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SETTLEMENT AND RELEASE AGREEMENT

Settlement Agreement

SETTLEMENT AND RELEASE AGREEMENT | Document Parties: PERMA FIX ENVIRONMENTAL SERVICES INC | PERMA-FIX ENVIRONMENTAL SERVICES, INC | SAFETY  ECOLOGY HOLDINGS CORPORATION | SunTrust Bank | TIMIOS NATIONAL CORPORATION You are currently viewing:
This Settlement Agreement involves

PERMA FIX ENVIRONMENTAL SERVICES INC | PERMA-FIX ENVIRONMENTAL SERVICES, INC | SAFETY ECOLOGY HOLDINGS CORPORATION | SunTrust Bank | TIMIOS NATIONAL CORPORATION

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Title: SETTLEMENT AND RELEASE AGREEMENT
Governing Law: Delaware     Date: 2/15/2013
Industry: Waste Management Services     Law Firm: Mintz Levin     Sector: Services

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EXHIBIT 99.1

 

SETTLEMENT AND RELEASE AGREEMENT

 

This SETTLEMENT AND RELEASE AGREEMENT (this “ Agreement ”), is entered into as of February 12,  2013, by and between PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware corporation (“ PESI ”), and SAFETY & ECOLOGY HOLDINGS CORPORATION, a Nevada corporation (“ SEC ” and, together with PESI, the “ PESI Parties ”), on the one hand, and TIMIOS NATIONAL CORPORATION, a Delaware corporation (formerly known as Homeland Security Capital Corporation, “ TNC ”), on the other hand.  The PESI Parties and TNC are hereinafter collectively referred to as the “ Parties .”

 

WHEREAS, the Parties entered into that certain Stock Purchase Agreement dated as of July 15, 2011 (the “ Purchase Agreement ”), for the sale by TNC and the purchase by PESI of all of the capital stock of SEC (the “ SEC Stock ”).  Capitalized words used and not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.

 

WHEREAS, as part of the Purchase Price paid for the SEC Stock, PESI issued to TNC a three year, non-negotiable, unsecured promissory note to the order of TNC in the principal amount of $2,500,000 (the “ October Note ”).

 

WHEREAS, as a result of payments made under the October Note, the outstanding unpaid principal balance and accrued interest due thereunder as of the date hereof is equal to $1,459,547.50.

 

WHEREAS, in connection with the Purchase Agreement, PESI, TNC and the Escrow Agent entered into that certain Escrow Agreement dated as of October 31, 2011 (the “ Escrow Agreement ”), pursuant to which PESI deposited $2,000,000 of the Cash Consideration into an account with the Escrow Agent (the “ Escrow Account ”) to be held and administered pursuant to the terms of the Escrow Agreement.

 

WHEREAS, pursuant to the terms of the Purchase Agreement and the Escrow Agreement, the Escrow Agent has previously delivered to PESI from the Escrow Account the sum of $1,500,000, leaving a principal balance of $500,000 therein, plus accrued interest, as of the date hereof (the “ Escrow Balance ”).

 

WHEREAS, certain additional disputes have arisen between the Parties under the Purchase Agreement for which PESI seeks indemnification pursuant to the Purchase Agreement, in particular, (i) PESI’s claim of breach of certain representations and warranties of TNC and SEC relating to a certain contract with W. R. Grace and Co., identified as Curtis Bay Bldg. 23 (the “ W.R. Grace Contract ”); and (ii) PESI’s claim of breach of the covenant of TNC and SEC, set forth in Section 5.20 of the Purchase Agreement, that the GAAP Liabilities (as defined in the Purchase Agreement) of SEC and its subsidiaries, on a consolidated basis, would not exceed $15,000,000 as of the Closing (together with the dispute described in clause (i) hereof relating to the W.R. Grace Contract, the “ Disputed Claims ”).

 

WHEREAS, notwithstanding any other provision in the Purchase Agreement, the October Note and the Escrow Agreement to the contrary, the Parties desire to settle the Disputed Claims and, additionally, settle and release any other Claims (as defined below) arising under the Purchase Agreement with respect to a claimed breach of (i) the representations and warranties contained in Article II and Article IV of the Purchase Agreement, and (ii) the covenants contained in Article V of the Purchase Agreement (except for Sections 5.13, 5.14, 5.15, 5.16, 5.17 and 5.18 of the Purchase Agreement, the obligations under which are expressly agreed by the Parties to continue in full force and effect in accordance with the terms of the Purchase Agreement (the “ Continuing Covenants ”)) (the matters described in clauses (i) and (ii), other than the Continuing Covenants, are, together with the Disputed Claims, collectively referred to herein as the “ Subject Claims ”), as follows:  (a) TNC shall immediately cancel, terminate and deliver to PESI the October Note and PESI shall issue the New Note (as defined herein) to TNC in replacement of the October Note, (b) the Escrow Balance shall be released to TNC, (c) the Parties shall terminate irrevocably all of their rights and obligations with respect to (x) the indemnification provisions set forth in Article VIII of the Purchase Agreement (the “ Indemnification Provisions ,” except with respect to the Continuing Covenants, for which the Indemnification Provisions are expressly agreed by the Parties to continue in full force and effect in accordance with the terms of the Purchase Agreement and (y) the matters described in Section 9.3 of the Purchase Agreement, and (d) the Parties shall release each other from all liabilities in respect of the Subject Claims, all with immediate effect, as more specifically and on the terms and conditions set forth herein.

