EXHIBIT 10.1
COMPREHENSIVE SETTLEMENT AGREEMENT
THIS COMPREHENSIVE SETTLEMENT AGREEMENT (this "CSA") dated as of
September 30, 2003, is by and between SAFETY-KLEEN SYSTEMS, INC.
("Safety-Kleen"), a Wisconsin corporation and a subsidiary of Safety-Kleen
Corp., and SYSTEMONE TECHNOLOGIES INC. ("SystemOne"), a Florida corporation.
Capitalized terms used but not defined herein shall have the respective meanings
set forth in the Marketing Agreement (as defined below).
I.
RECITALS
WHEREAS, SystemOne and Safety-Kleen entered into a Second Amended and
Restated Marketing and Distribution Agreement dated as of March 8, 2001, as
amended by the First Amendment to the Second Amended and Restated Marketing and
Distribution Agreement, dated October 31, 2001 ("October 31 Amendment"), and by
Amendment No. 1, dated June 25, 2002 (collectively the "Marketing Agreement"),
pursuant to which certain disputes have arisen between them; and
WHEREAS, SystemOne and Safety-Kleen have determined that it is in their
mutual best interest to terminate the Marketing Agreement, to settle such
disputes and to enter into full and mutual releases of all claims that each may
have against the other to the extent more fully set forth herein; and
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, agreements and conditions hereinafter set forth and the mutual
benefits to be derived therefrom, the sufficiency and adequacy of which are
hereby acknowledged, the parties agree as follows:
II.
COMMERCIAL TERMS OF SETTLEMENT
A. Notwithstanding anything to the contrary contained in the
Marketing Agreement and except as set forth in subparagraphs (i) - (vi) below,
the Marketing Agreement shall be terminated as set forth in this CSA,
retroactive to October 1, 2003. Notwithstanding the foregoing:
(i) Irrespective of whether the Final Effective Date (as
defined in paragraph II(K), below) occurs, Safety-Kleen shall purchase
and pay for 264 Equivalent Units of Equipment (the "Remaining September
Units" which, together with Units taken in September 2003 prior to the
date hereof, will be in total 1,042 Units) by the end of September 2003
at a Standard Price of $1,537.00 per Unit which shall be paid not later
than October 30, 2003. If the Final Effective Date does not occur, then
the Deferred Price in respect of the Remaining September Units shall be
payable in accordance with the Marketing Agreement.
(ii) Section 4.3 [continuing right to sell, etc.], Section 6.2
[grant of license], and Section 6.5 [Termination License] of the
Marketing Agreement shall survive termination of the Marketing
Agreement in accordance with their respective terms so long as
Safety-Kleen is continuing to sell, lease or service Equipment
purchased (a) under the Marketing Agreement prior to the termination of
the Marketing Agreement, or (b) under Paragraph II(H), below. As
promptly as practicable, but in any event within 10 (ten) days of
execution of this CSA, SystemOne will deliver to Xxxxx Xxxxxxx, Esq.,
or such other shareholder at Xxxxxxxxx Traurig as may be designated by
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Xx. Xxxxxxx (the "Escrow Agent"), a list identifying each of the
suppliers of each of the component parts for the Equipment, with
appropriate contact information ("Supplier List"). Upon the filing of a
voluntary or involuntary petition for bankruptcy relief involving
SystemOne, or the decision to stop supplying Equipment parts, by reason
of a sale, dissolution, liquidation, or otherwise, Safety-Kleen may
provide notice of such event to the Escrow Agent, and the Escrow Agent
shall deliver the Supplier List to Safety-Kleen.(iii) Subject to the
general releases set forth herein, Sections 6.1 and 10
[indemnification] of the Marketing Agreement shall survive termination
of the Marketing Agreement in accordance with their respective terms,
except that upon the Final Effective Date, SystemOne's obligations
under Section 10 shall be strictly limited to Safety-Kleen's liability
in respect of death or bodily injuries to any person, destruction or
damage to any property or contamination of or adverse effects on the
environment, arising out of or resulting from any defect in the design
and manufacture of the Equipment or replacement parts sold under the
Marketing Agreement or this CSA, and SystemOne shall have no obligation
whatsoever to indemnify, defend and hold harmless Safety-Kleen under
Section 10.1 of the Marketing Agreement for the costs of inspection,
replacement or repair, or to reimburse Safety-Kleen for its inspection,
replacement or repair expenses, as contemplated in the SystemOne
Equipment Inspection and Repair Agreement dated as of July 30, 2003
("Repair Agreement"), concerning any leaks that have occurred or occur
in the future in the solvent storage tanks in the Equipment for any
Equipment supplied by SystemOne before the Final Effective Date.
