EXHIBIT 4.1
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT ("Agreement") dated as of December 9, 2002, by and
among SystemOne Technologies Inc. (f/k/a Xxxxxx Industries Inc.), a Florida
corporation (the "Company"), each person or entity listed on Schedule I as a
holder of the Company's currently outstanding 8.25% Subordinated Convertible
Notes due February 23, 2003 (collectively, the "Junior Note Holders") and each
person or entity listed on Schedule II as a holder of the Company's currently
outstanding 16% Promissory Notes due November 30, 2002 (collectively, the
"Secured Note Holders" and collectively with the Junior Note Holders, the
"Holders").
W I T N E S S E T H:
WHEREAS, the parties hereto believe that it is advisable and in their
best interests and the best interest of the Company to recapitalize the Company
by:
(1) exchanging the Company's currently outstanding 8.25% Subordinated
Convertible Notes due February 23, 2003 in the amounts set forth on Schedule I
(the "Current Junior Notes") for (i) 8.25% Subordinated Convertible Notes due
December 31, 2005 with interest which when due will be added to the principal
amount of such notes through December 31, 2002 and thereafter shall be paid in
cash in the form of Exhibit A attached hereto (the "New Junior Partial Cash Pay
Notes"), (ii) 8.25% Subordinated Convertible Notes due December 31, 2005 with
interest which when due will be added to the principal amount for the life of
such notes in the form of Exhibit B attached hereto (the "New Junior PIK Pay
Notes" and collectively with the New Junior Partial Cash Pay Notes, the "New
Junior Notes"), and (iii) Warrants for the purchase of 750,000 shares of the
Company's common stock, $.001 par value per share ("Common Stock") at an
exercise price of $.01 per share expiring on December 31, 2005 in the form of
Exhibit C attached hereto (the "New Warrants"); and
(2) exchanging the Company's currently outstanding 16% Promissory Notes
due November 30, 2002 in the amount set forth on Schedule II (the "Current
Secured Notes" and collectively with the Current Junior Notes, the "Current
Securities") for Promissory Notes due December 31, 2005 in the form of Exhibit D
attached hereto (the "New Secured Notes" and collectively with the New Junior
Notes, the "New Notes" and collectively with the New Warrants, the "New
Securities").
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
EXCHANGE OF SECURITIES
Section 1.1 Exchange of Subordinated Convertible Notes. On or prior
to the Closing Date (as defined below), each Junior Note Holder will deliver to
the Company each of such holder's Current Junior Notes. On the Closing Date, the
Company will cancel each of the Current Junior Notes and deliver to each Junior
Note Holder (i) a New Junior Partial Cash Pay
Note in a principal amount equal to 50 percent of the sum of the principal
amount of such Junior Note Holder's Current Junior Note plus all accrued and
unpaid interest thereon to and including the day prior to the Closing Date, (ii)
a New Junior PIK Pay Note in a principal amount equal to 50 percent of the sum
of the principal amount of such Junior Note Holder's Current Junior Note plus
all accrued and unpaid interest thereon to an including the day prior to the
Closing Date, and (iii) a New Warrant for the purchase of that number of shares
of Common Stock equal to the product of (A) the quotient of (x) the outstanding
principal amount of such Junior Note Holder's Current Junior Note including all
accrued and unpaid interest to an including the day prior to the Closing Date,
over (y) the aggregate outstanding principal amount of all outstanding Current
Junior Notes including all accrued and unpaid interest to an including the day
prior to the Closing Date, times (B) 750,000. The principal amount, including
all accrued interest on each Junior Note Holder's Note as of September 30, 2002,
and the number of New Warrants each Junior Note Holder will receive is as
indicated next to such Junior Note Holder's name on Schedule I attached hereto.
Section 1.2 Exchange of Secured Notes and Amendment of Loan
Agreement. On or prior to the Closing Date the Company and each Secured Note
Holder will execute and deliver that certain Fifth Amendment to Loan Agreement
(the "Fifth Amendment") attached hereto as Exhibit E. On or prior to the Closing
Date, each Secured Note Holder will deliver to the Company each of such holder's
Current Secured Notes. On the Closing Date, the Company will cancel each of the
Current Secured Notes and deliver to each Secured Note Holder a New Secured Note
in a principal amount equal to the principal amount of such Secured Note
Holder's Current Secured Note plus all accrued and unpaid interest thereon to
and including the day prior to the Closing Date. The principal amount and
accrued interest on each Secured Note Holder's Current Secured Note as of
September 30, 2002 is indicated next to such Secured Note Holder's name on
Schedule II.
