0000899243-95-000632.txt : 19950926
0000899243-95-000632.hdr.sgml : 19950926
ACCESSION NUMBER: 0000899243-95-000632
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 5
CONFORMED PERIOD OF REPORT: 19950912
ITEM INFORMATION: Other events
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 19950922
SROS: NASD
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AMERICAN ECOLOGY CORP
CENTRAL INDEX KEY: 0000742126
STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953]
IRS NUMBER: 953889638
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-11688
FILM NUMBER: 95575683
BUSINESS ADDRESS:
STREET 1: 5333 WESTHEIMER STE 1000
CITY: HOUSTON
STATE: TX
ZIP: 77056-5407
BUSINESS PHONE: 7136241900
MAIL ADDRESS:
STREET 1: 5333 WESTHEIMER
STREET 2: STE 1000
CITY: HOUSTON
STATE: TX
ZIP: 77056-5407
8-K
1
FORM 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 12, 1995
AMERICAN ECOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-11688 95-3889638
(State or other (Commission File (IRS Employer Identification
jurisdiction of Number) Number)
incorporation)
5333 WESTHEIMER, SUITE 100
HOUSTON, TEXAS
77056
(Address of principal executive office)
(Zip Code)
(713) 624-1900
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On September 12, 1995, American Ecology Corporation (the "Company") entered
into a definitive Purchase Agreement providing for the investment of
$5,000,000 in the Company by a group of directors of the Company (the
"Investing Directors"). The terms of the Purchase Agreement and the
investments made and to be made by or on behalf of the Investing Directors
are described on the Company's September 22, 1995 Press Release attached
hereto as Exhibit 99.4 and incorporated herein by reference.
The definitive Purchase Agreement entered into on September 12, 1995
satisfied and superseded the obligations of the investing directors
pursuant to the Company's previously reported arrangement under which the
directors were to have invested the same amounts for debt and Common Stock
purchase warrants of the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
99.1 Purchase Agreement dated as of September 12, 1995 among the
Company and the Investing Directors, comprised of Edward F.
Heil, John Harris, Jack K. Lemley, Paul F. Schutt and Harry J.
Phillips, Jr.
99.2 Form of Certificate of Designation, Preferences and Rights of
Series D Cumulative Convertible Preferred Stock of American
Ecology Corporation.
99.3 Form of Warrant to Purchase Common Stock of American Ecology
Corporation.
99.4 Press Release of the Company dated September 22, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN ECOLOGY CORPORATION
Date: September 22, 1995 By: /s/ A. Jefferson Walker, III
------------------------------
A. Jefferson Walker, III
Assistant Treasurer
EX-99.1
2
PURCHASE AGREEMENT
EXHIBIT 99.1
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is dated and effective as of
September 12, 1995, and is entered into by and among (i) American Ecology
Corporation, a Delaware corporation (the "Company"), (ii) John H. Harris, Jr.,
(iii) Edward F. Heil, (iv) Jack K. Lemley, (v) Paul F. Schutt and (vi) Harry J.
Phillips, Jr. (the individuals identified in clauses (ii) through (vi) 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:
1.1 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, a
Nonnegotiable Promissory Note in the form attached hereto as Exhibit A ("Demand
---------
Note"). The principal amount of the Demand Note to be purchased by each
Purchaser is set forth on Schedule 1, attached hereto. The purchase price of
----------
each Demand Note shall be paid in cash to the Company on the date of this
Agreement by the Purchaser of that Demand Note. The obligations of the
respective Purchasers to purchase the Demand Notes pursuant to this Agreement
are several, and not joint. The purchase and sale of the Demand Notes is
referred to in this Agreement as the "First Funding." The First Funding shall
occur at the offices of Mayor, Day, Caldwell & Keeton, L.L.P., 19th Floor, 700
Louisiana, Houston, Texas 77002 not later than the close of business on the date
of this Agreement, or at such other time and place as may be agreed to by all of
the parties to this Agreement.
1.2 The Company will issue and sell to each Purchaser on or before the
"Second Funding Date" (as specified on Schedule 1), and each Purchaser will
----------
purchase from the Company on or before such Second Funding Date, (a) the number
of shares of Series D Preferred Stock (as hereinafter defined) specified on
Schedule 1 and (b) the number of $4.75 Warrants (as hereinafter defined)
----------
specified on Schedule 1 of the Company. The aggregate purchase price of each
----------
(i) one share of Series D Preferred Stock and (ii) each ten $4.75 Warrants shall
be $47.50, which shall be paid to the Company on the Second Funding Date by
surrender of an equal principal amount of Demand Notes (and all accrued and
unpaid interest on the surrendered amount shall be paid in full in cash by the
Company). The obligations of the respective Purchasers to purchase shares of
Series D Preferred Stock and $4.75 Warrants on or before the Second Funding Date
pursuant to this Agreement are several, and not joint. The purchase and sale of
the shares of Series D Preferred Stock and $4.75 Warrants on or before the
Second Funding Date shall occur at the offices of Mayor, Day, Caldwell & Keeton,
L.L.P., 19th Floor, 700 Louisiana, Houston, Texas 77002 not later than the close
of business on the Second Funding Date, 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 D Preferred Stock" means a series of preferred stock
of the Company established by the Certificate of Designation,
Preferences and Rights of Series D Cumulative Convertible Preferred Stock of
American Ecology Corporation (the "Certificate of Designation") attached hereto
as Exhibit B. As used in this Agreement, the term "$4.75 Warrant" means a
---------
Warrant to purchase common stock of the Company in the form attached hereto as
Exhibit C.
---------
1.3 The Company will issue and sell to each Purchaser on or before the
"Third Funding Date" (as specified on Schedule 1), and each Purchaser will
----------
purchase (or cause to be purchased by one or more qualified substitute
purchasers pursuant to Section 8 of this Agreement) from the Company on or
before such Third Funding Date, (a) the number of shares of Series D Preferred
Stock specified on Schedule 1 and (b) the number of $4.75 Warrants specified on
----------
Schedule 1 of the Company. The aggregate purchase price of (i) each one share
----------
of Series D Preferred Stock and (ii) each ten $4.75 Warrants shall be $47.50,
which shall be paid to the Company on the Third Funding Date in cash. The
obligations of the respective Purchasers to purchase (or cause to be purchased
by one or more other qualified substitute purchasers pursuant to Section 8 of
this Agreement) shares of Series D Preferred Stock and $4.75 Warrants on or
before the Third Funding Date pursuant to this Agreement are several, and not
joint. The purchase and sale of the shares of Series D Preferred Stock and
$4.75 Warrants on or before the Third Funding Date shall occur at the offices of
Mayor, Day, Caldwell & Keeton, L.L.P., 19th Floor, 700 Louisiana, Houston, Texas
77002 not later than the close of business on the Third Funding Date, or at such
other time and place as may be agreed to by all of the parties to this
Agreement.
1.4 The Company will issue and sell to Harry J. Phillips, Jr. ("Phillips")
on or before January 5, 1996 (the "Fourth Funding Date"), and Phillips will
purchase (or cause to be purchased by one or more qualified substitute
purchasers pursuant to Section 8 of this Agreement) from the Company on or
before such Fourth Funding Date, (a) the number of shares of Series D Preferred
Stock specified on Schedule 1 and (b) the number of $4.75 Warrants specified on
----------
Schedule 1 of the Company. The aggregate purchase price of (i) each one share
----------
of Series D Preferred Stock (ii) each ten $4.75 Warrants shall be $47.50, which
shall be paid to the Company on the Fourth Funding Date in cash. The purchase
and sale of the shares of Series D Preferred Stock and $4.75 Warrants on or
before the Fourth Funding Date shall occur at the offices of Mayor, Day,
Caldwell & Keeton, L.L.P., 19th Floor, 700 Louisiana, Houston, Texas 77002 not
later than the close of business on the Fourth Funding Date, or at such other
time and place as may be agreed to by Phillips and the Company.