(iv) Sections 7.1 through 7.5 and 7.7 through 7.10 [warranty
matters] of the Marketing Agreement shall survive termination of the
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Marketing Agreement in accordance with their respective terms. In
addition, the October 31 Amendment shall remain in full force and
effect. Specifically, SystemOne shall continue to supply any parts for
the Equipment under and to the extent of the time period set forth in
the warranty obligations set forth in the foregoing sections of the
Marketing Agreement at no cost to Safety-Kleen; and SystemOne shall
continue to provide repair and/or replacement parts for the Equipment,
for items not covered by warranty, at Safety-Kleen's cost.
(v) Section 9 [insurance] of the Marketing Agreement shall
survive termination of the Marketing Agreement in accordance with its
terms, through December 31, 2005.
(vi) Section 16 [dispute resolution] of the Marketing
Agreement shall survive termination of the Marketing Agreement with
respect to any rights and obligations of the parties surviving such
termination in accordance with this CSA.
B. The Warrant issued pursuant to Section 15 of the Marketing
Agreement is hereby cancelled as of the Final Effective Date and Safety-Kleen
shall surrender such Warrant for cancellation.
C. The Non-Competition Agreements referenced in Section 17 of
the Marketing Agreement are hereby terminated and shall be of no further force
or effect.
D. Safety-Kleen acknowledges that any right of first offer
that it might have had pursuant to Section 1.6 of the Marketing Agreement or
otherwise with respect to any New Model has expired or terminated in all
respects.
E. Safety-Kleen shall pay SystemOne an amount equal to
$14,000,000.00 (plus interest, if applicable, as set forth in this CSA) by wire
transfer to an account designated by SystemOne as follows:
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(i) $2,000,000.00, payable on Monday, October 6, 2003. If the
Final Effective Date does not occur on or before November 24, 2003,
then SystemOne may nevertheless retain such $2,000,000.00 as an
approximation of its gross profit on the manufacture and sale of
Equipment to Safety-Kleen that would otherwise be required to purchase
for the months of October, November and December, 2003 (approximately
3,120 Units) under the Marketing Agreement, and the parties will be
released from their respective obligations to manufacture and sell, and
to purchase 3,120 Units for the months of October, November and
December, 2003. Retention of such amount shall not act as a waiver of
any of the parties' claims or defenses, including any claim for
recovery of that portion of this approximation of gross profit that
would be returned to Safety-Kleen if it were to prevail in the parties'
dispute as to the Standard Price.
(ii) $1,000,000.00, payable within 11 days after the Final
Effective Date.
(iii) $7,000,000.00 (including interest, if applicable, as set
forth in subparagraph (iii)(2), below, the "$7,000,000.00 Payment"),
payable as follows:
1. If the First Amended Joint Plan of Reorganization of
Safety-Kleen Corp., and certain of its direct and
indirect subsidiaries (the "Plan of Reorganization")
becomes effective, on or before December 1, 2003, the
$7,000,000.00 Payment shall be made prior to December
31, 2003.
2. If the Plan of Reorganization does not become
effective on or before December 1, 2003, the
$7,000,000.00 Payment shall be made in three
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installments of $2,000,000.00 and a final installment
of $1,000,000.00, plus interest accruing on a daily
basis at the rate of 14% per annum on the unpaid
balance from December 31, 2003. The dates of the four
installment payments shall be December 31, 2003,
January 30, 2004, February 27, 2004 and March 31,
2004. Interest shall be calculated based on the
number of days actually elapsed from December 31,
2003 until the date of payment, assuming a year of
360 days and the accrued amount of such interest
shall be payable with each such installment.
Notwithstanding anything to the contrary set forth in
this Paragraph, if the Plan of Reorganization becomes
effective after December 1, 2003 but before March 1,
2004, then Safety-Kleen shall pay to SystemOne the
unpaid portion of the $7,000,000.00 payment
(including interest from December 31, 2003) within
thirty (30) days of the effective date of the Plan of
Reorganization.