ARTICLE II
CLOSING
The closing shall take place at the offices of Xxxxxxxxx Traurig, P.A.,
at 10:00 a.m., local time following the date on which the last of the
conditions set forth in Article V hereof shall have been fulfilled or waived in
accordance herewith. The date on which the Closing occurs is referred to as the
"Closing Date".
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. The
Company hereby makes the following representations and warranties to each of the
Holders as of the date hereof and the Closing Date:
(a) Organization and Qualification; Material Adverse
Effect. The Company is a corporation duly incorporated and existing in good
standing under the laws of the State of Florida and the Company has the
requisite corporate power to own its properties and to
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carry on its business as now being conducted. The Company does not have any
direct or indirect subsidiaries. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary other than those in which the failure so to qualify
would not have a Material Adverse Effect. "Material Adverse Effect" means any
adverse effect on the business, operations, properties, prospects, or financial
condition of the Company and which is material to the Company, and any material
adverse effect on the transactions contemplated under this Agreement or any
other agreement or document contemplated hereby or thereby.
(b) Authorization; Enforcement. (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement and to issue the New Securities in accordance with the terms hereof,
and to issue the Underlying Shares (as hereinafter defined) in accordance with
the terms of the New Junior Notes and the New Warrants, respectively, (ii) the
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby and thereby, including the issuance
of the New Securities and the Underlying Shares, have been duly authorized by
all necessary corporate action, and no further consent or authorization of the
Company or its Board of Directors or shareholders is required, (iii) this
Agreement has been duly executed and delivered by the Company, and (iv) this
Agreement constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or other laws relating to, or affecting
generally the enforcement of creditors' rights and remedies or by other
equitable principles of general application.
(c) Capitalization. Schedule III sets forth (i) the
authorized capital stock of the Company, (ii) all currently issued and
outstanding capital stock and derivative securities exercisable for or
convertible into capital stock of the Company, and (iii) the issued and
outstanding capital stock and derivative securities exercisable for or
convertible into shares of capital stock of the Company after the transactions
contemplated hereby determined as of September 30, 2002. All of the outstanding
shares of capital stock as set forth on Schedule III have been validly issued
and are fully paid and non-assessable. No shares of Common Stock or the
Company's Series B Preferred Stock, $1.00 par value per share, Series C
Preferred Stock, $1.00 par value per share, or Series D Preferred Stock, $1.00
par value per share (collectively "Preferred Stock") are entitled to preemptive
rights. All dividends on the Preferred Stock have been recorded by the Company
as paid in shares of the applicable series of Preferred Stock at each Dividend
Payment Date (as defined in the Company's Articles of Incorporation) subsequent
to issuance of such underlying shares and have thereafter accrued dividends at
the prescribed rate. Except as set forth on Schedule III, there are no other
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights exchangeable or convertible into, any
shares of capital stock of the Company, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of capital stock of the Company or options, warrants,
scrip, rights to subscribe to, or commitments to purchase or acquire, any
shares, or securities or rights convertible into shares, of capital stock of the
Company. No event has occurred or will occur as a result of the execution and
delivery of this Agreement and the consummation of the transactions
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contemplated hereby, that, assuming the due execution and delivery of the Waiver
(as defined in Section 5.1(i) below), requires any adjustment in the conversion
price or ratio with respect to the Company's outstanding securities pursuant to
any anti-dilution provisions thereunder, nor as a result thereof will the number
of shares of capital stock issuable upon such conversion or exercise, as the
case may be, be subject to adjustment.
(d) Issuance of Common Stock upon conversion of New
Junior Notes or exercise of New Warrants. The shares of Common Stock issuable
upon the conversion of the New Junior Notes and the exercise of the New Warrants
(the "Underlying Shares") are duly authorized and will be as of any Closing Date
reserved for issuance and, upon such conversion or exercise, as applicable, in
accordance with the terms of the New Junior Notes or New Warrants, such
Underlying Shares will be validly issued, fully paid and non-assessable, free
and clear of any and all liens, claims and encumbrances, and the holders of such
Underlying Shares shall be entitled to all rights and preferences accorded to a
holder of shares of Common Stock. The outstanding shares of Common Stock are
currently included for quotation on the Over the Counter Bulletin Board (the
"OTC Bulletin Board").
(e) No Conflicts. The execution, delivery and
performance of this Agreement, the Fifth Amendment and each of the other
documents contemplated hereby and thereby (collectively, the "Exchange
Documents") by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) result in a
violation of the charter or by-laws of the Company or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent,
patent license or instrument to which the Company is a party, or result in a
violation of any federal, state, local or foreign law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the Company is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect); provided
that, for purposes of such representation as to federal, state, local or foreign
law, rule or regulation, no representation is made herein with respect to any of
the same applicable solely to the Holders and not to the Company.