 

 

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NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1.             Settlement of Claims .  As full and final settlement of the Subject Claims, the Parties shall undertake the following transactions, all such transactions to be mutually conditioned upon the completion of such other transaction:

 

(a)            TNC does hereby terminate, and render null and void, the October Note, and PESI hereby agrees to issue a new two-year, non-negotiable, unsecured note in the principal amount of TWO HUNDRED TWENTY NINE THOUSAND SEVEN HUNDRED SEVENTY-THREE DOLLARS AND 75/100 CENTS ($229,773.75) in substantially the form of Exhibit A hereto (the “ New Note ”).

 

(b)            TNC shall immediately deliver to PESI, at PESI’s corporate office located at 8302 Dunwoody Place, Suite 250, Atlanta, GA  30350, the original October Note and any and all copies thereof.

 

(c)            TNC and PESI hereby agree to execute the instruction letter to the Escrow Agent, in substantially the form of Exhibit B hereto, releasing the entire Escrow Balance to TNC.

 

(d)            By their execution of this Agreement, each of the PESI Parties and TNC hereby acknowledges and agrees that, effective as of the date hereof, the Indemnification Provisions are irrevocably terminated and of no further force or effect, except with respect to the Continuing Covenants, for which the Indemnification Provisions are expressly agreed by the Parties to continue in full force and effect in accordance with the terms of the Purchase Agreement.

 

(e)            By their execution of this Agreement, each of the PESI Parties and TNC hereby acknowledges and agrees that, effective as of the date hereof, the representations and warranties contained in Article II and Article IV of the Purchase Agreement, (ii) the covenants contained in Article V of the Purchase Agreement (except for the Continuing Covenants, the obligations under which are expressly agreed by the Parties to continue in full force and effect in accordance with the terms of the Purchase Agreement), and (iii) the provisions of Section 9.3 of the Purchase Agreement are irrevocably terminated and of no further force or effect.

 

2.             Continuation of Purchase Agreement .  Except as expressly amended by this Agreement, the Purchase Agreement shall remain in full force and effect in accordance with its terms.

 

 

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3.             Mutual Releases .

 

(a)             Certain Definitions .  As used herein, the following terms shall have the following meanings:

 

Associated Party ” means, with respect to any specified Person, to the extent applicable, such Person’s (i) predecessors, successors, executors, administrators, trusts, spouse, heirs and estate, (ii) past, present and future assigns, agents and representatives, (iii) each entity that such Person has the power to bind (by such Person’s acts or signature) or over which such Person directly or indirectly exercises control and (iv) each entity of which such Person owns, directly or indirectly, a majority of the outstanding equity, beneficial, proprietary, ownership or voting interests.

 

Claims ” mean and include any and all agreements, causes of action, claims, commitments, contracts, controversies, covenants, indebtedness, debts, damages, demands, disputes, obligations, liabilities, rights and suits of every kind and nature, whether in law or equity, whether known or unknown, matured or unmatured, accrued or unaccrued, liquidated or unliquidated, asserted or unasserted, fixed or contingent, and whether sounding in contract, statute, tort, fraud, misrepresentation or other legal theory.

 

PESI Releasee ” means PESI, SEC, each of SEC’s and PESI’s respective present and former directors, officers, employees, stockholders, agents and representatives, and the respective affiliates (including subsidiaries), successors and assigns of each of the foregoing.

 

TNC Releasee ” means TNC, TNC’s present and former directors, managers, officers, employees, members, agents and representatives, and the respective affiliates (including subsidiaries), successors and assigns of each of the foregoing; provided, however, such term does not include Christopher P. Leichtweis (“Leichtweis”).

 

Released Claims ” means, (i) with respect to Section 3(b) below, Claims which TNC and/or any of its Associated Parties has had or claims to have had, now has or claims to have, or may in the future have against any PESI Releasee by reason of any matter, cause or thing whatsoever arising from, connected with, or in any way relating to or resulting from the Subject Claims; and (ii) with respect to Section 3(c), Claims which PESI, SEC and/or any of their respective Associated Parties has had or claims to have had, now has or claims to have, or may in the future have against any TNC Releasee by reason of any matter, cause or thing whatsoever arising from, connected with, or in any way relating to or resulting from the Subject Claims; provided, however, that the foregoing release  shall not apply to, and shall not relieve any party hereto from, its obligations under this Agreement, the New Note and the Purchase Agreement (but only with respect to the Continuing Covenants).