(iv) $4,000,000.00 (the "Deferred Price Payment"), payable as
follows: $1,250,000.00 on January 30, 2004, $1,250,000.00 on February
27, 2004, and $1,500,000.00 on March 31, 2004. If the effective date of
the Plan of Reorganization has not occurred on or before December 1,
2003, then Safety-Kleen immediately shall arrange for the issuance of a
$2,000,000.00 Letter of Credit to be effective December 1, 2003 for the
benefit of SystemOne with draw instructions in substantially the same
form as set forth on Exhibit A hereto. The Letter of Credit shall be
issued by a bank reasonably acceptable to SystemOne and otherwise will
be reasonably acceptable to SystemOne. SystemOne and Safety-Kleen will
provide all reasonable cooperation in agreeing with the issuing bank on
mutually acceptable letter of credit documentation. SystemOne has the
right to apply payments as to amount owing under the CSA at its sole
discretion. In the event of any draw under the Letter of Credit,
Safety-Kleen shall cause such Letter of Credit to be reissued not later
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than the date of the next scheduled payment of an installment of the
Deferred Price Payment in amount equal to the lesser of $2,000,000.00
and the remaining balance of the Deferred Price Payment.
Upon the timely payment in full of all amounts due under this CSA, the remaining
Deferred Price with respect to Equipment purchased by Safety-Kleen prior to the
date hereof and with respect to the Remaining September Units shall be deemed
paid in full.
F. If any payment required to be made by Safety-Kleen is not
timely made in accordance with this CSA, Safety-Kleen shall pay interest thereon
accruing from the date such payment was due to the date of payment at the annual
rate of 20%. Safety-Kleen shall reimburse and indemnify SystemOne for all costs
(including, without limitation, attorneys' fees and expenses and court costs at
trial and appellate levels) incurred in collecting any unpaid amount due and
owing under this CSA.
G. The Repair Agreement is terminated in its entirety
effective upon the Final Effective Date and shall thereafter be of no force or
effect whatsoever. SystemOne will continue with its inspection and repair
obligation as to any Customer Washers as to which notice has been provided to
SystemOne on or before October 17, 2003, pursuant to the Repair Agreement.
Safety-Kleen may retain from the $1,000,000 payment (set forth in Paragraph
II(E)(ii)) as liquidated damages an amount equal to $200 for each Customer
Washer that has not been timely inspected and repaired. Irrespective of whether
the Final Effective Date occurs, and after execution of this CSA, Safety-Kleen
shall only provide notice of Customer Washers that are leaking under normal
operating conditions. If the Final Effective Date does not occur, neither party
may assert as an admission by the other party that such $200 amount is an
appropriate measure of damages, in connection with any dispute relating to the
Marketing Agreement or the Repair Agreement.
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H. SystemOne agrees that during 2005 Safety-Kleen shall have
the right, but not the obligation, to purchase up to the lesser of (x) 3000
Series 500 parts washers (or equivalent model then being manufactured by
SystemOne) and (y) a number of such parts washers equal to 16.7% of the annual
production capacity of SystemOne with respect to such washers at a purchase
price and on terms equal to the most favorable price and terms provided by
SystemOne to any customer at the time Safety-Kleen elects to exercise such
right. This obligation shall be binding on any successor-in-interest to
SystemOne. If SystemOne or any successor in interest does not continue to
manufacture such Equipment, and if SystemOne or any successor licenses or
contracts out such manufacture to another entity, then this obligation shall be
binding on any such licensee or third party.
I. SystemOne, at its sole expense, shall provide to
Safety-Kleen 1,500 retrofit kits and 500 new holding tanks within thirty (30)
days after execution of this CSA.
J. Safety-Kleen shall use its best efforts to obtain the
approval of this CSA by the Bankruptcy Court as expeditiously as practicable.