Notwithstanding any other provision herein, the exchange of Current Securities
as contemplated by this Agreement, will not give rise to any liability to any
holder under Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or to any person or entity controlling, controlled by or
under common control with such holder. The business of the Company is not being
conducted in violation of any law, ordinance or regulation of any governmental
entity, except for violations which either singly or in the aggregate do not and
will not have a Material Adverse Effect. The Company is not required under
federal, state, local or foreign law, rule or regulation to obtain any consent,
authorization or order of, or to make any filing or registration with, any court
or governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement or issue the New Securities in accordance with
the terms hereof and issue the Underlying Shares upon conversion or exercise
thereof (other than ordinary course filings under federal or state securities
laws that have been or will be made), provided that, for purposes of the
representation made in this sentence, the
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Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Holders herein.
(f) SEC Documents; Financial Statements. The Company
has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the Securities and Exchange Commission (the "Commission")
pursuant to the reporting requirements of the Exchange Act, including material
filed pursuant to Section 13(a) or 15(d), in addition to one or more
registration statements and amendments thereto heretofore filed by the Company
with the Commission (all of the foregoing including filings incorporated by
reference therein being referred to herein as the "SEC Documents"). The Company
has delivered or made available to the Holders true and complete copies of all
SEC Documents (including, without limitation, proxy information and solicitation
materials and registration statements) filed with the Commission since January
1, 2002. Without limiting any other representation or warranty herein, the
Company has not provided to any Holder any information which as of the Closing,
according to applicable law, rule or regulation, should be disclosed publicly by
the Company but will not have been so disclosed. As of their respective dates,
the SEC Documents (as amended by any amendments filed prior to the date of this
Agreement or any Closing Date and provided to each Holder) complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder and other federal, state
and local laws, rules and regulations applicable to such SEC Documents, and none
of the SEC Documents, at the time they were filed with the Commission, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(g) Market. The Common Stock is currently included
for quotation on the OTC Bulletin Board.
(h) No Material Adverse Change. Since August 14,
2002, the date through which the most recent quarterly report of the Company on
Form 10-QSB was filed with the Commission, a copy of which is included in the
SEC Documents, no event which had or is likely to have a Material Adverse Effect
has occurred or exists with respect to the Company, except as otherwise
disclosed or reflected in press releases or other SEC Documents prepared through
or as of a date subsequent to August 14, 2002.
(i) No Undisclosed Liabilities. The Company does not
have any liabilities or obligations not disclosed in the SEC Documents, other
than those liabilities incurred
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in the ordinary course of its business since December 31, 2001 or liabilities or
obligations, individually or in the aggregate, which do not or would not have a
Material Adverse Effect on the Company, taken as a whole.
(j) No Undisclosed Events or Circumstances. No event
or circumstance has occurred or exists with respect to the Company or its
business, properties, prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed.
(k) No General Solicitation. Neither the Company nor,
to the Company's knowledge, any of its affiliates or any person acting on its or
their behalf has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D promulgated under the Securities
Act of 1933, as amended (the "Securities Act")) in connection with the
transactions contemplated hereby.
(l) No Integrated Offering. Neither the Company nor,
to the Company's knowledge, any of its Affiliates (as defined pursuant to the
Securities Act), or any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, or the Underlying Shares under circumstances that would
require registration of the New Securities, and the issuance of the New
Securities hereunder, and of the Underlying Shares upon conversion or exercise
thereof, as applicable, is exempt from the registration requirements of the
Securities Act.
(m) Intellectual Property. The Company owns or has
licenses to use certain patents, copyrights and trademarks ("intellectual
property") associated with its business. The Company has all intellectual
property rights which are needed to conduct its business as it is now being
conducted or as proposed to be conducted as disclosed in the SEC Documents. The
Company has no reason to believe that the intellectual property rights owned by
the Company are invalid or unenforceable or that the use of such intellectual
property by the Company infringes upon or conflicts with any right of any third
party, and the Company has not received notice of any such infringement or
conflict. The Company has no knowledge of any infringement of the Company's
intellectual property by any third party.
(n) No Litigation. Except as set forth in the SEC
Documents delivered to the Holders prior to the date of this Agreement
("Pre-Agreement SEC Documents") no litigation or claim (including those for
unpaid taxes) against the Company is pending or, to the Company's knowledge,
threatened, and no other event has occurred, which if determined adversely to
the Company would have a Material Adverse Effect on the Company, or would
materially adversely effect the transactions contemplated hereby. The legal
proceedings described in the Pre-Agreement SEC Documents will not have an effect
on the transactions contemplated hereby, and will not have a Material Adverse
Effect on the Company, taken as a whole.
(o) Brokers. The Company has taken no action which
would give rise to any claim by any person for brokerage commissions, finder's
fees or similar payments by any Holder relating to this Agreement or the
transactions contemplated hereby.
