Exhibit 99.3
AMENDMENT NO. 1
TO PURCHASE AGREEMENT
AND DISCLOSURE LETTER
AMENDMENT NO. 1, dated June 8, 2000, to the Purchase Agreement dated March
29, 2000, (the "Agreement") and the Disclosure Letter dated March 29, 2000 (the
"Disclosure Letter"), each among Chemical Waste Management Inc., Rust
International, Inc., CNS Holdings, Inc. (together, the "Sellers") and GTS
Duratek, Inc. (the "Purchaser"). Capitalized terms used herein without
definition shall have the respective meanings assigned to them in the Agreement.
WHEREAS, the Sellers and the Purchaser desire to amend the Agreement and
the Disclosure Letter as set forth below;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Amendment No. 1, the parties hereto agree as follows:
1. Section 4.8(b) of the Agreement is amended to add the following at the
end thereof:
The Purchaser shall post replacement bonds for each of the Bonds set
forth in Section 4.8 of the Disclosure Letter (other than the three that
are designated "BID" and the one that is designated "AWARD" in the column
headed "Bond Number" on Annex 4.8 to the Disclosure Letter) on or prior to
the Closing Date (each, a "Replacement Bond"). At the Closing, the
Purchaser shall deliver (i) a fully executed copy of each Replacement Bond
(which Replacement Bond shall state prominently on its face the Bond which
it is replacing) and (ii) a copy of the transmittal letter for each
Replacement Bond addressed to the entity for which the Replacement Bond is
being posted requesting that such entity release and return the Bond which
is being replaced.
2. The first sentence of Section 4.8(c) of the Agreement is amended to read
in its entirety as follows:
(c) If any Seller or any Non-Company Affiliate shall not have been
completely and unconditionally released with respect to any Bond or
Guaranty (any such Bonds or Guarantees being referred to as "Outstanding")
on or prior to Closing, then, so long as Purchaser has complied with its
obligations under Section 4.8(b), the Closing shall nevertheless occur and
Purchaser shall (i) (A) with respect to the Outstanding Bonds identified in
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Section 4.8 of the Disclosure Letter for which Replacement Bonds have not
been delivered in accordance with Section 4.8(b), deliver to the Sellers or
to one or more Non-Company Affiliates designated by the Sellers, at the
Closing, an irrevocable,
standby letter of credit (the "Standby LoC") from a bank or other financial
institution reasonably satisfactory to the Sellers (the "Issuer"), in an
amount equal to the aggregate face amount of such Outstanding Bonds, and
(B) with respect to the Outstanding Guarantees identified in Section 4.8 of
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the Disclosure Letter, take the actions specified in Section 4.8(d), (e),
(f) and (g), and (ii) indemnify and hold harmless each Seller and each Non-
Company Affiliate that is party to, or has furnished security in connection
with, any Outstanding Bond or Guaranty from any and all losses, claims,
liability or damage (including reasonable attorneys' fees and other costs
and expenses) in respect of any such Outstanding Bonds or Guaranties,
including, without limitation, interest on any un-reimbursed payment made
by such Seller or Non-Company Affiliate at the prime rate posted from time
to time by the Chase, N.A. plus two percent (2%) per annum from the date of
payment until the date reimbursed, except that the Purchaser shall not be
required to indemnify or hold harmless any Seller or Non-Company Affiliate
to the extent that the losses, claims, liability or damage arise from
events or conditions that entitle any Purchaser Indemnitee to
indemnification pursuant to Section 7.2 hereof, taking into consideration
the deductible and the maximum limitation, as applicable, in Section
7.2.1(c).
3. Section 4.8(d) of the Agreement is amended to add the following at the
end of clause (i) thereof:
Without limiting the foregoing, the Purchaser will, at such time as
the Purchaser and Waste Management Inc. ("WMI") shall mutually agree, but
in any event no later than twelve months after the Closing Date, deliver to
the State of South of Carolina Budget and Control Board and the Department
of Health and Environmental Control of the State of South Carolina
(collectively, the "South Carolina Agencies") a written guaranty by the
Purchaser containing the same terms as the Corporate Guarantee of
Responsibility for Chem-Nuclear at Xxxxxxxx delivered by Waste Management
Inc. in 1982 and referred to in Section 4.8 of the Disclosure Letter (the
"Xxxxxxxx Guaranty").