K. Upon payment of the $2,000,000 set forth in Paragraph
II(E)(i), the Marketing Agreement is and shall be terminated, and of no further
force and effect (except as set forth in Paragraph II(A)), (and accordingly, the
Repair Agreement is and shall be terminated, except as set forth in Paragraph
II(G)), as of the date of such payment. If the Final Effective Date does not
occur by December 31, 2003, then except as set forth in Paragraphs II(A)(i) and
II(E)(i), this CSA shall be null and void and of no further effect, and the
Marketing Agreement and the Repair Agreement shall be reinstated, and the
parties shall have the same rights and obligations that each had prior to
execution of this CSA, provided that all time periods for performance of such
agreements shall be deemed to have been tolled from the date of this CSA until
December 31, 2003. For purposes hereof, the "Final Effective Date" means the
first business day after the first to occur of (1) the date upon which the
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Bankruptcy Court shall have (i) entered an order (the "Order") pursuant to
Sections 363(b) of the Bankruptcy Code, authorizing and directing Safety-Kleen
to enter into this CSA and to perform all transactions contemplated by this CSA,
and (ii) such Order shall (x) have become final and non-appealable and as to
which there is no action or proceeding by or before any court (including but not
limited to appeals or motions for rehearing or reconsideration) or other
governmental body or agency which seeks to restrain, prohibit or invalidate the
transactions contemplated by this CSA, or which might affect the obligation of
Safety-Kleen to perform all of its obligations under the CSA, (y) contain such
other findings and conclusions necessary or appropriate in a transaction of this
type, and (z) be reasonably satisfactory to SystemOne, and (2) the date upon
which SystemOne shall have waived all of the conditions set forth in the
preceding sub-clauses (1)(x), (y) and (1)(z), it being recognized that each such
condition is intended for the sole benefit of SystemOne and, as such, SystemOne
may waive any such condition. If SystemOne waives the preceding subclause (x),
and if the Bankruptcy Court's order approving this CSA is reversed on appeal,
without further possibility of appeal, then SystemOne shall reimburse
Safety-Kleen for any and all amounts paid under this CSA (except for the
$2,000,000 payment set forth in Paragraph II(E)(i)).
L. SystemOne agrees and acknowledges that it has filed no
proof of claim in the pending Safety-Kleen bankruptcy action and SystemOne
hereby waives any and all rights to any additional recovery against Safety-Kleen
or any of its affiliated debtors in their bankruptcy cases.
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III.
RELEASES
A. SAFETY-KLEEN'S RELEASE.
Safety-Kleen, on behalf of itself and its predecessors,
successors, parents, subsidiaries, affiliates and divisions, as well as its
present, former and future shareholders, investors, partners, principals,
owners, employees, advisors, officers, directors, managers, assigns,
consultants, and any other person, entity, representative or agent acting or
purporting to act for or on its behalf, and any and all other persons, entities
or parties that may be in privity or allied in interest with it, all in their
capacity as such, hereby releases and forever discharges SystemOne, and its
predecessors, successors, parents, subsidiaries, affiliates and divisions, as
well as its present, former and future shareholders, investors, partners,
principals, owners, employees, advisors, officers, directors, managers, assigns,
consultants, and any other person, entity, representative or agent acting or
purporting to act for or on its behalf, and any and all other persons, entities
or parties that may be in privity or allied in interest with it, from liability
for any and all claims, controversies or causes of action of any kind or nature
which Safety-Kleen may have, now has, or ever had against SystemOne, including
but not limited to, all other demands, actions, causes of action, controversies,
declaratory judgment actions, cross-claims, counterclaims, debts, arbitration
demands, liquidated damages, common law claims, statutory claims, costs,
expenses, attorneys' fees, compensatory and punitive damages, compensation,
obligations, contract actions, quasi-contract actions, tort actions, equitable
actions, controversies, and liabilities of any and every nature whatsoever in
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law or in equity both past or present, and whether known or unknown, suspected
or claimed, matured or unmatured, and whether or not contingent, which
Safety-Kleen ever had, now has, or which Safety-Kleen may have had against
SystemOne, except for the obligations set forth in this CSA. THE RELEASE IN THIS
PARAGRAPH III(A) IS A GENERAL RELEASE AND THE PARTIES INTEND AND AGREE THAT IT
SHALL BE INTERPRETED, CONSTRUED AND ENFORCED AS SUCH.