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(p) Schedules I and II. The amounts set forth on
Schedules I and II hereto are true and correct as of September 30, 2002.
Section 3.2 Representations and Warranties of the Holders. Each of
the Holders, severally and not jointly, hereby makes the following
representations and warranties to the Company as of the date hereof and on the
Closing Date:
(a) Authorization; Enforcement. (i) Such Holder has
the requisite power and authority to enter into and perform this Agreement and
to exchange such holder's Current Securities for the New Securities being
offered hereunder, (ii) the execution and delivery of this Agreement by such
Holder and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate or partnership
action, as required, and (iii) this Agreement constitutes the valid and binding
obligation of such Holder enforceable against such Holder in accordance its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or other laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
(b) No Conflicts. The execution, delivery and
performance of this Agreement and any other Exchange Document to which it is a
party, and the consummation by such Holder of the transactions contemplated
hereby and thereby do not and will not (i) result in a violation of such
Holder's organizational documents, if any, or (ii) conflict with any agreement,
indenture, or instrument to which such Holder is a party, or (iii) result in a
violation of any law, rule, or regulation or any order, judgment or decree of
any court or governmental agency applicable to such Holder. Such Holder is not
required to obtain any consent or authorization of any governmental agency in
order for it to perform its obligations under this Agreement and any other
Exchange Document to which it is a party.
(c) Investment Representation. Such Holder is
acquiring the New Securities for its own account and not with a view to
distribution in violation of any securities laws. Such Holder has no present
intention to sell the New Securities and such Holder has no present arrangement
(whether or not legally binding) to sell the New Securities to or through any
person or entity; provided, however, that by the representations herein, such
Holder does not agree to hold the New Securities for any minimum or other
specific term and reserves the right to dispose of the New Securities at any
time in accordance with federal and state securities laws applicable to such
disposition.
(d) Accredited Investor. Such Holder is an
"accredited investor" as defined in Rule 501 promulgated under the Securities
Act and, in the case of each Holder of Junior Notes, has attested to such status
by executing and delivering to the Company an Investor Questionnaire in the form
attached hereto as Exhibit F ("Investor Questionnaire"). The Holder has such
knowledge and experience in financial and business matters in general and
investments in particular, so that such Holder is able to evaluate the merits
and risks of an exchange of its Current Securities for New Securities and to
protect its own interests in connection with such exchange. In addition (but
without limiting the effect of the Company's representations and warranties
contained herein), such Holder has had the opportunity to ask questions of and
has
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received such information as it considers necessary or appropriate for deciding
whether to exchange its Current Securities for New Securities pursuant hereto.
(e) Rule 144. Such Holder understands that the New
Securities will not be registered under the Securities Act, that they are not
expected to be registered, and that the New Junior Notes and New Warrants issued
hereunder may be traded as set forth in the Amended and Restated Offering
Memorandum, dated October 30, 2002, in connection with the transactions
contemplated hereby.
(f) Brokers. Such Holder has taken no action which
would give rise to any claim by any person for brokerage commissions, finder's
fees or similar payments by the Company relating to this Agreement or the
transactions contemplated hereby.
(g) Reliance by the Company. Such Holder understands
that the New Securities are being offered and exchanged for the Current
Securities in reliance on an exemption from the registration requirements of
federal and state securities laws and that the Company is relying upon the truth
and accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Holder set forth herein in order to determine the
applicability of such exemptions and the suitability of such Holder to acquire
New Securities.
ARTICLE IV
COVENANTS
Section 4.1 Registration and Listing. Until such time as no New
Securities or Underlying Shares are outstanding the Company will cause its
Common Stock to continue to be registered under Section 12(g) of the Exchange
Act, will comply in all respects, with its reporting and filing obligations
under the Exchange Act, and will not take any action or file any document
(whether or not permitted by the Exchange Act or the rules thereunder) to
terminate or suspend such reporting and filing obligations. The Company shall
take such further action as any holder of Underlying Shares may reasonably
request, and to the extent required from time to time to enable such holder to
sell such shares without registration under the Securities Act within the
limitations of the exemptions provided by (i) Rule 144 promulgated under the
Securities Act, as such rule may be amended from time to time, and (ii) any
similar rule or regulation hereinafter adopted by the Commission. Upon the
request of any such holder, the Company will deliver to such holder a written
statement as to whether it has complied with any informational requirements.
Until such time as no New Securities are outstanding the Company shall use
commercially reasonable efforts to continue the listing or trading of the Common
Stock on the OTC Bulletin Board, the Nasdaq or a principal exchange and comply
in all respects with the Company's reporting, filing and other obligations
arising from the OTC Bulletin Board or the by-laws or rules of Nasdaq or any
exchange or market where the Common Stock is then traded.
