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EXHIBIT 99.5
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is dated and effective as of November
13, 1996, and is entered into by and among (i) American Ecology Corporation, a
Delaware corporation (the "Company"), (ii) Edward F. Heil ("Heil"), and (iii)
Rotchford Barker ("Barker") (the individuals identified in clauses (ii) through
(iii) being herein referred to collectively as "Purchasers" and severally as
"Purchaser").
In consideration of the agreements and undertakings of the parties
hereinafter set forth, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows.
1. Purchase and Sale of Securities. Subject to the terms and conditions
set forth in this Agreement the Company will issue and sell to each Purchaser
on the date hereof and each Purchaser will purchase from the Company on the
date hereof the number of shares of Series E Preferred Stock (as hereinafter
defined) specified on Schedule 1 and (b) the number of Warrants (as hereinafter
defined) specified on Schedule 1 of the Company (collectively the Series E
Preferred Stock, the Warrants and any common stock issued in respect of the
foregoing are sometimes referred to as the "Securities"). The aggregate
purchase price of each (i) one share of Series E Preferred Stock and (ii) ten
Warrants shall be $10.00, which shall be paid to the Company in cash. The
obligations of the respective Purchasers to purchase shares of Series E
Preferred Stock and Warrants pursuant to this Agreement are several, and not
joint. The purchase and sale of the shares of Series E Preferred Stock and
Warrants shall occur at the offices of Jenner & Block, Chicago, Illinois not
later than the close of business on the date hereof, or at such other time and
place as may be agreed to by all of the parties to this Agreement. As used in
this Purchase Agreement, the term "Series E Preferred Stock" means a series of
preferred stock of the Company established by the Certificate of Designation,
Preferences and Rights of Series E Redeemable Convertible Preferred Stock of
American Ecology Corporation (the "Certificate of Designation") attached hereto
as Exhibit A. As used in this Agreement, the term "Warrant" means a warrant to
purchase common stock of the Company in the form attached hereto as Exhibit B.
2. Representations of the Company. The Company represents and warrants
to each Purchaser as follows:
2.1 The Company has all requisite corporate power and authority to
enter into this Agreement and to perform all the obligations required to be
performed by the Company under this Agreement.
2.2 This Agreement has been duly executed and delivered by the
Company, and, upon execution and delivery by the Purchasers, this Agreement
will be the valid and legally binding obligation of the Company, enforceable as
to the Company in accordance with its terms except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting enforcement of creditors' rights and
equitable remedies.
2.3 All shares of Series E Preferred Stock being issued shall be, all
Warrants being issued shall be, and all shares of common Stock issuable
pursuant to such Warrants ("Underlying Common Shares") shall be upon issuance
of such Underlying Common Shares, duly authorized, validly issued, fully paid
and nonassessable and issued without violation of and not subject to any
preemptive right; and a number of shares of authorized and unissued Common
Stock of the Company equal to the number of such Underlying Common Shares shall
have been reserved for issuance on or before July 1, 1997.
3. Representations of Purchasers. Each Purchaser, severally and not
jointly, represents and warrants to the Company as to himself as follows:
3.1. Such Purchaser has all requisite authority to enter into this
Agreement and to perform all the obligations required to be performed by such
Purchaser under this Agreement. This Agreement has been duly executed and
delivered by such Purchaser, and, upon execution and delivery by the Company
and the other Purchasers, this Agreement will be the valid and legally binding
obligation of such Purchaser, enforceable as to such Purchaser in accordance
with its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights and equitable remedies.
3.2. Neither the Company nor any person acting or purporting to act
on behalf of the Company has offered or sold any of the Securities to such
Purchaser by means of any form of general solicitation or general advertising.
Such Purchaser is acquiring the Securities to be purchased by such Purchaser
under this Agreement solely for his own beneficial
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account, for investment purposes, and not with any view to, or for resale in
connection with, any distribution of any such Securities. Such Purchaser
understands that the Securities have not been registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws, by reason of
specific exemptions under the provisions thereof which depend in part upon the
investment intent of such Purchaser and upon the accuracy of the other
representations made by such Purchaser in this Agreement. Such Purchaser
understands that the Company is relying upon the representations and agreements
contained in this Agreement for the purpose of determining that the
transactions contemplated by this Agreement meet the requirements for such
exemptions. Such Purchaser is a director of the Company and an "accredited
investor" as defined in Regulation D pursuant to the Act.