B. SYSTEMONE'S RELEASE.
SystemOne, on behalf of itself and its predecessors,
successors, parents, subsidiaries, affiliates and divisions, as well as its
present, former and future shareholders, investors, partners, principals,
owners, employees, advisors, officers, directors, managers, assigns,
consultants, and any other person, entity, representative or agent acting or
purporting to act for or on its behalf, and any and all other persons, entities
or parties that may be in privity or allied in interest with it, all in their
capacity as such, hereby releases and forever discharges Safety-Kleen, and its
predecessors, successors, parents, subsidiaries, affiliates and divisions, as
well as its present, former and future shareholders, investors, partners,
principals, owners, employees, advisors, officers, directors, managers, assigns,
consultants, and any other person, entity, representative or agent acting or
purporting to act for or on its behalf, and any and all other persons, entities
or parties that may be in privity or allied in interest with it, from liability
for any and all claims, controversies or causes of action of any kind or nature
which SystemOne may have, now has, or ever had against Safety-Kleen, including
but not limited to, all other demands, actions, causes of action, controversies,
declaratory judgment actions, cross-claims, counterclaims, debts, arbitration
demands, liquidated damages, common law claims, statutory claims, costs,
expenses, attorneys' fees, compensatory and punitive damages, compensation,
obligations, contract actions, quasi-contract actions, tort actions, equitable
actions, controversies, and liabilities of any and every nature whatsoever in
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law or in equity both past or present, and whether known or unknown, suspected
or claimed, matured or unmatured, and whether or not contingent, which SystemOne
ever had, now has, or which SystemOne may have had against Safety-Kleen, except
for the obligations set forth in this CSA. THE RELEASE IN THIS PARAGRAPH III(B)
IS A GENERAL RELEASE AND THE PARTIES INTEND AND AGREE THAT IT SHALL BE
INTERPRETED, CONSTRUED AND ENFORCED AS SUCH.
IV.
FURTHER TERMS, COVENANTS AND PROVISIONS
A. The parties hereto understand, acknowledge and agree that, by
entering into 18 0 this CSA, no party is admitting any liability or wrongdoing
to any other party, but that this CSA instead is made by and between them solely
as a compromise and for the purpose of settling their disputes, controversies
and differences.
B. The parties agree to the following with respect to confidentiality:
1. Except as required by law or judicial process, any
Confidential Information (as defined below), whether oral or written, disclosed
or given to or discussed with SystemOne by Safety-Kleen will not be disclosed to
any person or entity, in any way or form, unless approved by Safety-Kleen prior
to such disclosure by SystemOne; provided, however, that SystemOne shall be
entitled to disclose such Confidential Information to its directors, employees,
agents, counsel, accountants, sources of financing or other representatives
(collectively, "Representatives") with a need to know such Confidential
Information in connection with the performance or administration of this CSA
provided that such Representatives agree to the requirements to maintain the
confidentiality of such Confidential Information in accordance with this
Paragraph IV(B).
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2. Except as required by law or judicial process, any
Confidential Information, whether oral or written, disclosed or given to or
discussed with Safety-Kleen by SystemOne will not be disclosed to any person or
entity, in any way or form, unless approved by SystemOne prior to such
disclosure by Safety-Kleen; provided, however, that Safety-Kleen shall be
entitled to disclose such Confidential Information to its Representatives with a
need to know such Confidential Information in connection with the performance or
administration of this CSA provided that such Representatives are advised of the
requirements to maintain the confidentiality of such Confidential Information in
accordance with this Paragraph IV(B).
3. For purposes of this Paragraph IV(B), Confidential
Information of a party means information of that party which is marked or
otherwise identified as being confidential; provided, however, that Confidential
Information shall not include (i) information that is publicly available without
a breach hereof; (ii) information which was already in the receiving party's
possession prior to the date hereof other than such information which is subject
to a prior confidentiality agreement; (iii) information received from a third
party on a non-confidential basis provided that such third party is not in
breach of any obligation of confidentiality; and (iv) information independently
developed by such party not having had access to such Confidential Information.
Each party shall be responsible for any breach by its Representatives of this
Paragraph IV(B).
4. In the event that a party is requested pursuant to, or
required by, applicable law, rule or regulation or by legal process to disclose
any Confidential Information of the other party, such party agrees to
immediately provide the other party with notice of such request to enable the
other party to seek an appropriate protective order. In the event such
protective order or other remedy is not obtained, the parties agree to furnish
only that portion of the Confidential Information which in the opinion of
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counsel is legally compelled to be disclosed and to use their reasonable best
efforts to obtain assurance that if possible, confidential treatment will be
accorded such Confidential Information. Nothing contained herein shall prohibit
a party from disclosing this CSA as may be required by law or regulation or as
may be necessary to obtain any consent or approval required for the performance
of this CSA by such party. Safety-Kleen acknowledges that SystemOne will file
this CSA with the Securities and Exchange Commission as a material agreement.
