Price, and the other
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covenants and agreements of the Parties contained herein, each Party hereby
forever releases, discharges and acquits the other Party, including such Party's
successors, predecessors, parents, affiliates, subsidiaries, divisions,
including but not limited to, such Party's past or present officers, directors,
stockholders, managers, employees, advisors, consultants, insurers, attorneys,
accountants, agents and assigns (collectively, the "RELEASED PARTIES") from and
against any and all claims, demands, damages, debts, liabilities, actions,
causes or action or suits of any kind arising out of the Warrant, including
without limitation, all claims, whether known, unknown, unforeseen or
unanticipated and regardless of type, cause or nature, whether in tort or
contract; provided, however, that the foregoing releases shall not affect (i)
any claims arising out of the failure of performance or breach of this Agreement
by a Party; or (ii) any liabilities, obligations or causes of action that
currently exist with respect to any other contract or agreement between the
Parties, or which may arise out of any such other contract or agreement between
the Parties.
4. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
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4.1 REPRESENTATIONS AND WARRANTIES OF THE BANK. The Bank hereby
represents and warrants to AEC as follows:
(a) TITLE. Except as specifically provided in the Warrant, the
Bank owns the Warrant free and clear of all liens and encumbrances and has
the legal right and power to sell and transfer the Warrant to AEC. The Bank
has not granted any option or other right with respect to the Warrant, or
agreed to sell or transfer the Warrant to any person or entity other than
AEC.
(b) VALUE. The Bank acknowledges and agrees that the Parties
have determined that the Purchase Price represents fair value for the
Warrant; and that no adjustment in the Purchase Price shall be made
regardless of the future performance of AEC or its common stock.
(c) SOPHISTICATION. The Bank, either alone or with the
assistance of its professional (including legal) advisors, is a
sophisticated seller, and has the capacity to protect its own interests in
connection with the transactions contemplated by this Agreement, and has
such knowledge and experience in financial and business matters that the
Bank is capable of evaluating the merits and risks of the transactions
contemplated hereby.
(d) AUTHORITY. The Bank has full corporate power and authority
to execute and deliver this Agreement and perform its obligations
hereunder. The execution and delivery by the Bank of this Agreement, the
performance by the Bank of its obligations hereunder, and the consummation
by the Bank of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of the Bank. This Agreement
constitutes a valid and binding obligation of the Bank, enforceable against
it in accordance with its term, except to the extent that enforceability is
subject to and limited by the effect of bankruptcy, insolvency,
reorganization, arrangement and moratorium laws and general principles of
equity (whether asserted in an action at law or in equity) (the "EQUITABLE
EXCEPTIONS").
(e) NO CONFLICT. Neither the execution and delivery by the Bank
of this Agreement, the performance by the Bank of its obligations
hereunder, nor the consummation of the transactions contemplated hereby
will (i) violate, conflict with, or result in any breach of, any provision
of the Bank's charter documents; or (ii) violate, conflict with, result in
any breach of or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under any material
contract or agreement, or judgment or order to which the Bank is a party or
by which it is bound; or (iii) result in the creation of any lien or
encumbrance on the Warrant; or (iv) violate any applicable law, statute,
rule, ordinance or regulation of any governmental or judicial body.
(f) NO CONSENTS. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or judicial body
or authority is required for the execution, delivery and performance by the
Bank of this Agreement or for the consummation of the transactions
contemplated hereby; and no consent, approval, or authorization of any
third party is required for the execution, delivery and performance by the
Bank of this Agreement or for the consummation by the Bank of the
transactions contemplated hereby.
4.2 REPRESENTATIONS AND WARRANTIES OF AEC. AEC hereby represents and
warrants to the Bank as follows:
(a) AUTHORITY. AEC has full corporate power and authority to
execute and deliver this Agreement and perform its obligations hereunder.
The execution and delivery by AEC of this Agreement, the performance by AEC
of its obligations hereunder, and the consummation by AEC of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action of AEC. This Agreement constitutes a valid and binding
obligation of AEC, enforceable against it in accordance with its term,
except to the extent that enforceability is subject to and limited by the
effect of the Equitable Exceptions.