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, assuming satisfaction of the conditions to the
obligations of the Company set forth in Section 6 of this Agreement, to perform
all the obligations required to be performed by the Company under this
Agreement. 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
2
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. Upon issuance of the Securities at the Second Funding, the Third
Funding and the Fourth Funding: all requisite corporate action shall have been
taken for the issuance thereof; all shares of Series D Preferred Stock then
being issued shall be, all $4.75 Warrants then being issued shall be, and all
shares of Common Stock issuable pursuant to such Securities then being issued
("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
pursuant to such Securities then being issued.
2.2 The Company will cooperate fully to provide the Special Committee
referred to in Section 6 of this Agreement with all such information and
support, including cooperation with McKenna & Company and legal counsel to the
Special Committee, as the Special Committee may reasonably require in connection
with the satisfaction of the conditions to the obligations of the Company set
forth in Section 6. The Company will use its commercially reasonable best
efforts to satisfy as promptly as is reasonably practicable any applicable
requirements of Section 5(i)(1)(e) of Part III of Schedule D to the Bylaws of
the National Association of Securities Dealers, Inc. (the "NASD Exception").
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 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
3
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.
4. Restrictive Legends.
-------------------
4.1 Each certificate or other document representing any of the Demand
Notes, shares of Series D Preferred Stock, $4.75 Warrants or shares of common
stock issuable in respect of the foregoing (collectively the "Securities" and
individually a "Security") issued pursuant to this Agreement shall be stamped or
otherwise imprinted with a restrictive legend in the form set forth on the form
of such Security as attached hereto as an exhibit (or, in the case of shares of
Series D Preferred stock or shares of common stock issuable upon conversion
thereof, 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.
-----------------------------------------------
5.1 The obligations of each Purchaser to purchase the Securities to be
purchased by such Purchaser under this Agreement at the time of each of the
First Funding, the Second Funding, the Third Funding or the Fourth Funding, as
the case may be, are subject to the satisfaction or waiver by such Purchaser of
the following conditions:
(a) The Company shall, against receipt of payment therefor as provided
herein, deliver to the Purchaser the certificates or other instruments
evidencing such Securities in the form contemplated by this Agreement; and
(b) 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.
5.2 The obligations of each Purchaser to purchase the Securities to be
purchased by such Purchaser under this Agreement at the time of each of the
Second Funding, the Third Funding and the Fourth Funding, as the case may be,
are subject to the satisfaction or waiver
4
by such Purchaser of the condition that, at or prior to the Second Funding, (i)
the Special Committee shall have determined by appropriate resolution that the
conditions to the obligations of the Company set forth in Section 6.2 have been
satisfied or waived by the Special Committee and (ii) the Certificate of
Designation shall have been adopted and filed with the Secretary of State of
Delaware.
6. Conditions to the Obligations of the Company.
--------------------------------------------
6.1 The obligations of the Company to issue and sell the Securities to be
issued and sold by the Company under this Agreement at the time of each of the
First Funding, the Second Funding, the Third Funding or the Fourth Funding, as
the case may be, are subject to the satisfaction or waiver by the Company of the
following conditions:
(a) Each Purchaser (or in the case of the Third Funding and the Fourth
Funding another qualified purchaser pursuant to Section 8 of this
Agreement) 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
(b) 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
(c) The Company shall have received such consents, waivers and
agreements from its secured bank lender as shall be required, in the
judgment of the Special Committee, 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 Special Committee 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.
6.2 The obligations of the Company to issue and sell the Securities to be
issued and sold by the Company under this Agreement at the time of each of the
Second Funding, the Third Funding and the Fourth Funding, as the case may be,
are subject to the satisfaction or waiver of the condition that the Special
Committee of the Board of Directors established on September 7, 1995 (the
"Special Committee") shall have determined by appropriate resolution, at or
prior to the Second Funding, that:
(a) The Company shall have received a fairness opinion satisfactory to
it pursuant to the engagement letter agreement between the Company and
McKenna & Company;
(b) The Special Committee shall have approved and adopted the
resolution set forth in the Certificate of Designation; and
5
(c) The issuance of the Securities by the Company at the Second Funding
shall not violate any applicable requirements of the NASD Exception.
7. Registration Rights.
-------------------
7.1 As used in this Section 7:
(a) The terms "register," "registered" and "registration" refer to a
registration effected 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 D Preferred Stock, regardless of whether such conversion has
taken place at any time, and (ii) any Common Stock issued, or issuable upon
the conversion or exercise of any $4.75 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 D Preferred Stock
or any $4.75 Warrant or, 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), 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 (20) 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.
6
(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 (subject to the provision in the previous sentence) 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 other Holders may be included in such
registration (up to the 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 proportion 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
7
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. Other Qualified Purchasers. The Company agrees that the Purchasers may
--------------------------
cause the Securities to be purchased at the Third Funding and/or the Fourth
Funding in whole or in part by one or more qualified substitute purchasers. For
purposes of this Agreement, a qualified substitute purchaser is any person who
(i) is an accredited investor as defined in Regulation D under the Act and (ii)
who executes a subscription agreement containing representations regarding,
among other things, such person's financial sophistication, knowledge of and
access to information regarding the Company, which is reasonably satisfactory to
the Special Committee and its counsel. The Company will cooperate fully to
provide access to information to any such person, subject to customary
confidentiality requirements. Each Purchaser agrees that he will not take any
actions with respect to any proposed substitute purchasers that would require
any registration of any Securities by the Company under the Act or any other
securities laws.
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:
8
If to a Purchaser, to him at the most recent address furnished by him to
the Company;
With a copy to:
Sewell & Riggs, a Professional Corporation
333 Clay Avenue, Suite 800
Houston, Texas 77002
Attention: Daniel Cohen
If to the Company, to each member of the Special Committee at the most
recent address furnished by him or her to the Company;
With a copy to:
Mayor, Day, Caldwell & Keeton, L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attention: Geoffrey K. Walker
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 TEXAS, 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. Without
limitation to the foregoing, it is agreed that that certain Agreement dated
August 21, 1995 among the Company and the Purchasers, as modified by that
certain Addendum dated as of that same date and regardless of the version or
versions executed by any one or more of the Purchasers (the "Original
Agreement"), is expressly terminated and superseded and neither the Company nor
any of the Purchasers shall hereafter have any rights or obligations under or in
respect of the Original Agreement. 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 waiver of this Agreement and
shall be executed in writing by each party to be bound thereby. No waiver 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
9
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, the 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 one 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.
9.9 Legal Fees. The Company will pay the reasonable fees and expenses of
Sewell & Riggs, a Professional Corporation, incurred in acting as counsel to the
Purchasers.
10
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of September 12, 1995.
AMERICAN ECOLOGY CORPORATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
___________________________________________
Edward F. Heil
___________________________________________
John Harris
___________________________________________
Jack K. Lemley
___________________________________________
Paul F. Schutt
___________________________________________
Harry J. Phillips, Jr.