4. Restrictive Legends.
4.1. Each certificate or other document representing any of the
Securities issued pursuant to this Agreement shall be stamped or otherwise
imprinted with a restrictive legend in the form set forth on the form of the
Warrant attached hereto as an exhibit (or, in the case of shares of Series E
Preferred Stock or shares of common stock issuable upon conversion thereof or
exercise of the Warrants, an equivalent legend appropriately modified to refer
to such Securities). In the event of any transfer or reissuance of any such
Security, the certificates or other instruments representing such Securities
shall continue to bear such legends.
4.2. The Company hereby agrees that it will promptly deliver or
cause to be delivered a new certificate or certificates or instrument or
instruments for any Securities, which certificate or certificates or instrument
or instruments will not bear the legends referred to above, upon determination
by the Company that such Securities have been held beneficially by the holder
for at least three years and that such holder is not and has not been within
the preceding three months an affiliate of the Company. All determinations
pursuant to the preceding sentence shall be made in accordance with Rule 144(k)
under the Act or any applicable successor rule. In the event that a period
shorter than specified above is permitted by reason of the amendment or
replacement of such Rule 144(k), then the Company shall impose no greater
restriction than the restriction imposed as the result of such amendment or
replacement.
5. Conditions to the Obligations of the Purchasers. The obligations of
each Purchaser to purchase the Securities to be purchased by such Purchaser
under this Agreement are subject to the satisfaction or waiver by such
Purchaser of the following conditions:
5.1. The Company shall, against receipt of payment therefore as
provided herein, deliver to the Purchaser the certificates or other instruments
evidencing such Securities in the form contemplated by this Agreement; and
5.2. The representations of the Company set forth in Section 2 of
the Agreement shall be true and correct in all material respects at the time of
such purchase and sale of such Securities.
6. Conditions to the Obligations of the Company. The obligations of the
Company to issue and sell the Securities to be issued and sold by the Company
under this Agreement are subject to the satisfaction or waiver by the Company
of the following conditions:
6.1. Each Purchaser shall have delivered payment as provided herein
against delivery to such Purchaser of the certificates or other instruments
evidencing such Securities in the form contemplated by this Agreement; and
6.2. The representations of each Purchaser set forth in Section 3
of this Agreement shall be true and correct in all material respects at the
time of such purchase and sale of such Securities; and
6.3. The Company shall have received such consents, waivers and
agreements from its secured bank lender as shall be required, in the judgment
of the Company, to permit the issuance and sale of such Securities with the
result that, upon consummation of such issuance and sale, the Company shall not
be in default (or shall be subject to a forbearance agreement reasonably
satisfactory to the Company with respect to any such default) under the
provisions of any agreement or instrument governing or evidencing any
obligations of the Company to its secured bank lender.
7. Registration Rights.
7.1. As used in this Section 7:
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(a) The terms "register," "registered" and "registration" refer to a
registration effective by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of the effectiveness
of such registration statement.
(b) The term "Registrable Securities" means: (i) any common stock of
the Company ("Common Stock") issued, or issuable, upon the conversion of any
Series E Preferred Stock regardless of whether such conversion has taken place
at any time; (ii) any Common Stock issued, or issuable upon the conversion or
exercise of any Warrant, regardless of whether such exercise has taken place at
any time, or any warrant, right or other security which is issued as a dividend
or other distribution with respect to, or in exchange for or in replacement of,
any Series E Preferred Stock or any Warrant; and (iii) any Common Stock issued
as a dividend on any Series E Preferred Stock; excluding in all cases, however,
any Registrable Securities sold by a person in a transaction in which his
rights under this Section 7 are not assigned.
(c) The term "Holder" means any holder of Registrable Securities who
acquired such Registrable Securities in a transaction or series of
transactions not involving any public offering or any sale pursuant to Rule 144
under the Act.