Section 4.2 Certificates on Conversion. Without limiting any
provision contained in the New Warrants or the New Junior Notes, upon any
conversion or exercise of the New Securities, as applicable, the Company shall
issue and deliver to such Holder (or the then holder) within three (3) days
after the Conversion Date (each as defined in the New Securities) a new
certificate or certificates for the principal amount of New Securities which
such Holder (or
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holder) is not converting or exercising, as applicable, but which is evidenced
in part by the certificate(s) submitted to the Company in connection with such
conversion or exercise, as applicable (with the number of and denomination of
such new certificate(s) designated by such Holder or holder).
Section 4.3 Replacement Certificates. Without limiting any provision
contained in the New Warrants, the New Junior Notes or the New Secured Notes,
the certificate(s) representing the New Securities held by any Holder (or then
holder) may be exchanged by such Holder (or such holder) at any time and from
time to time for certificates with different denominations representing an equal
aggregate principal amount of New Securities, as reasonably requested by such
Holder (or such holder) upon surrendering the same. No service charge will be
made for such registration, transfer or exchange.
Section 4.4 Securities Compliance. The Company shall notify the
Commission and the OTC Bulletin Board, in accordance with their requirements, of
the transactions contemplated by this Agreement, and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the New Securities
hereunder and the Common Stock issuable upon conversion or exercise, as
applicable, thereof.
Section 4.5 Notices. The Company agrees to provide all holders of
New Securities with copies of all notices and information, including without
limitation notices and proxy statements in connection with any meetings, that
are provided to the holders of shares of Common Stock, contemporaneously with
the delivery of such notices or information to such holders of Common Stock.
Section 4.6 Reservation of Stock Issuable Upon Conversion. Without
limiting any provision contained in the New Warrants or the New Junior Notes,
the Company shall at all times reserve and keep available out of its authorized
but unissued Common Stock, solely for the purpose of affecting the conversion or
exercise, as applicable, of the New Securities, such number of shares of Common
Stock as shall from time to time be sufficient to effect the conversion or
exercise of all outstanding New Securities, as applicable, and if at any time
the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion or exercise, as applicable, of all the then
outstanding New Securities, the Company will take such corporate action as may,
in the opinion of its counsel, be necessary to increase its authorized but
unissued Common Stock to such number of shares as shall be sufficient for such
purpose, including without limitation engaging in best efforts to obtain the
requisite shareholder approval.
Section 4.7 Pre-Closing Capitalization. Except as consented to by
the Required Holders (as hereinafter defined) from and after the date of this
Agreement and until the Closing:
(a) No change shall be made or proposed to the
Articles of Incorporation or bylaws of the Company, nor shall the Company merge
into or with any other person, or sell or otherwise dispose of all or
substantially all of its assets or properties.
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(b) The Company shall not: (i) issue, grant, sell or
encumber any shares of its capital stock, (ii) issue, grant, sell or encumber
any security, option, warrant, put, call, subscription or other right of any
kind, fixed or contingent, that directly or indirectly calls for the
acquisition, issuance, sale, pledge or other disposition of any shares of
capital stock or other equity interests of the Company, (iii) enter into any
agreement, commitment or understanding calling for any transaction referred to
in clause (i) or (ii) of this Paragraph (b), or (iv) make any other changes in
its equity capital structure except, in all such cases under this Paragraph (b),
for this Agreement and the consummation of the transactions hereunder, or
pursuant to obligations which are outstanding prior to the execution and
delivery of this Agreement.
(c) The Company shall not split, combine or
reclassify any of its capital stock, or declare, set aside or pay any dividend
or other distribution (whether in cash, stock, securities, indebtedness, rights
or property or any combination thereof) in respect of any shares of its capital
stock or other equity interests, or redeem or otherwise acquire any shares of
the capital stock or other equity interests.
Section 4.8 Opinion of Counsel Regarding Resale of Underlying
Shares. If requested by any Holder upon a cashless exercise of a New Warrant,
the Company will use its best efforts to obtain an opinion from its counsel that
pursuant to Rule 144(k) of the Securities Act, the sale of the Underlying Shares
by such Holder is exempt from the registration requirements of the Securities
Act, provided, that such Holder is not and for the three months prior to the
date of resale or transfer has not been an affiliate of the Company (as such
term is defined in Rule 144).
ARTICLE V
CONDITIONS
Section 5.1 Conditions Precedent to the Obligations of the Company.
The obligations of the Company hereunder are subject to the satisfaction, at or
before the Closing Date, of each of the conditions set forth below. These
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion.
(a) Accuracy of the Holder's Representations and
Warranties. The representations and warranties of each Holder shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a particular date).