11
SCHEDULE 1
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First Funding:
-------------
Demand Note
Purchaser Amount
---------------------------------- -------------
John Harris $ 125,001.00
Edward F. Heil 1,500,012.00
Jack K. Lemley 250,002.00
Paul F. Schutt 250,002.00
Harry J. Phillips, Jr. 1,125,009.00
Second Funding (on or before September 26, 1995):
------------------------------------------------
Aggregate Purchase
Price of Series D
Preferred Stock
Shares and $4.75
Number of Shares Warrants to be
of Series D Number of be Purchased at
Purchaser Preferred Stock $4.75 Warrants Second Funding
------------------------ ---------------- -------------- -----------------
John Harris 2,631.6 26,316 $ 125,001.00
Edward F. Heil 31,579.2 315,792 1,500,012.00
Jack K. Lemley 5,263.2 52,632 250,002.00
Paul F. Schutt 5,263.2 52,632 250,002.00
Harry J. Phillips, Jr. 23,684.4 236,844 1,125,009.00
Third Funding (on or before September 30, 1995):
-----------------------------------------------
Aggregate Purchase
Price of Series D
Preferred Stock
Shares and $4.75
Number of Shares Warrants to be
of Series D Number of be Purchased at
Purchaser Preferred Stock $4.75 Warrants Third Funding
------------------------ ---------------- -------------- -----------------
John Harris 3,157.92 31,579.2 $150,001.20
Edward F. Heil 3,157.92 31,579.2 150,001.20
Jack K. Lemley 3,157.92 31,579.2 150,001.20
Paul F. Schutt* 3,157.92 31,579.2 150,001.20
Harry J. Phillips, Jr. 3,157.92 31,579.2 150,001.20
________________
* Mr. Schutt is not obligated to purchase these Securities; however, to the
extent that Mr. Schutt does not purchase these Securities, the remaining
Purchasers will each be severally obligated to purchase 25% of the unsubscribed
amount.
12
Fourth Funding (on or before January 5, 1996):
---------------------------------------------
Aggregate Purchase
Price of Series D
Preferred Stock
Shares and $4.75
Number of Shares Warrants to be
of Series D Number of be Purchased at
Purchaser Preferred Stock $4.75 Warrants Fourth Funding
------------------------ ---------------- -------------- -----------------
Harry J. Phillips, Jr. 21,052.8 210,528 $1,000,008.00
13
EX-99.2
3
CERT. OF DESIGNATION
EXHIBIT 99.2
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES D CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
AMERICAN ECOLOGY CORPORATION
American Ecology Corporation, a corporation organized and existing
under the Delaware General Corporation Law, (the "Corporation") DOES HEREBY
CERTIFY:
That, effective September ___, 1995, pursuant to the authority
conferred upon the Board of Directors by the Amended and Restated Certificate of
Incorporation of the Corporation and pursuant to the provisions of Section
151(a) and other applicable provisions of the Delaware General Corporation Law,
the Board of Directors (or, as and to the extent authorized pursuant to
applicable law, a committee acting with the authority of the Board of Directors)
duly adopted, by all necessary action on the part of the Corporation, the
following resolution creating a series of 105,264 shares of preferred stock
designated as Series D Cumulative Convertible Preferred Stock;
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its Amended
and Restated Certificate of Incorporation, a series of preferred stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Series D Cumulative Convertible Preferred Stock.
1. Designation. The series shall be designated as the "Series D
Cumulative Convertible Preferred Stock" (the "Series D Preferred Stock").
2. Number. The number of shares of the Series D Preferred Stock
authorized to be issued is 105,264.
3. Dividends.
(a) The Corporation shall pay to the holders of the Series D
Preferred Stock, a mandatory cumulative dividend at an annual rate of
8.375% of the Base Liquidation Preference (as such term is defined in
Section 4 below) each year, subject only to the Corporation having
funds from which dividends may lawfully
1
be paid in accordance with applicable law; provided, however, that the
Corporation shall not be obligated to pay any dividend if, as a result
of such payment, the Corporation would breach (i) any agreement or
instrument governing or evidencing the corporation's senior bank debt
as in effect (including giving effect to then applicable waivers,
forbearances, amendments, consents or other arrangements with the
lender) on the date of initial issuance of shares of the Series D
Preferred Stock (the "Initial Debt Documents") or (ii) any successor
agreement or instrument, or any modification or amendment thereto,
that is reasonably determined by the Board of Directors, acting in
good faith, to be, as of the time of effectiveness of the successor
agreement or instrument, or the modification or amendment thereto, not
more restrictive upon the payment of dividends on the Series D
Preferred Stock than the Initial Debt Documents. Dividends on the
Series D Preferred Stock shall be cumulative and shall commence to
accrue and be cumulative (whether or not declared) from the date on
which such shares shall have been issued. Such dividends shall be
mandatorily payable as stated above, in cash, in equal quarterly
payments on January 15, April 15, July 15 and October 15 of each year
(each such date being referred to herein as a "dividend payment
date"), commencing October 15, 1995, or if not paid on such dividend
payment date by reason of a prohibition against such payment pursuant
to the first sentence of this subsection (a) (a "payment
prohibition"), then promptly when and to the extent no such payment
prohibition continues to apply; provided, however, that the dividend
payable in respect of the quarter ended on the first dividend payment
date after the date on which such shares shall have been issued shall
be reduced in proportion to the portion of such quarterly period in
which such shares were not issued; and provided further, however, that
if and to the extent that, at any dividend payment date, the
Corporation shall fail to make any quarterly dividend payment on the
Series D Preferred Stock (which failure shall only be permitted to the
extent a payment prohibition applies), such unpaid dividend amount
shall accumulate without interest until paid. Such dividends shall be
paid to the Series D Preferred Stock stockholders of record on a date,
not exceeding 60 days preceding each such dividend payment date, fixed
not less than 10 days in advance for that purpose by the Board of
Directors. All full or partial dividends paid with respect to shares
of the Series D Preferred Stock, whether in cash or additional shares
of the Series D Preferred Stock or otherwise, shall be paid pro rata
to the holders entitled thereto.
(b) So long as any shares of the Series D Preferred Stock are
outstanding, unless all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series D
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) pay or declare any dividends, or make any other
distributions, on any shares of stock ranking junior to the
Series D
2
Preferred Stock in respect of dividends or distribution of assets
upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (a "Liquidation");
(ii) pay or declare any dividends, or make any other
distributions, on any shares of stock ranking on a parity to the
Series D Preferred Stock in respect of dividends or distribution
of assets upon Liquidation, except dividends paid ratably on the
Series D Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior to the Series D
Preferred Stock in respect of dividends or distribution of assets
upon Liquidation, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation
ranking junior to the Series D Preferred Stock in respect of
dividends or distribution of assets upon Liquidation.
Except as otherwise provided in this subsection (b), the Board of
Directors may declare and the Corporation may pay or set apart for
payment dividends and other distributions on the common stock (the
"Common Stock") and the preferred stock (the "Preferred Stock") of the
Corporation ranking junior to or on a parity with the Series D
Preferred Stock in respect of dividends or distributions of assets
upon Liquidation, and may redeem, purchase, retire or otherwise
acquire for consideration shares of Common Stock or Preferred Stock
ranking junior to or on a parity with the Series D Preferred Stock in
respect of dividends or distributions of assets upon Liquidation, and
the holders of the Series D Preferred Stock shall not be entitled to
share therein.
(c) In the event the Corporation, not being in violation of the
provisions of the preceding paragraph, shall distribute to all holders
of its Common Stock (x) evidences of indebtedness or assets and
property other than cash, (y) capital stock of the Corporation other
than Common Stock, or (z) rights to subscribe for or warrants to
purchase any security other than rights or warrants to purchase only
(i) Common Stock or (ii) units consisting of shares of Common Stock
and warrants to purchase shares of Common Stock (all of such
distributions collectively hereinafter called "Shared Distributions"),
then the holders of the Series D Preferred Stock shall participate in
such Shared Distributions as if immediately prior to the record date
for determination of stockholders entitled to receive such Shared
Distribution such holders had converted their shares of the Series D
Preferred Stock into shares of Common Stock.
3
4. Liquidation Rights. In the event of the Liquidation of the
Corporation, the holders of the Series D Preferred Stock shall be entitled
to have paid to them out of the assets of the Corporation, before any
distribution is made to or set apart for the holders of Common Stock or of
any other series of Preferred Stock or any other class or series of stock
of the Corporation ranking junior to the Series D Preferred Stock in
respect of distribution of assets upon Liquidation, an amount equal to
$47.50 per share (the "Base Liquidation Preference"), plus an amount equal
to any cash dividends and Shared Distributions which have accumulated but
have not been paid on or prior to the date of final distribution to holders
of the Series D Preferred Stock (collectively, the "Aggregate Liquidation
Preference"), and no more. The liquidation payment with respect to each
outstanding fractional share of the Series D Preferred Stock shall be equal
to a ratably proportionate amount of the liquidation payment with respect
to each outstanding share of the Series D Preferred Stock.