4. The following clauses (e) and (f) are added to Section 4.8 of the
Agreement:
(e) Until the Guarantee Release is obtained for the Xxxxxxxx Guaranty,
the Purchaser will
(i) continue in effect the American Nuclear Insurance $100 million
facility liability coverage with respect to the Xxxxxxxx Facility with
substantially the same deductible, coverage and exclusions as are in effect
immediately prior to the Closing, with WMI and its affiliates as additional
insureds;
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(ii) maintain in effect with AIG additional property insurance with
respect to the Xxxxxxxx Facility covering claims for on-site and off-site
clean-up of pre-existing and new conditions, claims of third parties for
on-site and off-site bodily injury and property damage and legal defense of
any such claims with coverage limits of $120 million per incident and $120
million aggregate and containing the terms and conditions set forth in
Annex 4.8(e) to the Disclosure Letter, provided that the Purchaser will pay
$1,136,628 of the total policy premium/placement fee/tax associated with
such policy and WMI will pay $866,272 of the total policy premium/placement
fee/tax associated with such policy;
(iii) twelve months after the Closing Date furnish to WMI and thereafter
maintain in effect an irrevocable standby letter of credit or an
irrevocable surety bond from a bank or other financial institution
reasonably acceptable to WMI in the amount of $5 million, which letter of
credit or surety bond may be drawn by WMI or any of its affiliates by
delivering a certificate to the effect that (X) a claim has been asserted
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under the Xxxxxxxx Guaranty or (Y) the Purchaser has not notified WMI at
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least 30 days prior to any scheduled renewal date that such letter of
credit or surety bond has been renewed; and
(iv) eighteen months after the Closing Date, furnish to WMI and
maintain in effect an additional letter of credit or surety bond in the
amount of $5 million and otherwise meeting the requirements of clause
(iii);
provided that in lieu of the requirements of the preceding clauses (iii)
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and (iv), the Purchaser may at its election furnish to WMI and maintain in
effect an insurance policy issued by an insurance company reasonably
acceptable to WMI insuring WMI and its affiliates against all claims under
the Xxxxxxxx Guaranty, with coverage limits of $25 million per occurrence
and $25 million aggregate, with a deductible of no more than $1 million and
no exclusions other than those to which WMI shall have reasonably consented
in writing. Any insurance policy maintained pursuant to the preceding
clauses (i) or (ii) or proviso shall provide that WMI shall receive 30
days' advance notice of any material change, cancellation, expiration or
non-renewal of coverage and that, except as provided in clause (ii), WMI
and its affiliates shall not have any obligation to pay any premiums or
assessments thereunder but shall be entitled to pay premiums or assessments
not timely paid by the Purchaser in which event the Purchaser shall
promptly reimburse WMI or such affiliate the amount of such payment
together with interest thereon at the prime rate announced from time to
time by Chase, N.A. plus two percent (2%) per annum from the date such
payment is made to the date of reimbursement by the Purchaser. Any such
insurance shall provide primary coverage to WMI and its affiliates. None
of the State of South Carolina or the Budget and Control Board or
Department of Health and Environmental
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Control of the State of South Carolina will be a named insured or
additional insured under any insurance policy maintained pursuant to the
preceding clauses (i) or (ii) or proviso. The Purchaser shall make
available to WMI within 90 days after the Closing Date and at least
annually thereafter with copies of the policies of insurance referred to
above.