Any press release or statement issued by either of the parties shall not contain
any statement to the effect that the other party failed to perform under the
Marketing Agreement, and shall not include any defamatory statements regarding
the other party's performance under the Marketing Agreement, or actions
regarding any leaking Washers, as set forth in the Repair Agreement. Each party
may enforce this Paragraph IV(B) against the other through appropriate court
proceedings seeking injunctive or other equitable relief.
5. Notwithstanding the foregoing, the parties recognize and
acknowledge that this CSA is not confidential, and it shall be disclosed to and
filed with the Bankruptcy Court.
C. Safety-Kleen affirmatively warrants and represents that the person
signing this CSA on its behalf has full power and/or authority to bind
Safety-Kleen to all terms of this CSA.
D. SystemOne affirmatively warrants and represents that the person
signing this CSA on its behalf has full power and/or authority to bind SystemOne
to all terms of this CSA.
E. Safety-Kleen and SystemOne each waive any and all rights of offset
or recoupment.
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F. The parties affirmatively warrant and represent to one another that
they received independent legal advice with respect to the advisability of
entering into this CSA and of making the covenants, representations, warranties
and promises provided for herein and signing this CSA, that they have relied
solely upon their own independent judgment and advice of their legal counsel
regarding the proper, complete and agreed upon consideration for and language of
this CSA.
G. This CSA and the letter dated September 22, 2003, confirming the
parties' agreement to toll the then pending deadlines for arbitration and the
pricing dispute, constitute the full understanding of the parties, a complete
allocation of risks between them and a complete and exclusive statement of the
terms and conditions of their agreement; and all prior agreements, negotiations,
dealings and understandings, whether written or oral, regarding the subject
matter hereof, to the extent any portion thereof survives, are superseded by
this CSA and such contemplated agreements. Additionally, any terms and/or
conditions contained in any purchase order, oral or written, or in SystemOne's
standard warranty policy, inconsistent with any terms and/or conditions set
forth herein shall be of no force and effect unless consented to in writing by
the party to be charged.
H. Time is of the essence in the performance of this CSA.
I. No conditions, usage of trade, course of dealing or performance,
understanding or agreement purporting to modify, vary, explain or supplement the
terms or conditions of this CSA shall be binding unless hereafter made in
writing and signed by the party to be bound, and no modification shall be
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affected by the acknowledgment or acceptance of any forms containing terms or
conditions at variances with or in addition to those set forth in this CSA. This
CSA may be amended only by a written agreement executed by the parties hereto.
J. No waiver by either party with respect to any breach or default or
of any right or remedy and no course of dealing or performance shall be deemed
to constitute a continuing waiver of any other breach or default or of any other
right or remedy, unless such waiver be expressed in writing signed by the party
to be bound.
K. Section or Paragraph headings as to the contents of particular
Sections and Paragraphs are for convenience only and are in no way to be
construed as part of this CSA or as a limitation of the scope of the particular
Sections or Paragraphs to which they refer.
L. In the event any term or provision of this CSA, or any portion
thereof, or any application of any term or provision shall be invalid or
unenforceable, the remainder of this CSA or any other application of such term
or provision shall not be affected thereby.
M. All rights conferred by this CSA shall be binding upon, inure to the
benefit of, and be enforceable against the respective permitted successors and
assigns of the parties hereto including, but not limited to, any trustee or
other responsible officer or estate representative appointed for a party in a
case under any chapter of the United States Bankruptcy Code.
N. The parties hereto understand, acknowledge and agree that they may
hereafter discover facts in addition to, or different from, those that they now
know or believe to be true with respect to the subject matter of this CSA.
Nevertheless, it is their intention to resolve their disputes pursuant to the
terms of the CSA and thus, in furtherance of their intentions, the CSA shall
remain in effect, notwithstanding the discovery or existence of any such
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additional facts, and this CSA shall not be subject to rescission or
modification by reason of any change or difference in facts.
O. The parties hereto understand, acknowledge and agree that the law
applicable to the facts with respect to which this CSA is entered may hereafter
be discovered to be other or different from the law now known or believed to be
applicable to the facts as of this date. Safety-Kleen or SystemOne each herby
accept and assume the risks that the law applicable to the facts may be other or
different from their current understanding or beliefs and agree that this CSA
shall be and remain in all respects effective, and not subject to rescission or
modification by reason of any change or difference in the applicable law.