If upon any Liquidation of the Corporation the assets of the
Corporation or proceeds thereof distributable among the holders of shares
of the Series D Preferred Stock shall be insufficient to pay in full the
preferential amounts payable to such holders, then such assets or the
proceeds thereof shall be distributed among such holders ratably in
accordance with the respective amounts that would be payable on such shares
if all amounts payable thereon were paid in full.
For purposes of this Section 4, the voluntary sale, lease, exchange or
transfer (for cash, shares of stock, securities or other consideration) of
all or substantially all of the property or assets of the Corporation to,
or a consolidation or merger of the Corporation with, one or more
corporations shall not be deemed to be a Liquidation.
5. Redemption. Shares of the Series D Preferred Stock will not be
redeemable.
6. Conversion Rights.
(a) Subject to the provisions for adjustment hereinafter set
forth, the shares of the Series D Preferred Stock may be converted, at
the option of the holder thereof, at any time or from time to time
into fully paid and nonassessable whole shares of Common Stock at rate
of 1 share of Common Stock for each $5.50 of the Aggregate Liquidation
Preference of the Series D Preferred Stock duly surrendered for
conversion, provided, however, that any right a holder of any shares
of the Series D Preferred Stock may have otherwise had for the payment
of any dividends or Shared Distributions which have accumulated or are
in arrears with respect to the shares of Series D Preferred Stock
converted hereunder shall terminate as of the date of surrender for
conversion of such shares, and such holder shall have no further
rights to the payment of such dividends or Shared Distributions.
4
(b) Each holder of the Series D Preferred Stock desiring to
exercise such holder's right of conversion shall deliver written
notice of election to convert, stating the names and addresses of the
persons to whom the Common Stock is to be issued, and shall surrender
the certificate or certificates for the shares of Series D Preferred
Stock to be converted, duly endorsed or accompanied by proper
instruments of transfer (unless such endorsement or instruments are
waived by the Corporation) to the Corporation during usual business
hours at the office of the transfer agent of the Corporation for the
transfer of its Common Stock in Dallas, Texas (or such other place as
may be designated by the Corporation upon written notice to all
holders of the Series D Preferred Stock). Upon receipt by the
Corporation of any such notice of election to convert shares of the
Series D Preferred Stock, and upon surrender of the certificate or
certificates therefor, the Corporation shall execute and deliver, as
soon as practicable, to the converting holder, or to such holder's
nominee or nominees, a certificate or certificates for the number of
shares of Common Stock resulting from such conversion, together with
any cash adjustment in lieu of fractional shares as provided in
subsection (d). For all purposes, the rights of a converting holder,
as such, shall cease, and the person or persons in whose name or names
the certificate or certificates for Common Stock issuable upon such
conversion are to be issued shall be deemed to have become the record
holder or holders of such Common Stock at the close of business on the
day (the "Date of Conversion") on which delivery of such notice or the
surrender of the certificate or certificates for such shares
(whichever shall later occur) shall be made.
(c) The Corporation shall pay all issue taxes, if any, incurred
in respect to the Common Stock delivered on conversion; provided,
however, that the Corporation shall not be required to pay transfer or
other taxes, if any, incurred by reason of the issuance or delivery of
such Common Stock in names other than those in which the shares
surrendered for conversion are registered, and no delivery of
certificates registered in names other than those in which the shares
surrendered for conversion are registered, and no delivery of
certificates for such Common Stock shall be made unless and until
there has been paid to the Corporation the amount of any such taxes,
or there shall have been established to the satisfaction of the
Corporation that such taxes have been or are not required to be paid.
The Corporation shall not close its books against the transfer of
Series D Preferred Stock or of Common Stock issued or issuable upon
conversion of Series D Preferred Stock in any manner which interferes
with the timely conversion of Series D Preferred Stock. The
Corporation shall assist and cooperate with any holder of shares of
Series D Preferred Stock required to make any required governmental
filings or obtain any governmental approval prior to or in connection
with any conversion of such shares hereunder (including, without
limitation, making any filings required to be made by the
Corporation). All shares of Common Stock which are so issuable shall,
when issued, be duly and validly issued, fully paid and nonassessable
and free from all taxes, liens and
5
charges. The Corporation shall take all such actions as may be
necessary to assure that all such shares of Common Stock may be so
issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official
notice of issuance which shall be immediately delivered by the
Corporation upon each such issuance).
(d) The Corporation shall not be required to issue fractional
shares of Common Stock upon conversion of shares of the Series D
Preferred Stock. If more than one share of the Series D Preferred
Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate
number of shares so surrendered. If any fractional interest in a
share of Common Stock would be deliverable upon the conversion of any
shares, the Corporation shall, in lieu of delivering such fractional
share, make a cash payment, as an adjustment in respect of such
undelivered fraction of a share, in an amount equal to the same
fraction of the Current Market Price of one share of the Common Stock
on the last business day before the Date of Conversion. The "Current
Market Price" on any given day shall be: (i) if the Common Stock is
listed or admitted to unlisted trading privileges on any exchange
registered with the Securities and Exchange Commission as a "national
securities exchange" under the Securities Exchange Act of 1934 (a
"National Securities Exchange"), the last sales price of the shares of
Common Stock on the National Securities Exchange in or nearest the
City of New York on which the shares of Common Stock shall be listed
or admitted to unlisted trading privileges (or the quoted closing bid
if there be no sales on such National Securities Exchange) on the most
recently completed trading day prior to such day; or (ii) if the
Common Stock is not so listed or admitted, the closing sales price of
a share of Common Stock as quoted in The Nasdaq Stock Market on the
most recently completed trading day prior to the day in question; or
(iii) if the Common Stock is not so quoted, the mean between the high
and low bid prices of the shares of Common Stock in the over-the-
counter market on the most recently completed trading day prior to the
day in question as reported by National Quotation Bureau Incorporated
or similar organization.
(e) The number of shares of Common Stock into which each share of
the Series D Preferred Stock is convertible (the "Conversion Rate")
shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall (x) pay a dividend or make
a distribution of Common Stock on outstanding Common Stock, (y)
subdivide outstanding Common Stock into a larger number of shares
of Common Stock by reclassification or otherwise, or (z) combine
outstanding Common Stock into a smaller number of shares of
Common
6
Stock by reclassification or otherwise, the Conversion Rate in
effect immediately prior thereto shall be adjusted
proportionately so that the holder of a share of the Series D
Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of the Common Stock that
such holder would have owned after the happening of any of the
events described above had such share been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this subparagraph (i) shall become effective
retroactively to immediately after the record date in the case of
a share dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision
or combination.
(ii) In case of any capital reorganization or
reclassification of the shares of Common Stock (except as
provided in subparagraph (i) above), or in case of any
consolidation or merger to which the Corporation is a party
(other than a merger in which the Corporation is the surviving
corporation and which does not result in any capital
reorganization or reclassification of Common Stock), or in case
of any sale or conveyance to another corporation of all or
substantially all of the property and assets of the Corporation,
and if, in connection with any such consolidation, merger, sale
or conveyance, shares or other securities or property shall be
issuable or deliverable in exchange for shares of Common Stock,
provision shall be made as part of the terms of such capital
reorganization or reclassification, consolidation, merger, sale
or conveyance that the holder of each share of the Series D
Preferred Stock thereafter surrendered for conversion shall have
the right to convert such share into the same kind and amount of
stock and other securities and property as would have been
receivable upon such capital reorganization or reclassification,
consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock into which such share might have
been converted immediately prior thereto. In any such case,
appropriate provision (as determined to be equitable in the
business judgment of the Board of Directors) shall be made for
the application of Section 6 with respect to the rights and
interests thereafter of the holders of the Series D Preferred
Stock to the end that such Section (including adjustments of the
Conversion Rate) shall be reflected thereafter, as nearly as
reasonably practicable, in all subsequent conversions of the
Series D Preferred Stock. The Corporation shall not effect any
such consolidation, merger or sale, unless prior to the
consummation thereof, the successor corporation (if other than
the Corporation) resulting from consolidation or merger or the
corporation purchasing such assets assumes by written instrument
(in a manner determined to be equitable in the business judgment
of the Board of Directors to the holders of the Series D
Preferred Stock then outstanding), the obligation to deliver to
each such
7
holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be
entitled to acquire.