(b) Performance by the Holders. Each Holder shall
have performed all agreements and satisfied all conditions required to be
performed or satisfied by such Holder in all material respects at or prior to
any Closing Date.
(c) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
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(d) Fifth Amendment to Loan Agreement. The Lenders
(as defined in the Fifth Amendment) shall have executed and delivered the Fifth
Amendment to the Company.
(e) Minimum Exchange Offer Acceptance. Holders of no
less than 100% of the outstanding Current Securities shall have executed this
Agreement and the Company shall have received all of the Current Securities.
(f) Consent of Hansa Finance Limited Liability
Company. As required by the Revolving Credit Loan Agreement (the "Senior Secured
Revolving Loan") between the Company and Hansa Finance Limited Liability
Company, a Delaware limited liability company (the "Senior Lender"), the Company
shall have obtained the consent of the Senior Lender in relation to the
transactions contemplated hereby without material penalty or condition.
(g) Investor Questionnaire. Each Holder of Current
Junior Notes shall have executed and delivered to the Company an Investor
Questionnaire.
(h) Satisfaction regarding Tax Withholding. Hanseatic
Americas LDC shall have either (i) represented to the satisfaction of the
Company that it does not own, actually and constructively, ten percent or more
of the total combined voting power of all classes of stock of the Company
entitled to vote (or that no United States federal withholding tax is payable by
the Company in respect of Hanseatic Americas LDC's exchange of its current
Secured Note hereunder because an applicable income tax treaty eliminates the
tax or because any interest income of Hanseatic Americas LDC is effectively
connected with trade or business conducted by Hanseatic Americas LDC in the
United States) or (ii) paid to the Company in cash the amount of such
withholding tax payable in respect of interest on the Current Secured Note
issued to Hanseatic Americas LDC of its Current Secured Note.
(i) Waiver. The holders of (i) the Company's
outstanding shares of Series D Preferred Stock, $1.00 par value per share, (ii)
those certain Warrants issued May 2, 2000 exercisable for an aggregate of
571,428 shares of Common Stock, and (iii) those certain Warrants issued as of
August 7, 2000 exercisable for an aggregate of 942,858 shares of Common Stock
shall have executed and delivered a waiver (the "Waiver") to the Company,
substantially in the form attached hereto as Exhibit G.
(j) Extension of Mandatory Redemption Date for
Preferred Stock. The holders of the Company's outstanding shares of Series B
Preferred Stock, $1.00 par value per share, Series C Preferred Stock, $1.00 par
value per share, and Series D Preferred Stock, $1.00 par value per share, shall
have executed and delivered to the Company a letter agreement (the "Mandatory
Redemption Date Extension") extending the mandatory redemption date of the
preferred stock, substantially in the form attached hereto as Exhibit H.
Section 5.2 Conditions Precedent to the Obligations of the Holders.
The obligations of the Holders hereunder are subject to the satisfaction, at or
before the Closing Date, of each of the conditions set forth below. These
conditions are for the Holders' sole benefit and may be waived by the Required
Holders at any time in their sole discretion.
11
(a) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the Company set forth in
Article III shall be true and correct in all material respects as of the date
when made and as of any Closing Date as though made at that time (except for
representations and warranties that speak as of a particular date).
(b) Performance by the Company. The Company shall
have performed in all material respects all agreements and satisfied all
conditions required to be performed or satisfied by the Company at or prior to
any Closing Date and the Company shall have delivered to the Holders a
certificate executed by the Company's President and the Company's Chief
Executive Officer to such effect.
(c) Public Market. From the date hereof to the
Closing Date, trading in the Company's Common Stock shall not have been
suspended by the Commission, and trading in securities generally as reported by
the OTC Bulletin Board, shall not have been suspended or limited, and the Common
Stock shall not have been delisted from the OTC Bulletin Board.
(d) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority or competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement or any other Exchange Document.
(e) Secretary's Certificate. The Company shall have
delivered to the Holders a certificate, executed by the Secretary of the Company
on behalf of the Company, certifying as to satisfaction of closing conditions,
incumbency of signing officers, charter, by-laws, good standing and authorizing
resolutions of the Company.
(f) Opinion of Counsel. At Closing, the Holders shall
have received an opinion of counsel substantially in the form attached hereto as
Exhibit I.
(g) Fifth Amendment to Loan Agreement. The Company
and the Lenders shall have executed and delivered the Fifth Amendment.
(h) Consents. All consents, acknowledgements,
approvals, permits and orders with respect to the transactions contemplated
hereby shall have been obtained, including, without limitation, the consent of
the Senior Lender under its subordination arrangements with the Holders of
Current Secured Notes.