P. For purposes of construction of the terms of this CSA, neither party
shall be deemed the drafter hereof.
Q. This CSA, all questions relating to its validity, interpretation,
performance and enforcement and all sales hereunder shall be governed by and
construed in accordance with the laws of the State of New York, notwithstanding
any conflict-of-laws doctrines of such state or other jurisdiction to the
contrary, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
R. If the parties should have a material dispute arising out of or
relating to this CSA or the parties' respective rights and duties hereunder,
then the parties will resolve such dispute in the following manner: (i) any
party may at any time deliver to the other a written dispute notice setting
forth a brief description of the issue for which such notice initiates the
dispute resolution mechanism contemplated by this Paragraph; (ii) during the
twenty (20) day period following the delivery of the notice above, appropriate
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representatives of the various parties will meet and seek to resolve the
disputed issue through negotiation; (iii) if representatives of the parties are
unable to resolve the disputed issue through negotiation, then within ten (10)
days after the period described above, the parties will refer the issue (to the
exclusion of a court of law) to final and binding arbitration in Miami, Florida
in accordance with the then existing rules for expedited arbitration (the
"Rules") of the American Arbitration Association ("AAA"), and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof; provided, however, that the law applicable to any
controversy shall be the law of the State of New York, regardless of principles
of conflicts of laws. In any arbitration pursuant to this Agreement, the award
or decision shall be rendered by a majority of the members of a Board of
Arbitration consisting of three (3) members, one of whom shall be appointed by
each of the respective parties and the third of whom shall be the chairman of
the panel and shall be appointed by mutual agreement of said two party-appointed
arbitrators. In the event of failure of said two arbitrators to agree within
twenty (20) days after the commencement of the arbitration proceeding upon the
appointment of the third arbitrator, the third arbitrator shall be appointed by
the AAA in accordance with the Rules. In the event that either party shall fail
to appoint an arbitrator within ten (10) days after the commencement of the
arbitration proceedings, such arbitrator and the third arbitrator shall be
appointed by the AAA in accordance with the Rules. Nothing set forth above shall
be interpreted to prevent the parties from agreeing in writing to submit any
dispute to a single arbitrator in lieu of a three (3) member Board of
Arbitration. Upon the completion of the selection of the Board of Arbitration
(or if the parties agree otherwise in writing, a single arbitrator), an award or
decision shall be rendered within no more than thirty (30) days. Notwithstanding
the foregoing, the request by either party for preliminary or permanent
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injunctive relief, whether prohibitive or mandatory, shall not be subject to
arbitration and may be adjudicated only by the courts of the State of Florida or
the U.S. District Court for the Southern District of Florida.
S. All notices, requests, approvals and other communications required
or permitted under this CSA shall be in writing and shall be given by: (i)
facsimile transmission (to be confirmed by the means set forth in the following
clause (ii)); or (ii) nationally recognized overnight courier (with confirmation
of delivery) to the appropriate party to the following addresses or to such
other addresses as the respective party hereto may hereafter designate to such
effect by notice to the other party:
SYSTEMONE: SystemOne Technologies Inc.
0000 X.X. 00xx Xxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Chief Executive Officer
Fax No.: (000) 000-0000
SAFETY-KLEEN: Safety-Kleen Corp.
Safety-Kleen Corp.
0000 Xxxxxx Xxxxx
Xxxxxxx XX, Xxxxxxxx 0
Xxxxx, XX 00000
Attn: Xx Xxxxxxxxx
Fax No.: (000) 000-0000
Copy to: Xxxxxxx Xxxxx, Esq.
Shook, Hardy & Bacon, L.L.P.
000 X. Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
Fax No.: (000) 000-0000
ESCROW AGENT: Xxxxx Xxxxxxx, Esq.
Xxxxxxxxx Traurig
0000 Xxxxxxxx Xxx.
Xxxxx, XX 00000
Fax. No. (000) 000-0000
19
Such notices and communications shall be effective: (i) if given by facsimile
transmission, when sent addressed as set forth above and transmission is
confirmed; or (ii) if by overnight courier, two business days after deposit
therewith.
T. This CSA may be executed in identical duplicate copies. The parties
agree to execute at least two identical original copies of this CSA. Each
identical counterpart shall be deemed an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned agree to this CSA and signify their
acceptance and approval thereof, and all provisions contained therein. This CSA
is effective as of the day, month and year above written.