(iii) In case the Corporation shall issue pro rata to the
holders of shares of its Common Stock rights or warrants
entitling them, during a period not exceeding 30 days after the
record date mentioned below, to subscribe for or purchase only
shares of its Common Stock at a price per share less than the
average of the Current Market Price (as defined above) of the
Common Stock for the 30 consecutive trading days commencing 45
days before such record date (the "Average Market Price"), the
number of shares of its Common Stock into which each share of the
Series D Preferred Stock shall be convertible thereafter shall be
determined by multiplying the number of shares of Common Stock
into which each such share was convertible theretofore by a
fraction, of which the numerator shall be the number of shares of
Common Stock outstanding immediately prior to such record date
plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the denominator shall be
the number of shares of Common Stock outstanding immediately
prior to such record date, plus the number of shares of Common
Stock which the aggregate offering price of the total number of
shares being offered would purchase at such Average Market Price.
Such adjustment shall be made whenever such rights or warrants
are issued and shall become retroactively effective immediately
after the record date for the determination of the stockholders
entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate that would then be in effect had the
adjustments made upon the issuance of such rights or warrants
been made upon the basis of delivery of only the number of shares
of Common Stock actually delivered.
(iv) In case the Corporation shall issue pro rata to the
holders of shares of its Common Stock rights or warrants to
subscribe for or purchase only (x) shares of its Common Stock
except as described in subparagraph (iii) above, or (y) units
consisting of shares of Common Stock and warrants to purchase
shares of Common Stock, the number of shares of its Common Stock
into which each share of the Series D Preferred Stock shall be
convertible thereafter shall be determined by multiplying the
number of shares of Common Stock into which each such share was
convertible theretofore by a fraction, of which the numerator
shall be the Average Market Price for a share of Common Stock
determined as of the record date mentioned below, and of which
the denominator shall be such Average Market Price less the fair
market value (as determined in the business judgment of the Board
of Directors) as of
8
such record date of the rights or warrants distributed pro rata
to one of the outstanding shares of Common Stock. Such
adjustment shall be made whenever such distribution is made and
shall become retroactively effective immediately after the record
date for the determination of stockholders entitled to receive
such rights or warrants.
(v) In case the Corporation shall issue or sell any shares
(including treasury shares) of Common Stock, whether or not
subsequently reacquired or retired by the Corporation, other than
shares of Common Stock issued (x) upon exercise of warrants to
purchase shares of Common Stock issued prior to or substantially
simultaneously with the first issuance of shares of the Series D
Preferred Stock or (y) pursuant to any stock option plan or other
stock incentive or stock ownership plan for employees or
management of the Corporation ("Additional Shares of Common
Stock") for a cash purchase price that is less than the quotient
of $5.50 divided by the number of shares of Common Stock into
which each $5.50 of the Aggregate Liquidation Preference was
theretofore convertible (such quotient, the "Conversion Price"),
the number of shares of Common Stock into which each share of the
Series D Preferred Stock shall be convertible thereafter shall be
determined by multiplying the number of shares of Common Stock
into which each such share was convertible theretofore by a
fraction, of which the numerator shall be the number of shares of
Common Stock outstanding immediately after such issuance or sale,
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately prior to such issuance or
sale plus the number of shares of Common Stock that the aggregate
consideration received by the Corporation for such Additional
Shares of Common Stock so issued or sold would purchase at the
Conversion Price. Such adjustment shall be made whenever any
such Additional Shares of Common Stock are so issued or sold.
The foregoing provisions for adjustment of the Conversion Rate
shall apply in each successive instance in which an adjustment is
required thereby. No adjustment in the Conversion Rate resulting from
the application of the foregoing provisions is to be given effect
unless, by making such adjustment, the Conversion Rate in effect
immediately prior to such adjustment would be changed thereby by 1% or
more, but any adjustment that would change the Conversion Rate by less
than 1% is to be carried forward and given effect in making future
adjustments; provided, however, that each adjustment of the Conversion
Rate shall in all events be made not later than three years from the
date such adjustment would have been required to be made except for
the provisions of this sentence. All calculations under this Section
6 shall be made to the nearest one-hundredth (1/100th) of a share.
Shares of Common Stock owned by or held for
9
the account of the Corporation shall not be deemed to be outstanding
for the purposes of any computation made under this Section 6.
Whenever the number of shares of Common Stock deliverable upon
the conversion of shares of the Series D Preferred Stock shall be
adjusted pursuant to the provisions hereof, the Corporation shall
forthwith file at its principal office and with any transfer agent for
the Series D Preferred Stock and for the Common Stock a statement,
signed by the President or one of the Vice-Presidents of the
Corporation and by its Treasurer or one of its Assistant Treasurers,
stating the adjusted number of shares of Common Stock deliverable per
share of the Series D Preferred Stock and setting forth in reasonable
detail, the method of calculation and the facts requiring such
adjustment and upon which such calculation is based, and shall mail a
notice of such adjustment to each holder of record of the Series D
Preferred Stock. Each adjustment shall remain in effect until a
subsequent adjustment hereunder is required.
In the event:
(x) of the occurrence of any of the events referred to in
subparagraphs (i), (ii), (iii) and (iv) above; or
(y) of the Liquidation of the Corporation;
then the Corporation shall cause to be mailed to any transfer agent
for the Series D Preferred Stock and to the holders of record of the
outstanding shares of the Series D Preferred Stock at least 20 days
prior to the applicable date hereinafter specified, a notice
describing the event and stating the effect, if any, that such event
will have upon the Conversion Rate, and (A) the date on which a record
is to be taken for the purpose of a distribution referred to in
subparagraphs (i), (iii) or (iv) above, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to
be entitled to such distribution are to be determined, or (B) the date
on which any subdivision, combination or other capital reorganization
or reclassification or any consolidation, merger, sale or conveyance
referred to in subparagraphs (i) or (ii) above or such Liquidation is
expected to become effective.
The Corporation will at all times reserve and keep available for
issuance upon conversion of the Series D Preferred Stock the number of
shares of Common Stock that is equal to the number of shares of the
Series D Preferred Stock outstanding multiplied by the Conversion
Rate; provided, however, that nothing contained herein shall be
construed to preclude the Corporation from satisfying its obligations
in respect of the conversion of the outstanding shares of the Series D
Preferred Stock by delivery of shares of Common Stock that are held in
the treasury of the Corporation. The Corporation covenants that all
shares of
10
Common Stock that shall be issued upon conversion of the shares of the
Series D Preferred Stock will, upon issue, be fully paid and
nonassessable and not subject to any preemptive rights.
The shares of Common Stock issuable upon conversion of the shares
of the Series D Preferred Stock when the same shall be issued in
accordance with the terms of the Series D Preferred Stock are hereby
declared to be and shall be fully paid nonassessable shares of Common
Stock and not liable to any calls or assessments thereon, and the
holders thereof shall not be liable for any further payments in
respect thereof.