(i) Other Certificates. The Holders shall have
received such additional certificates, instruments and other documents in form
and substance reasonably satisfactory to them as they shall have reasonably
requested in connection with the transactions hereunder.
(j) Waiver. The holders of (i) the Company's
outstanding shares of Series D Preferred Stock, $1.00 par value per share, (ii)
those certain Warrants issued May 2, 2000 exercisable for an aggregate of
571,428 shares of Common Stock, and (iii) those certain
12
Warrants issued as of August 7, 2000 exercisable for an aggregate of 942,858
shares of Common Stock shall have executed and delivered the Waiver to the
Company.
(k) Extension of Mandatory Redemption Date for
Preferred Stock. The holders of the Company's outstanding shares of Series B
Preferred Stock, $1.00 par value per share, Series C Preferred Stock, $1.00 par
value per share, and Series D Preferred Stock, $1.00 par value per share, shall
have executed and delivered the Mandatory Redemption Date Extension to the
Company.
ARTICLE VI
LEGEND AND STOCK
Each of the New Securities (other than the New Secured Notes) and the
Underlying Shares, if issued, shall be stamped or otherwise imprinted with a
legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (I)
PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS
CURRENT WITH RESPECT TO THESE SECURITIES OR (II)
PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT, BUT ONLY UPON A HOLDER
HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF
COUNSEL OF THE ISSUER, OR OTHER COUNSEL, REASONABLY
ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED
DISPOSITION IS CONSISTENT WITH ALL APPLICABLE
PROVISIONS OF THE SECURITIES ACT.
ARTICLE VII
TERMINATION OF PRIOR AGREEMENT
Upon the Closing of the transactions contemplated hereby, the
Subordinated Convertible Note Purchase Agreement, dated February 23, 1998,
between the Company and the Investors party thereto, as amended prior to the
Closing Date, shall terminate insofar as any Holder has rights thereunder and be
of no force and effect.
ARTICLE VIII
TERMINATION
13
Section 8.1 Termination by Written Consent. This Agreement may be
terminated at any time prior to the Closing Date by written consent of the
Company and each of the following (collectively, the "Required Holders"): (i)
the holders of Current Junior Notes representing in excess of a majority of the
outstanding principal amount thereof; plus (ii) the holders of Current Secured
Notes representing in excess of a majority of the outstanding principal amount
thereof.
Section 8.2 Other Termination. This Agreement shall terminate upon
written notice at the Company's option, or upon written notice at the option of
the Required Holders, if the Closing Date shall not have occurred prior to
December 31, 2002.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Stamp Taxes; Agent Fees. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the New
Securities pursuant hereto and the shares of Common Stock issued upon conversion
or exercise, as applicable, thereof.
Section 9.2 Specific Enforcement; Consent to Jurisdiction.
(a) The Company and the Holders acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which any of
them may be entitled by law or equity.
(b) The Company and each of the Holders (i) hereby
irrevocably submits to the non-exclusive jurisdiction of the United States
District Court, the New York State courts and other courts of the United States
sitting in New York County, New York for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement and (ii) hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company and each of the Holders
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this paragraph
shall affect or limit any right to serve process in any other manner permitted
by law.
Section 9.3 Entire Agreement; Amendment. This Agreement and the
Exchange Documents together with the agreements and documents executed in
connection herewith and therewith, contains the entire understanding of the
parties with respect to the matters covered hereby and thereby and, except as
specifically set forth herein or therein, neither the Company nor any Holder
makes any representation, warranty, covenant or undertaking with respect to such
matters. This Agreement may be amended by the Company and the Required Holders.
The
14
Company may in writing waive any provision hereof accruing to its benefit and
the Required Holders may waive any provision hereof accruing to the benefit of
the Holders.
Section 9.4 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective upon
actual receipt of such mailing. The addresses for such communications shall be:
to the Company: SystemOne Technologies Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Chief Executive Officer
with copies to: Xxxxxxxxx Traurig, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxx, Esq.
to the Holders: To each Holder at the address(es) set
forth on Schedule I or II of this Agreement.
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
Section 9.5 Indemnity. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees but
excluding consequential damages) incurred as a result of such parties' breach of
any representation, warranty, covenant or agreement in this Agreement.
Section 9.6 Waivers. No waiver by any party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
Section 9.7 Headings. The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 9.8 Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The Company may not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Required Holders (which consent may be withheld for any reason in
their sole discretion), except that the Company may assign this Agreement in
connection with a merger, consolidation, business combination or the sale of all
or substantially all of its assets provided that the Company is not released
from any of its obligations hereunder, such successor in interest or assignee
assumes all obligations of the Company hereunder, and appropriate adjustment of
the provisions contained in this Agreement is made to place the Holders in
substantially the same position as they would have been but for
15
such assignment. Any Holder may assign this Agreement (in whole or in part) or
any rights or obligations hereunder without the consent of the Company in
connection with any sale or transfer of all or any portion of the New Securities
(or Underlying Shares) held by such Holder.