(b) NO CONFLICT. Neither the execution and delivery by AEC of
this Agreement, the performance by AEC of its obligations hereunder, nor
the consummation of the transactions contemplated hereby will (i) violate,
conflict with, or result in any breach of, any provision of AEC's charter
documents; or (ii) violate, conflict with, result in any breach of or
constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under any material contract or agreement,
or judgment or order to which AEC is a party
or by which it is bound; or (iii) violate any applicable law, statute,
rule, ordinance or regulation of any governmental or judicial body.
(c) NO CONSENTS. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or judicial body
or authority is required for the execution, delivery and performance by AEC
of this Agreement or for the consummation of the transactions contemplated
hereby; and no consent, approval, or authorization of any third party is
required for the execution, delivery and performance by AEC of this
Agreement or for the consummation by AEC of the transactions contemplated
hereby, except for any such third-party consents which have been obtained
by AEC prior to Closing.
(d) AEC is acquiring the Warrant from the Bank based upon AEC's
own judgment, and, except as otherwise specifically set forth in this
Agreement, not based upon any representation or warranty made to AEC by
Bank or anyone acting on its behalf.
(e) AEC covenants and agrees that the Warrant shall not be
re-issued, sold, transferred, or otherwise disposed of without registration
under the Securities Act of 1933 ("SECURITIES ACT") or an exemption
therefrom, and that in the absence of either an effective registration
statement covering the Warrant (or the AEC common stock issued on exercise
thereof) or an available exemption from registration under the Securities
Act, the Warrant (and any AEC common stock issued on exercise thereof) must
be held indefinitely.
(f) AEC has furnished or otherwise made available to Bank copies
of its (i) Annual Report on Form 10-K for the fiscal year ended December
31, 2002, and (ii) Quarterly Report on Form 10-Q for the quarter ended
September 30, 2003 (collectively, the "AEC SEC REPORTS" ). As of their
respective dates, the AEC SEC Reports complied in all material respects
with the applicable requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, and in each
case, at the time filed, did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
4.3 NO OTHER REPRESENTATIONS AND WARRANTIES. EXCEPT AS SPECIFICALLY
SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING WITHOUT LIMITATION, ANY
REPRESENTATIONS AND WARRANTIES RELATING TO OR ARISING OUT OF APPLICATION OF
FEDERAL AND STATE SECURITIES LAWS.
5. GENERAL PROVISIONS.
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5.1 ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
and supersedes all prior agreements and understandings, oral and written,
between the Parties hereto with respect to the subject matter hereof.
5.2. COSTS. AEC and the Bank each shall be solely responsible for
and bear all of their own respective expenses including, without limitation,
expenses of legal counsel in connection with pursuing or consummating this
Agreement and the transactions contemplated thereby.
5.3 PUBLIC DISCLOSURE. Except as may be required by applicable law,
regulation or legal process, pending the closing, neither AEC nor the Bank,
without the consent of the other party, will make any announcement or disclosure
about the transaction contemplated hereby to the public, or to any other person
or entity, except that the parties
may disclose such information to their representatives (subject to the
provisions of any confidentiality agreement between the parties) and regulatory
agency officials as reasonably required to consummate the transaction.
5.4 SECTIONS AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
5.5 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of New York, without regard to conflicts of law
principles.
5.6 NO WAIVER. The failure of a Party to exercise any of its rights
hereunder shall not constitute a waiver of any other rights that may
subsequently arise under the provisions of this Agreement. No waiver of any
breach or condition of this Agreement shall be deemed to be a waiver of any
other or subsequent breach or condition, whether of like or different nature.
5.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, permitted assigns, and transferees by operation of law, whether or
not any such person shall have become a party to this Agreement
5.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. Any counterpart may be delivered
by facsimile transmission; provided, however, that attachment thereof shall
constitute the representation and warranty of the person delivering such
signature that such person has full power and authority to attach such signature
and to deliver this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized agents as of the date and year first set forth above.
AEC: AMERICAN ECOLOGY CORPORATION
By: /S/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President and CEO
BANK: JPMORGAN CHASE BANK
By: /S/ Xxxxx X. Shilcutt
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Xxxxx X. Shilcutt
Vice President