"Common Stock" when used in Section 6 with reference to the
Common Stock into which the Series D Preferred Stock is convertible
and when used in Section 8 below, shall mean only Common Stock as
authorized by the Restated Certificate of Incorporation of the
Corporation, as amended to the date hereof, and any shares into which
such Common Stock may thereafter have been changed, and, when
otherwise used in Section 6 and when used in Section 3, shall also
include shares of the Corporation of any other class or series,
whether now or hereafter authorized, that ranks or is entitled to
participation, as to payment of assets upon Liquidation and payment of
dividends, substantially on a parity with such Common Stock or other
class of shares into which such Common Stock may have been changed.
The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder
by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 6 and in the taking
of all such action as may be necessary or appropriate in order to
protect the conversion privilege of the holders of the Series D
Preferred Stock against dilution or other impairment. Without
limiting the generality of the foregoing, the Corporation (1) will not
increase the par value of any shares of stock receivable upon
conversion of the Series D Preferred Stock above the Conversion Price
then in effect, and (2) will take all such actions as may be necessary
or appropriate in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of stock upon the conversion
in full of all Series D Preferred Stock from time to time outstanding.
7. Voting Rights. Except as otherwise required by applicable law,
the holders of the Series D Preferred Stock shall have no voting rights or
powers.
8. Ranking. The Series D Preferred Stock shall rank senior to the
Common Stock (as defined in Section 6) and to all other series of the
Corporation's preferred stock
11
as to the payment of dividends and Shared Distributions, and as to the
distribution of the Corporation's assets, unless the terms and designations
of any such series of preferred stock shall provide otherwise, provided,
however, that in no event shall the Series D Preferred Stock rank junior to
any other class or series of the Corporation's capital stock.
9. Other Rights. The holders of the Series D Preferred Stock shall
not have any other preferences or special rights.
10. Registration of Transfer. The Corporation shall keep at its
principal office a register for the registration of Series D Preferred
Stock. Upon the surrender of any certificate representing Series D
Preferred Stock at such place, the Corporation shall, at the request of the
record holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of shares of Series D
Preferred Stock represented by the surrendered certificate. Each such new
certificate shall be registered in such name (upon satisfactory compliance
with all applicable securities laws) and shall represent such number of
Shares as is requested by the holder of the surrendered certificate and
shall be substantially identical in form to the surrendered certificate,
and dividends shall accrue on the Series D Preferred Stock represented by
such new certificate from the date to which dividends have been fully paid
on such Series D Preferred Stock represented by the surrendered
certificate.
11. Replacement. Upon receipt of evidence reasonably satisfactory to
the Corporation (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing shares of any class of Series D
Preferred Stock, and in the case of any such loss, theft or destruction,
upon receipt of indemnity reasonably satisfactory to the Corporation
(provided that the holder's own agreement shall be satisfactory), or, in
the case of any such mutilation upon surrender of such certificate, the
Corporation shall (at its expense) execute and deliver in lieu of such
certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate, and dividends shall accrue on the Series D Preferred
Stock represented by such new certificate from the date to which dividends
have been fully paid on such lost, stolen, destroyed or mutilated
certificate.
12
12. Amendment and Waiver. Any amendment, modification or waiver shall
be binding or effective with respect to any provision of Sections 1 to 12
hereof with the prior written consent of the holders of a majority of the
Series D Preferred Stock outstanding at the time such action is taken.
IN WITNESS WHEREOF, the undersigned officers of the Corporation have
executed and subscribed this Certificate this ____ day of September, 1995.
AMERICAN ECOLOGY CORPORATION
By: -------------------------------------
Name: -----------------------------------
Title: ----------------------------------
ATTEST:
--------------------------------------
Name: --------------------------------
Title: -------------------------------
13
EX-99.3
4
STOCK PURCHASE WARRANT
EXHIBIT 99.3
NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY OTHER
SECURITIES STATUTE. NO SALE, TRANSFER OR OTHER DISPOSITION HEREOF OR THEREOF,
OR OF ANY INTEREST HEREIN OR THEREIN, MAY BE MADE OR SHALL BE RECOGNIZED UNLESS
IN THE OPINION OF COUNSEL TO OR REASONABLY SATISFACTORY TO THE COMPANY SUCH
TRANSACTION WOULD NOT VIOLATE OR REQUIRE REGISTRATION UNDER SUCH ACT OR OTHER
STATUTE
WARRANT TO PURCHASE COMMON STOCK OF
AMERICAN ECOLOGY CORPORATION
THIS WARRANT CERTIFIES that, for value received, _____________________
(the "Holder") is entitled to purchase from American Ecology Corporation, a
Delaware corporation (the "Company"), at a price of $4.75 per share, subject to
adjustment as provided in Section 4 hereof ("Purchase Price"), at any time after
the date hereof up to and including September _____, 1999, ___________________
fully paid and non-assessable shares of the Company's Common Stock, par value
$.01 per share ("Common Stock"), subject, however, to the provisions and upon
the terms and conditions hereinafter set forth.
1. Exercise of Warrant. The rights represented by this Warrant may
be exercised by the holder hereof, at any time or from time to time, on any day
that is not a Saturday, Sunday or public holiday under the laws of the State of
Texas (such day being hereinafter referred to as a "Business Day"), for all or
part of the number of shares of Common Stock purchasable upon its exchange, by
(i) delivery of a Subscription Notice (in the form attached to this Warrant) of
such holder's election to exercise this Warrant, specifying the number of shares
of Common Stock to be purchased, (ii) payment of the Purchase Price for such
shares by certified check or bank draft payable to the order of the Company and
(iii) surrender of this Warrant (properly endorsed if required) at the Company's
principal office in Houston, Texas, or such other office or agency of the
Company as the Company may designate by notice in writing to the holder hereof.
In the event of any exercise of the rights represented by this
Warrant, certificates for the shares of Common Stock so purchased shall be
delivered to the holder hereof as soon as reasonably practicable, but in any
event within twenty-one (21) days, after the rights represented by this Warrant
shall have been so exercised, and unless this Warrant has expired, a new Warrant
representing the number of shares of Common Stock, if any, with respect to which
this Warrant shall not then have been exercised shall also be issued to the
holder hereof within such time. Each person in whose name any such certificate
for shares of Common Stock is issued shall for all purposes be deemed to have
become the holder of record of the Common
Stock represented hereby on the date on which this Warrant was surrendered and
payment of the Purchase Price was made, irrespective of the date of issue or
delivery of such certificate.
2. Transfer. The Company will maintain books for the registration
and transfer of the Warrants, and any such transfer will be registrable thereon
upon surrender of the transferred Warrant to the Company's office at the address
set forth in Section 11, together with a duly executed assignment thereof and
funds sufficient to pay any required stock transfer taxes. Upon such surrender
and payment, the Company shall, subject to Section 9, execute and deliver a new
Warrant or Warrants in the name of the assignees and in the number of shares of
Common Stock specified in the Assignment set forth on the reverse of the
Subscription Notice, and this Warrant shall promptly be canceled.
3. Certain Covenants of the Company. The Company covenants and
agrees that all shares of Common Stock that may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be fully paid and
non-assessable and free from all taxes, liens, charges and security interests
with respect to the issue thereof. The Company further covenants and agrees
that during the period within which the rights represented by the Warrant may be
exercised, the Company will at all times have authorized, and reserved free of
preemptive or other rights for the exclusive purpose of issue upon exercise of
the rights evidenced by this Warrant, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by this
Warrant. The Company shall take all such actions as may be necessary to assure
that all such shares of Common Stock may be issued upon the exercise of the
rights represented by this Warrant without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Company upon each such
issuance.