(f) Until the Guarantee Release is obtained for the Xxxxxxxx Guaranty,
(i) the Purchaser shall and shall cause Chem-Nuclear to (A) maintain
all of the property and equipment used at the Xxxxxxxx Facility in good
repair and working order, ordinary wear and tear excepted, and make all
necessary repairs and replacements or improvements necessary to conform to
good industry practice; (B) obtain and maintain in full force and effect
all material licenses, permits and other governmental authorizations
required for the operation of the Xxxxxxxx Facility; (C) comply in all
material respects with all applicable laws (including without limitation
all Environmental Laws), statutes, rules, regulations, judgments, orders,
decrees, licenses, permits (including without limitation all Environmental
Permits), concessions, franchises, leases or other agreements,
authorizations or approvals to which the Xxxxxxxx Facility or the operation
of the Xxxxxxxx Facility is subject, maintain procedures (including without
limitation procedures regarding inspection and approval of waste accepted
for disposal at the Xxxxxxxx Facility, recordkeeping, inspection of
trenches and caps and monitoring of Releases) to ensure such compliance
that are consistent with good industry practice and promptly cure any
instance of material non-compliance; and (D) if Chem-Nuclear shall propose
to enter into or amend, modify, supplement or seek a waiver under any
permit, license or other governmental authorization relating to the
Xxxxxxxx Facility or the operation of the Xxxxxxxx Facility or any
agreement with the State of South Carolina or the South Carolina Agencies
(collectively, the "State"), in a manner that changes the types of waste
that are permitted to be disposed of at the Xxxxxxxx Facility or that could
reasonably be expected to either increase the likelihood that a claim would
be made against WMI or its affiliates under the Xxxxxxxx Guaranty or to
increase the potential liability of WMI or its affiliates in the event of
such a claim under the Xxxxxxxx Guaranty, notify the Monitor (as defined
below) of such proposed permit, license, governmental authorization,
agreement, amendment, modification, supplement or waiver and provide the
Monitor with reasonable access to all communications, reports, and other
information related to such proposed permit, license, governmental
authorization, agreement, amendment, modification, supplement or waiver
consistent with the access provided to the Monitor pursuant to Section
4(f)(ii) below.
(ii) WMI shall be entitled to designate an environmental consulting firm
or person (the "Monitor"), to monitor and audit, at WMI's expense, the
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operations at the Xxxxxxxx Facility and the Purchaser's compliance with the
requirements of this Agreement and with good industry practice. WMI shall
promptly forward to the Purchaser copies of any written report by the
Monitor. The Purchaser shall ensure that the Monitor is provided reasonable
access to Xxxxxxxx and to Purchaser and Chem-Nuclear personnel, agents,
advisors, customers and relevant books and records at such times as the
Monitor may reasonably require. The Purchaser shall ensure that the
Monitor is provided reasonable access to (A) copies of each audit of the
operations at the Xxxxxxxx Facility by any regulator, insurer, customer or
customer organization or other person and (B) copies of any notice, order,
request for information, communication or report received by the Purchaser
or any of its affiliates in connection with any alleged Release or any
alleged violation of applicable law (including without limitation
Environmental Law), statute, rule, regulation, judgment, order, decree,
license, permit (including without limitation any Environmental Permit),
concession, franchise, lease or other agreement, authorization or approval
to which the Xxxxxxxx Facility or the operations at the Xxxxxxxx are
subject. The Monitor shall not be entitled to conduct tests of the soil,
surface or subsurface waters, and air quality at, in on, beneath or about
the Xxxxxxxx Facility or the related real property, or any other real
property operated by the Purchaser or its affiliates without the prior
written consent of the Purchaser. WMI shall, and shall cause the Monitor
to, cooperate with Purchaser to preserve the confidentiality of the
information made available to the Monitor pursuant hereto and to avoid the
waiver of any applicable privileges against disclosure with respect
thereto, provided that the foregoing will not prohibit either WMI or the
Purchaser from disclosing such information to the State.
(iii) The Purchaser shall implement at its expense any and all
investigation, remediation, removal and response actions which are
necessary to maintain in effect the insurance called for by Section 4.8(e).
(iv) In the event that (a) the State asserts or threatens to assert a
claim under the Xxxxxxxx Guaranty and there is no Alternative Source (as
defined below) to address the matter that is the subject of such claim or
(b) any insurer providing insurance called for by Section 4.8(e) has given
notice of termination of such insurance due to the failure of the Purchaser
or its affiliates to appropriately respond to any finding or recommendation
made by such insurer with respect to the Xxxxxxxx Facility, then Purchaser
and its affiliates shall, if the State approves, permit WMI or its
designees to have access to the Xxxxxxxx Facility and to undertake, under
the control of WMI or such designee and at Purchaser's expense, such
investigation, testing, clean-up, remediation or response as WMI or such
designee, with the consent of the State, deems reasonably necessary or
appropriate. The Purchaser shall not be required to pay the expense of WMI
or its designee pursuant to the previous sentence to the extent that the
expense arises
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from events or conditions that entitle any Purchaser Indemnitee to
indemnification pursuant to Section 7.2 hereof, taking into consideration
the deductible and the maximum limitation, as applicable, in Section
7.2.1(c). "Alternative Source" means, with respect to any matter that is
the subject of a claim or threatened claim under the Xxxxxxxx Guaranty, any
of the following: (v) the letters of credit or bonds referred to in Section
4.8(e) (iii) and (iv) above are in amounts sufficient to pay the costs of
addressing such matter and Purchaser is diligently addressing such matter
to the satisfaction of the State; (w) Purchaser has sufficient financial
and other resources to address such matter and does diligently address such
matter to the satisfaction of the State; (x) any insurer which has issued
an insurance policy with sufficient coverage available to pay the costs of
addressing such matter has confirmed that such matter is covered by such
insurance and Purchaser (or such insurer) is diligently addressing such
matter to the satisfaction of the State; (y) the State has confirmed that
the costs of addressing such matter will be paid out of the closure or
long-term care funds maintained for the Xxxxxxxx Facility and not pursuant
to the Xxxxxxxx Guaranty; or (z) the State has confirmed that it will not
seek to recover such costs under the Xxxxxxxx Guaranty.