 

(b)             Release by TNC .  Effective as of the date hereof, TNC, on behalf of itself and each of its Associated Parties:

 

(i)          releases and forever discharges each PESI Releasee of and from each Released Claim;

 

(ii)         waives the benefits of, and any rights arising under, any statute or common law principle that would provide that the foregoing release does not extend to claims that TNC does not know or suspect to exist at the time of executing this Agreement;

 

 

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(iii)        represents and warrants that, (A) neither TNC nor any of its Associated Parties has assigned, transferred, or purported to assign or transfer, to any Person any Released Claim, its interest in the October Note or the Escrow Agreement, except for YA Global Investments, L.P. (“ YA ”), who has consented to the terms of this Agreement and the transactions contemplated hereby and shall release its security interest in the October Note and Escrow Agreement as a condition to this Agreement, (B) to TNC’s best knowledge, no other Person or entity has any interest in any of the Released Claims, the October Note or the Escrow Agreement, other than the Management Investors (as such term is defined in the Purchase Agreement) and YA, whose waivers and releases therein are a condition to this Agreement, (C) this Agreement has been duly and validly executed and delivered by TNC, (D) this Agreement is a valid and binding obligation of TNC, and is enforceable against TNC in accordance with its terms, and (E) no authorization, instruction, consent or approval of any Person is required to be obtained by TNC in connection with the execution and delivery of this Agreement or the performance hereof (other than (1) the consent and approval of the board of directors or similar body of TNC, and (2) any waivers and releases from the Management Investors required in connection with the consummation of this Agreement, with respect to any claim of right or interest by such persons in the Escrow Agreement and the Promissory Note that are afforded such persons by reason of that certain Exchange Agreement dated as of October 31, 2011 (the “ Exchange Agreement ”), which consents, approvals, waivers and releases have been obtained); and

 

(iv)       irrevocably covenants to refrain from asserting any claim or demand, or commencing, instituting or causing to be commenced, any proceeding of any kind against any PESI Releasee based upon any Released Claim, it being understood that if TNC brings any claim, suit, or action against any PESI Releasee in administrative proceedings, in arbitration or admiralty, at law, in equity, or mixed, with respect to any Released Claim, then TNC shall indemnify such PESI Releasee in the amount of any final non-appealable judgment rendered by a court of competent jurisdiction or settlement, and any related cost (including, without limitation, reasonable legal fees), entered against, paid or incurred by the PESI Releasee as a result of such proceeding.

 

(c)             Release by PESI and SEC.   Effective as of the date hereof, each of PESI and SEC, on behalf of itself and each of their respective Associated Parties:

 

(i)          releases and forever discharges each TNC Releasee of and from each Released Claim;

 

(ii)         waives the benefits of, and any rights arising under, any statute or common law principle that would provide that the foregoing release does not extend to claims that PESI or SEC does not know or suspect to exist at the time of executing this Agreement;

 

(iii)        represents and warrants that  (A) neither PESI, SEC nor any of their respective Associated Parties has assigned, transferred, or purported to assign or transfer, to any Person any Released Claim, its interest in the October Note or the Escrow Agreement, (B) to each of SEC’s and PESI’s best knowledge, no other Person or entity has any interest in any of the Released Claims, the October Note or the Escrow Agreement, other than the Management Investors, whose waivers and releases therein are a condition to this Agreement, (C) this Agreement has been duly and validly executed and delivered by each of PESI and SEC, (D) this Agreement is a valid and binding obligation of each of PESI and SEC, and is enforceable against each of PESI and SEC in accordance with its terms, and (v) no authorization, instruction, consent or approval of any Person is required to be obtained by PESI or SEC in connection with the execution and delivery of this Agreement or the performance hereof (other than the consent and approval of the Board of Directors of PESI and SEC, which consents and approvals have been obtained); and

 

 

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(iv)        irrevocably covenants to refrain from asserting any claim or demand, or commencing, instituting or causing to be commenced, any proceeding of any kind against any TNC Releasee based upon any Released Claim, it being understood that if PESI or SEC brings any claim, suit, or action against any TNC Releasee in administrative proceedings, in arbitration or admiralty, at law, in equity, or mixed, with respect to any Released Claim, then PESI and/or SEC, as the case may be, shall indemnify such TNC Releasee in the amount of any final non-appealable judgment by a court of competent jurisdiction or settlement, and any related cost (including without limitation reasonable legal fees), entered against, paid or incurred by the TNC Releasee as a result of such proceeding.

 

4.

Miscellaneous .

 

(a)             Entire Agreement .  This Agreement states the entire agreement of the Parties concerning the subject matter hereof, and supersedes all prior agreements, written or oral, between or among them concerning such subject matter.

 

(b)             Amendments; Waivers .  This Agreement may be amended only by the written agreement of each of the Parties, and compliance with any provision of this Agreement may be waived only by the written agreement of the party that is adversely affected by such waiver.

 

(c)             Succ


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