4. Adjustment of Purchase Price and Number of Shares. The number of
shares of Common Stock with respect to which this Warrant is exercisable (the
"Exercise Rate") shall be subject to adjustment from time to time as follows:
a. In case the Company shall (x) pay a dividend or make a
distribution of Common Stock on outstanding Common Stock, (y) subdivide
outstanding Common Stock into a larger number of shares of Common Stock by
reclassification or otherwise, or (z) combine outstanding Common Stock into
a smaller number of shares of Common Stock by reclassification or
otherwise, the Exercise Rate in effect immediately prior thereto shall be
adjusted proportionately so that the holder of this Warrant thereafter
exercised shall be entitled to receive the number of shares of the Common
Stock that such holder would have owned after the happening of any of the
events described above had such Warrant been exercised immediately prior to
the happening of such event. An adjustment made pursuant to this
subparagraph (a) shall become effective retroactively to immediately after
the record date in the case of a share dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision or combination.
2
b. In case of any capital reorganization or reclassification of the
shares of Common Stock (except as provided in subparagraph (a) above), or
in case of any consolidation or merger to which the Company is a party
(other than a merger in which the Company is the surviving corporation and
which does not result in any capital reorganization or reclassification of
Common Stock), or in case of any sale or conveyance to another corporation
of all or substantially all of the property and assets of the Company, and
if, in connection with any such consolidation, merger, sale or conveyance,
shares or other securities or property shall be issuable or deliverable in
exchange for shares of Common Stock, provision shall be made as part of the
terms of such capital reorganization or reclassification, consolidation,
merger, sale or conveyance that the holder of this Warrant thereafter
exercised shall have the right upon such exercise to receive the same kind
and amount of stock and other securities and property as would have been
receivable upon such capital reorganization or reclassification,
consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock with respect to which such Warrant might have been
exercised immediately prior thereto. In any such case, appropriate
provision (as determined to be equitable in the business judgment of the
Board of Directors) shall be made for the application of Section 4 with
respect to the rights and interests thereafter of the holder of this
Warrant to the end that such Section (including adjustments of the Exercise
Rate) shall be reflected thereafter, as nearly as reasonably practicable,
in all subsequent exercises of this Warrant. The Company shall not effect
any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor corporation (if other than the Company) resulting
from consolidation or merger or the corporation purchasing such assets
assumes by written instrument (in a manner determined to be equitable in
the business judgment of the Board of Directors to the holder of this
Warrant), the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire.
c. In case the Company shall issue pro rata to the holders of shares
of its Common Stock rights or warrants entitling them, during a period not
exceeding 30 days after the record date mentioned below, to subscribe for
or purchase only shares of its Common Stock at a price per share less than
the average of the Current Market Price (as defined in Section 6) of the
Common Stock for the 30 consecutive trading days commencing 45 days before
such record date (the "Average Market Price"), the number of shares of its
Common Stock with respect to which this Warrant is exercisable thereafter
shall be determined by multiplying the number of shares of Common Stock
with respect to which this Warrant was exercisable theretofore by a
fraction, of which the numerator shall be the number of shares of Common
Stock outstanding immediately prior to such record date plus the number of
additional shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be the number of shares of Common Stock
outstanding immediately prior to such record date, plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares being offered would purchase at such Average Market Price.
Such adjustment shall be made whenever such rights or warrants are issued
and shall become retroactively
3
effective immediately after the record date for the determination of the
stockholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock are not delivered after the expiration of such
rights or warrants, the Exercise Rate shall be readjusted to the Exercise
Rate that would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made upon the basis of delivery of
only the number of shares of Common Stock actually delivered.
d. In case the Company shall issue pro rata to the holders of shares
of its Common Stock rights or warrants to subscribe for or purchase only
(x) shares of its Common Stock except as described in subparagraph (iii)
above, or (y) units consisting of shares of Common Stock and warrants to
purchase shares of Common Stock, the number of shares of its Common Stock
with respect to which this Warrant is exercisable thereafter shall be
determined by multiplying the number of shares of Common Stock with respect
to which this Warrant was exercisable theretofore by a fraction, of which
the numerator shall be the Average Market Price for a share of Common Stock
determined as of the record date mentioned below, and of which the
denominator shall be such Average Market Price less the fair market value
(as determined in the business judgment of the Board of Directors) as of
such record date of the rights or warrants distributed pro rata to one of
the outstanding shares of Common Stock. Such adjustment shall be made
whenever such distribution is made and shall become retroactively effective
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants.
The foregoing provisions for adjustment of the Exercise Rate shall
apply in each successive instance in which an adjustment is required
thereby. No adjustment in the Exercise Rate resulting from the application
of the foregoing provisions is to be given effect unless, by making such
adjustment, the Exercise Rate in effect immediately prior to such
adjustment would be changed thereby by 1% or more, but any adjustment that
would change the Exercise Rate by less than 1% is to be carried forward and
given effect in making future adjustments; provided, however, that each
adjustment of the Exercise Rate shall in all events be made not later than
three years from the date such adjustment would have been required to be
made except for the provisions of this sentence. All calculations under
this Section 4 shall be made to the nearest one-hundredth (1/100th) of a
share. Shares of Common Stock owned by or held for the account of the
Company shall not be deemed to be outstanding for the purposes of any
computation made under this Section 4.
Whenever the number of shares of Common Stock deliverable upon the
exercise of this Warrant shall be adjusted pursuant to the provisions
hereof, the Company shall forthwith file at its principal office and with
any transfer agent for the Common Stock a statement, signed by the
President or one of the Vice-Presidents of the Company and by its Treasurer
or one of its Assistant Treasurers, stating the adjusted number of shares
of Common Stock deliverable with respect to this Warrant and setting forth
in reasonable detail, the method of calculation and the facts requiring
such adjustment and upon which
4
such calculation is based, and shall mail a notice of such adjustment to
the holder of record of this Warrant. Each adjustment shall remain in
effect until a subsequent adjustment hereunder is required.
In the event:
(x) of the occurrence of any of the events referred to in
subparagraphs (a), (b), (c) and (d) above; or
(y) of any liquidation, dissolution or winding up of the
Company (a "Liquidation");
then the Company shall cause to be mailed to the holder of record of this
Warrant at least 20 days prior to the applicable date hereinafter
specified, a notice describing the event and stating the effect, if any,
that such event will have upon the Exercise Rate, and (A) the date on which
a record is to be taken for the purpose of a distribution referred to in
subparagraphs (a), (c) or (d) above, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled
to such distribution are to be determined, or (B) the date on which any
subdivision, combination or other capital reorganization or
reclassification or any consolidation, merger, sale or conveyance referred
to in subparagraphs (a) or (b) above or such Liquidation is expected to
become effective.
The Company will at all times reserve and keep available for issuance
upon exercise of this Warrant the number of shares of Common Stock that is
equal to the Exercise Rate; provided, however, that nothing contained
herein shall be construed to preclude the Company from satisfying its
obligations in respect of the exercise of this Warrant by delivery of
shares of Common Stock that are held in the treasury of the Company. The
Company covenants that all shares of Common Stock that shall be issued upon
exercise of this Warrant will, upon issue, be fully paid and nonassessable
and not subject to any preemptive rights.
The shares of Common Stock issuable upon exercise of this Warrant when
the same shall be issued in accordance with the terms hereof are hereby
declared to be and shall be fully paid nonassessable shares of Common Stock
and not liable to any calls or assessments thereon, and the holders thereof
shall not be liable for any further payments in respect thereof.
"Common Stock" when used in Section 4 with reference to the Common
Stock with respect to which this Warrant is exercisable, shall mean only
Common Stock as authorized by the Restated Certificate of Incorporation of
the Company, as amended to the date hereof, and any shares into which such
Common Stock may thereafter have been changed, and, when otherwise used in
Section 4, shall also include shares of the Company of any other class or
series, whether now or hereafter authorized, that ranks
5
or is entitled to participation, as to payment of assets upon Liquidation
and payment of dividends, substantially on a parity with such Common Stock
or other class of shares into which such Common Stock may have been
changed.