SYSTEMONE TECHNOLOGIES INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
SAFETY-KLEEN SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
Agreement as to obligations as Escrow Agent:
XXXXX XXXXXXX, ESQ.
By: /s/ Xxxxx Xxxxxxx
----------------------
Xxxxx Xxxxxxx, Esq.
20
EXHIBIT A
IRREVOCABLE STANDBY LETTER OF CREDIT
LETTER OF CREDIT NO. ________
ISSUER: [insert name] (hereinafter, "Issuer")
BENEFICIARY: SystemOne Technologies Inc. and its successors and assigns
PLACE AND
DATE OF ISSUE:
-------------------
-------------------
EXPIRATION
DATE: April 1, 2004. Prior to the expiration of this Letter of Credit
as provided herein, this Letter of Credit shall be irrevocable.
For the account of our customer, Safety-Kleen System, Inc., we hereby
irrevocably issue in your favor our Irrevocable Standby Letter of Credit No.
_______ for an amount of Two Million and No/100 U.S. Dollars
(U.S.$2,000,000.00), and we acknowledge and agree that all drafts drawn under
and in compliance with the terms of this credit will be fully honored by us if
presented for payment at any time up to and including the expiration date, as
such expiration date may be automatically extended.
This Letter of Credit is available for payment against presentation to us of
your sight draft in the form attached hereto as Annex A, mentioning our letter
of credit number and date, accompanied by a notarized certificate purportedly
signed by an authorized representative of SystemOne Technologies, Inc., or any
successor or assignee stating under penalty of perjury that Safety-Kleen
Systems, Inc. has failed to timely make one of the Deferred Price Payments, and
that SystemOne is entitled to present this Letter of Credit for payment, all
pursuant to the terms of the Comprehensive Settlement Agreement dated September
__, 2003 between Safety-Kleen Systems, Inc., and SystemOne Technologies, Inc.
This Letter of Credit is subject to the "Uniform Customs and Practices for
Documentary Credits (1993 Revision) International Chamber of Commerce,
Publication No. 500" (the "UCP 500") except that we specifically waive the
provisions of Article 45 (Hours of Presentation) of the UCP 500. To the extent
the provisions of this Letter of Credit are not governed by the UCP 500, this
Letter of Credit shall be governed by the laws of the State of New York without
regard to its conflicts of laws principles.
We hereby engage with you that drafts drawn under and in compliance with the
terms of this credit will be duly honored upon presentation to [insert name and
address].
[ISSUER]
By:
---------------------------------
Authorized Signatory
ANNEX A
TO STANDBY LETTER OF CREDIT
[ON BENEFICIARY STATIONERY]
DEMAND FOR SIGHT PAYMENT
To: [Name and address of the Issuer]
Attention: [Mr.____ / Mr. ____]
RE: IRREVOCABLE STANDBY LETTER OF CREDIT NO. [ ] DATED [ ]
The undersigned, a duly authorized officer of SystemOne
Technologies, Inc., a corporation organized under the laws of the State of
[Florida] (the "Beneficiary"), in connection with, and under the terms of, the
Comprehensive Settlement Agreement dated September __, 2003 between Safety-Kleen
Systems, Inc. and the Beneficiary (the "Agreement"), hereby certifies to
________________ (the "Issuer"), with reference to the Issuer's irrevocable
Standby Letter of Credit No. [ ] dated ____, 2003 (the "Letter of Credit"),
issued by the Issuer by order and for account of Safety-Kleen Systems, Inc. (the
"Applicant"), as follows:
1. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Letter of Credit.
2. The Beneficiary hereby demands payment (the "Drawing") from
the Issuer under the Letter of Credit in the aggregate amount of two million and
no/100 U.S. dollars (U.S. $2,000,000.00).
3. The Beneficiary hereby delivers to the Issuer a notarized
certificate signed by an authorized representative of the Beneficiary stating
under penalty of perjury that (i) the Applicant has failed to timely make one of
the Deferred Price Payments (as such term is defined in the Agreement), and (ii)
the Beneficiary is entitled to present the Letter of Credit for payment, all
pursuant to the terms of the Agreement (such notarized certificate is attached
to this Demand for Sight Payment).
4. Please wire transfer the amount of the Drawing to [account
details to be inserted by Beneficiary].
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this certificate
as of the [____] day of [_______________]
SYSTEMONE TECHNOLOGIES INC.
By:
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Title:
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