7.2. The Company hereby agrees that:
(a) If at any time or from time to time, the Company determines to
register any of its securities, either for its own account or the account of a
security holder or holders, (other than a registration solely to implement an
employee benefit plan or a registration on Form S-4 or a Rights Offering as
such term is defined in the Certificate of Designation), the Company will:
(i) promptly give to each Holder written notice thereof (which
will include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky law or other
state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in any written
request or requests by any Holder received by the Company within twenty days
after such written notice is given and make its best efforts to qualify all the
Registrable Securities specified in such request under the blue sky or other
securities laws of any jurisdiction which said Holders may reasonably request.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company will so
advise the Holders as a part of the written notice given pursuant to Section
7.2(a)(i) above. In such event, the right of any Holder to registration
pursuant to this Section 7.2 will be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute Registrable Securities through such
underwriting (together with the Company and the other shareholders distributing
their securities through such underwriting) will enter into an underwriting
agreement in customary form, satisfactory to the Company, with the underwriter
or underwriters selected for such underwriting by the Company. Notwithstanding
any other provision of this Section 7.2, if the managing underwriter determines
in good faith that marketing factors require a limitation of the number of
shares to be underwritten for the accounts of Holders of Registrable Securities
and other securities of the Company entitled to registration pursuant to
agreements with the Company, the managing underwriter may limit the number of
Registrable Securities and other securities of the Company entitled to
registration pursuant to agreements with the Company to be included in the
registration. The Company will so advise all Holders of Registrable Securities
and all shareholders owning securities of the Company entitled to registration
pursuant to agreements with the Company and participating in such registration,
and the number of shares of Registrable Securities and such other securities
that may be included in the registration and underwriting will be allocated
among all Holders and other shareholders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities and such other
securities entitled to such registration held by such Holders and other
shareholders at the time of filing the registration statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation will be included in such registration. If any Holder
disapproves of the terms of the underwriting, he may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. The
Registrable Securities so withdrawn will also be withdrawn from registration;
provided, however, that, if by the withdrawal of such Registrable Securities or
any other securities entitled to registration pursuant to agreements with the
Company a greater number of Registrable Securities held by Holders may be
included in such registration (up to the
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maximum of any limitation imposed by the managing underwriter) then the Company
will offer to all Holders and other shareholders who have included Registrable
Securities and such other securities in the registration the right to include
additional Registrable Securities or other securities in portion to the amounts
of their Registrable Securities and such other securities so included.
(c) The Company shall cooperate and communicate with all
Holders wishing to participate in any registration pursuant to this Section 7.2
so as to permit them a reasonable and effective opportunity to participate,
including providing prompt notice of any stop orders and copies of all
registration statements and prospectuses filed with the Securities and Exchange
Commission, including any amendments, and any such other materials and
information that is provided to other participating securities holders. The
Company will bear all expenses of any registration, including filing fees, blue
sky fees and expenses, accounting and legal fees and expenses, printing and
mailing costs and other similar expenses, but will not bear any expenses
(including fees of legal counsel) incurred by participating Holders and will not
bear any underwriting discount or concession or similar sale costs with respect
to Registrable Securities offered and sold by or for participating Holders. The
Company and the participating Holders will agree to indemnify each other or to
contribute to one another on reasonable and customary terms.
8. Selection of Shares to be Redeemed or Converted. If less than all the
Series E Preferred Stock is required to be redeemed or converted pursuant to
Subsections 5(a) or 6(a) of the Certificate of Designation, the shares to be
redeemed or converted shall be determined by written agreement of the
Purchasers or, if the Purchasers fail to tender a written agreement to the
Company prior to the time for redemption or conversion, the shares to be
redeemed or converted shall be determined as follows:
8.1. The first 100,000 shares of Series E Preferred Stock redeemed
pursuant to Subsection 5(a) of the Certificate of Designation shall be redeemed
from those shares purchased by Barker and any remaining shares redeemed shall be
redeemed ratably from the balance of the Series E Preferred Stock purchased by
each Purchaser after deducting therefrom any Series E Preferred Stock tendered
by the Purchaser to pay for Common Stock purchased in a Rights Offering pursuant
to Subsection 5(b) of the Certificate of Designation.