(g) All surety bonds and letters of credit identified in Section 4.8
of the Disclosure Letter must be replaced at Closing in accordance with
Section 4.8(b), provided that any such other bonds or letters of credit not
so released in accordance with 4.8(b) may be satisfied in accordance with
Section 4.8(c). Notwithstanding the foregoing, (i) no additional action
need be taken at Closing if the Guaranty Release for the Guarantee of Lease
(Lakewood Office) or the Guarantee to the Illinois Department of Safety
have not been obtained, provided that until the Guarantee Release for the
Guarantee to the Illinois Department of Safety is obtained, the Purchaser
and its affiliates will not perform any significant increase in the work
under the related contract, (ii) no additional action need be taken at or
after the Closing with respect to the Guaranty Release for the North
Carolina Project Guarantee and (iii) no action need be taken at or after
the closing with respect to the three bonds that are designated "BID" and
the one that is designated "AWARD" in the column headed "Bond Number" on
Annex 4.8 to the Disclosure Letter.
5. Section 8.4(a) of the Agreement is amended by changing the date in
clause (ii) thereof to noon, Eastern time, on June 9, 2000.
6. Section 8.18 of the Agreement is amended to add the following at the end
thereof:
In addition to any other remedies which the Sellers or Waste Management
Inc. may have at law or in equity, the Purchaser hereby acknowledges that
the harm to the Sellers and WMI resulting from breaches by the Purchaser of
its
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obligations under the last sentence of Section 4.8(d)(i) and under Section
4.8(e) cannot be adequately compensated by damages. Accordingly, the
Purchaser agrees that the Sellers and WMI shall have the right to have such
obligations specifically performed by the Purchaser and the Sellers and WMI
shall have the right to obtain an order or decree of such specific
performance in the courts referred to in Section 8.14 hereof.
7. Section 1.3(a) of the Disclosure Letter is amended to add the following
paragraph (f):
(f) Deferred income taxes.
8. The following is added to Section 4.8 of the Disclosure Letter under
Chem-Nuclear Guaranties: North Carolina Project/CWM/LSR # 08142. Annex 4.8(e) to
this Amendment No. 1 is added as Annex 4.8(e) to the Disclosure Letter.
9. To the extent permissible under WMI's master services agreements for
geosynthetic liners, WMI will provide the Purchaser their most advantageous
prices available under such agreements for such product for use in performing
the Oak Ridge Contract. Nothing herein shall obligate WMI to provide such
pricing if not allowable under such master services agreements.
10. The Purchaser and the Sellers agree that the adjustments to the Initial
Chem-Nuclear Purchase Price and the Initial Federal Services Purchase Price
based on the Chem-Nuclear Estimated Adjusted Closing Stockholders Equity and the
Federal Services Estimated Adjusted Closing Stockholders Equity, as contemplated
by Sections 1.2(c)(i) and 1.2(c)(ii), respectively, shall each be $0, and that
the Initial Purchase Price to be delivered at Closing shall be $65.0 million, of
which $10.0 million shall be deposited into an escrow account with the Escrow
Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
CHEMICAL WASTE MANAGEMENT INC.
By: /S/ Xxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President & Secretary
CNS HOLDINGS, INC.
By: /S/ Xxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President & Secretary
RUST INTERNATIONAL, INC.
By: /S/ Xxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President & Secretary
GTS DURATEK, INC.
By: /S/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Financial Officer
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