The Company will not, by amendment of its Certificate of Incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to
be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Section
4 and in the taking of all such action as may be necessary or appropriate
in order to protect the conversion privilege of the holder of this Warrant
against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (1) will not increase the par value of any
shares of stock receivable upon exercise of this Warrant above the Purchase
Price then in effect, and (2) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of stock upon the exercise in
full of this Warrant from time to time outstanding.
5. Fractional Interests. The Company shall not be required to issue
fractional shares on the exercise of a Warrant. If any fraction of a share
would be issuable on the exercise of a Warrant (or specified portion thereof),
the Company shall pay an amount in cash equal to the current market price per
share of Common Stock (as defined in Section 6) multiplied by such fraction.
6. Definition of Current Market Value. The "Current Market Price"
on any given day shall be: (i) if the Common Stock is listed or admitted to
unlisted trading privileges on any exchange registered with the Securities and
Exchange Commission as a "national securities exchange" under the Securities
Exchange Act of 1934 (a "National Securities Exchange"), the last sales price of
the shares of Common Stock on the National Securities Exchange in or nearest the
City of New York on which the shares of Common Stock shall be listed or admitted
to unlisted trading privileges (or the quoted closing bid if there be no sales
on such National Securities Exchange) on the most recently completed trading day
prior to such day; or (ii) if the Common Stock is not so listed or admitted, the
closing sales price of a share of Common Stock as quoted in The Nasdaq Stock
Market on the most recently completed trading day prior to the day in question;
or (iii) if the Common Stock is not so quoted, the mean between the high and low
bid prices of the shares of Common Stock in the over-the-counter market on the
most recently completed trading day prior to the day in question as reported by
National Quotation Bureau Incorporated or similar organization.
7. Taking of Record; Stock and Warrant Transfer Books. In the
case of all dividends or other distributions by the Company to the holders of
its Common Stock with respect to which any provision of Section 4 refers to the
taking of a record of such holders, the Company will in each such case take such
a record and will take such record as of the close of business on a Business
Day. The Company will not at any time, except upon dissolution,
6
liquidation or winding up of the Company, close its stock transfer books or
Warrant transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.
8. Restrictions on Transferability. This Warrant was originally
issued in a transaction exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and neither this
Warrant nor any shares of Common Stock issuable upon the exercise hereof were
then registered under the Securities Act. Unless this Warrant or such shares
were subsequently registered under the Securities Act and sold by the holder
thereof in accordance with such registration, this Warrant or such shares, as
the case may be, may not be sold by the holder hereof or of such shares unless
this Warrant or such shares is or are subsequently registered under the
Securities Act or an exemption from such registration is available. The shares
of Common Stock issuable hereunder will be an appropriate restrictive legend as
is required by the Securities Act or any state blue sky laws. The holder of
this Warrant, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section and represents to the Company that it is acquiring
the Warrant and the Common Stock issuable hereunder solely for its own account,
for the purpose of investment and not with a view to distributing or selling it
or any part thereof in violation of the Securities Act, but subject,
nevertheless, to any requirement of law that the disposition of such holder's
property be at all times within its control.
9. Replacement. Upon receipt of evidence reasonably satisfactory to
the Company (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of this Warrant, and in
the case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Company (provided that the holder's own agreement
shall be satisfactory), or, in the case of any such mutilation upon surrender of
this Warrant, the Company shall (at its expense) execute and deliver in lieu of
this Warrant a new warrant of like kind dated the date of such lost, stolen,
destroyed or mutilated Warrant.
10. Notice Generally. Any notice, demand or delivery pursuant to
the provisions hereof shall be sufficiently given or made if sent by first class
mail, postage prepaid, addressed to the holder of this Warrant or of the Common
Stock issued upon the exercise hereof at its last known address appearing on the
books of the Company, or, except as herein otherwise expressly provided, to the
Company at its office, 5333 Westheimer, Suite 1000, Houston, Texas 77056-5407,
Attention of the President, or such other address as shall have been furnished
to the party giving or making such notice, demand or delivery.
11. Voting Rights, Dividends. This Warrant does not grant the holder
hereof any voting rights or other rights as a stockholder of the Company. No
dividends are payable or will accrue on this Warrant or the shares purchasable
hereunder until, and except to the extent that, this Warrant is exercised.
12. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY THE LAW OF THE
STATE OF DELAWARE.
7
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed this ____ day of September, 1995.
AMERICAN ECOLOGY CORPORATION
By: ---------------------------------
Name:
Title:
8
SUBSCRIPTION NOTICE
(To be executed only upon exercise of Warrant)
_____________________________, being the undersigned registered owner
of this Warrant irrevocably exercises this Warrant for and purchases __________
shares of the Common Stock, par value $.01 per share (the "Common Stock"), of
American Ecology Corporation, constituting all or part of the shares of Common
Stock purchasable with this Warrant, and herewith makes payment therefor, all at
the price and on the terms and conditions specified in this Warrant and requests
that certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) together with, if such
certificates do not represent all the shares of Common Stock purchasable with
this Warrant, a new Warrant, identical to the canceled Warrant except with
respect to the number of shares of Common Stock evidenced thereby, for the
remaining unsold shares of Common Stock, be issued in the name of and delivered
to the undersigned at the address set forth below.
Dated: ---------------------
-------------------------------------
Name of Warrant Holder
By: ---------------------------------
Name:
Title:
-------------------------------------
Street Address
-------------------------------------
City State Zip Code
9
EX-99.4
5
PRESS RELEASE
EXHIBIT 99.4
[LETTERHEAD OF AMERICAN ECOLOGY CORPORATION]
FOR IMMEDIATE RELEASE CONTACT: Edmund J. Gorman
95-12 Stephen W. Travers
(713) 624-1900
AMERICAN ECOLOGY ANNOUNCES COMPLETION OF DEFINITIVE PURCHASE AGREEMENT
(HOUSTON) September 22, 1995 - American Ecology Corporation today
announced the completion of a definitive Purchase Agreement defining terms for
the recently announced $5,000,000 investment in the Company by five of its
directors. As stated in the Purchase Agreement:
. The investing directors, John Harris, Edward Heil, Jack Lemley, Paul
Schutt and Harry Phillips, Jr., invested $3,250,000 on September 12,
1995, and agreed to assure the funding of an additional $750,000 by
September 30, 1995. Mr. Phillips agreed to fund the remaining
$1,000,000 by January 5, 1996.
. In exchange for these investments, the Company will issue an aggregate
of 105,264 shares of the Company's newly designated Series D
Cumulative Convertible Preferred Stock and warrants to purchase
1,052,640 shares of the Common Stock of the Company at an exercise
price of $4.75 per share. Each share of the new preferred stock (i)
is convertible into ten shares of the Common Stock of the Company,
(ii) will receive a mandatory cumulative dividend at an annual rate of
8.375%, payable quarterly, and (iii) will have a liquidation
preference equal to $47.50 per share plus any accumulated dividends
attributable to such share. The warrants will expire if not exercised
prior to September 12, 1999.
A special committee of American Ecology's Board of Directors, consisting of
those members who did not participate as investors in the transaction,
negotiated and evaluated the terms of the agreement on behalf of the Company. In
connection with its evaluation, the special committee obtained an opinion from
McKenna & Company, an independent Houston-based investment banking firm, to the
effect that from a financial point-of-view, the terms of the investment pursuant
to the Purchase Agreement are fair to the stockholders of the Company.
American Ecology operates a nuclear waste disposal facility in Washington,
has received a license approval for a similar facility in California, has a
license application pending for a nuclear disposal facility in Nebraska, and
operates a nuclear processing facility in Tennessee. The Company also operates a
chemical waste disposal facility in Nevada and two in Texas. Services provided
by the Company include waste packaging, transportation, consulting,
pretreatment, disposal, fuels blending, recycling, and clean-up services. The
Company's common stock trades on the Nasdaq Stock Market under the symbol ECOL.
* * *