8.2. Any Series E Preferred Stock converted pursuant to Subsection 6(a)
of the Certification of Designation shall come ratably from the Series E
Preferred Stock purchased by each Purchaser after deducting therefrom any Series
E Preferred Stock tendered by the Purchaser to pay for Common Stock purchased in
a Rights Offering pursuant to Subsection 5(b) of the Certificate of Designation.
8.3. Should either or both Purchasers transfer all or any part of their
Series E Preferred Stock, the shares transferred shall be treated for purposes
of the computations in this Section 8 as still owned by the transferring
Purchaser and a pro rata portion of any shares required to be redeemed or
converted from the shares originally purchased by the Purchaser shall be
converted or redeemed from those transferred. The Purchasers shall notify each
transferee of the restrictions in this Agreement and shall require that each
transferee notify any transferee from it of such restrictions.
9. Miscellaneous.
9.1 Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by any party
hereto shall not constitute a waiver of the right to pursue other available
remedies.
9.2. Parties Bound. Except to the extent otherwise expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, representatives, administrators,
guardians, successors and assigns; and no other person shall have any right,
benefit or obligation hereunder.
9.3. Notices. All notices, reports records or other communications that
are required or permitted to be given to the parties under this Agreement shall
be sufficient in all respects if given in writing and delivered in person, by
telecopy, by overnight courier or by registered or certified mail, postage
prepaid, return receipt requested, to the receiving party at the following
address:
If to a Purchaser, to him at the most recent address furnished by him to the
Company;
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If to the Company, to the Company's main office;
or to such other address as such party may have given to the other parties by
notice pursuant to this Section 9.3. Notice shall be deemed given on the date
of delivery, in the case of personal delivery or telecopy, or on the delivery
or refusal date, as specified on the return receipt, in the case of overnight
courier or registered or certified mail.
9.4. Choice of Law. This Agreement shall be construed, interpreted, and
the rights of the parties determined in accordance with, the laws of the State
of Delaware, without giving effect to any conflicts of laws principles.
9.5. Entire Agreement; Amendments and Waivers; Assignment. This
Agreement, together with all exhibits and schedules hereto, constitutes the
entire agreement between the parties pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. Except
as set forth herein, there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof. No
supplement, modification or waiver of this Agreement shall be binding unless it
shall be specifically designated to be a supplement, modification or wavier of
this Agreement and shall be executed in writing by each party to be bound
thereby. No wavier of any of the provisions of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided. In the
event of any permitted transfer of any Securities, any rights of the holder
thereof pursuant to Section 7 shall be transferred automatically. Except as set
forth in the preceding sentence and except as provided in Section 8 hereof, this
Agreement may not be assigned by operation of law or otherwise.
9.6. Further Assurances. From time to time hereafter and without
further consideration, each of the parties hereto shall execute and deliver such
additional or further instruments of conveyance, assignment and transfer and
take such actions as any of the other parties hereto may reasonably request in
order to more effectively consummate the transactions contemplated by this
Agreement or as shall be reasonably necessary or appropriate in connection with
the carrying out of the parties' respective obligations hereunder or the
purposes of this Agreement.
9.7. Multiple Counterparts. This Agreement may be executed in or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8. Headings. The headings of the several Sections herein are inserted
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of November 13, 1996.
AMERICAN ECOLOGY CORPORATION
By:/s/
----------------------------------
Jack K. Lemley
Chairman & CEO
/s/
-------------------------------------
Edward F. Heil
/s/
-------------------------------------
Rotchford D. Barker
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SCHEDULE 1
Aggregate Purchase
Price of Series E
Number of Shares Preferred Stock
of Series E Number of Shares and Warrants
Purchaser Preferred Stock Warrants to be Purchased
- --------- --------------- -------- ---------------
Rotchford Barker 200,000 2,000,000 $2,000,000
Edward F. Heil 100,000 1,000,000 $1,000,000
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