Section 9.9 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 9.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to such state's principles of conflict of laws.
Section 9.11 Survival. The representations and warranties and the
agreements and covenants of the Company and each Holder contained herein shall
survive the Closing.
Section 9.12 Execution. This Agreement may be executed in
counterparts, each of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
Section 9.13 Publicity. The Company agrees that it will not disclose,
and will not include in any public announcement, the name of any Holder without
its consent, unless and until such disclosure is required by law or applicable
regulation, and then only to the extent of such requirement.
Section 9.14 Severability. The parties acknowledge and agree that
all representations, warranties, covenants and agreements of the Holders
hereunder are several and not joint, that no Holder shall have any
responsibility or liability for the representations, warrants, agreements, acts
or omissions of any other Holder, and that any rights granted to "Holders"
hereunder shall be enforceable by each Holder hereunder.
Section 9.15 Like Treatment of Holders. Neither the Company nor any
of its affiliates shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, payment for the redemption or
exchange of New Junior Notes, or otherwise, to any Junior Note Holders, for or
as an inducement to, or in connection with the solicitation of, any consent,
waiver or amendment of any terms or provisions of the New Junior Notes or this
Agreement, unless such consideration is required to be paid to all Junior Note
Holders bound by such consent, waiver or amendment whether or not such holders
so consent, waive or agree to amend and whether or not such holders tender their
New Junior Notes for redemption or exchange. The Company shall not, directly or
indirectly, redeem any New Junior Notes unless such offer of redemption is made
pro rata to all holders of New Junior Notes on identical terms.
Section 9.16 Consent. Each Holder of Current Junior Notes hereby
consents to and approves the transactions contemplated by this Agreement to the
extent such consent or approval is required under the terms of the Current
Junior Notes and the documents related thereto; each Holder of Current Secured
Notes hereby consents to and approves the transactions contemplated by this
Agreement to the extent such consent or approval is required under the terms of
the
16
Current Secured Notes, the Company's Articles of Incorporation, the documents
related thereto or otherwise.
[The remainder of this page has been intentionally left blank.]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
The Company:
SYSTEMONE TECHNOLOGIES INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
18
JUNIOR NOTE HOLDERS
HOLDERS:
GULFBEND & CO.
c/o Emerging Growth Advisers, Inc.
World Trade Center Baltimore
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx Xxxxxx
By: /s/Xxxxxxx X. Muggrei
--------------------------------
Name: Xxxxxxx X. Muggrei
Title: President and Chief Executive Officer
CREDIT SUISSE FIRST BOSTON CORPORATION
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
SB MGT. CORP. (F/K/A NEW RIVER CAPITAL PARTNERS)
0000 X.X. 00xx Xxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
19
TRITON CAPITAL INVESTMENTS, LTD.
c/o Pacific Assets Management
0 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxx
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Partner
PITT & COMPANY
c/o Emerging Growth Advisers, Inc.
World Trade Center Baltimore
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx Xxxxxx
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President, Emerging Growth Advisors, Inc.
/s/ Xxxxxxx Xxxxxx, Jr.
-----------------------------------
XXXXXXX XXXXXX, JR.
c/o Emerging Growth Advisers, Inc.
World Trade Center Baltimore
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx Xxxxxx
/s/ Xxxx Xxxxx Xxxxxx
-----------------------------------
XXXX XXXXX XXXXXX
c/o Emerging Growth Advisers, Inc.
World Trade Center Baltimore
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx Xxxxxx
20
/s/ Xxxxxxx Xxxxxx III
-----------------------------------
XXXXXXX XXXXXX III
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
/s/ Xxx X. Xxxxxx
-----------------------------------
XXX X. XXXXXX
00 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
XXXXXXX X. XXXXXX
000 Xxxxx Xxx Xxxx
Xxxxxxxxxx, XX 00000
/s/ Xxxxxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx
------------------------------------------------
XXXXXX X. & XXXXXXXXX X. XXXXXXXX
c/o Emerging Growth Advisers, Inc.
World Trade Center Baltimore
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx Xxxxxx
DEUTSCHE BANK SECURITIES
Custodian FBO Xxxxx X. Xxxxxx' XXX
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
00
XXXXXXXX BANK SECURITIES
Custodian FBO Xxxxxxx X. Xxxxxxx'x XXX
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Trustee
/s/ R. Xxxx Xxxxx
-----------------------------------
R. XXXX XXXXX
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
/s/ Xxxxxxxxx X. Xxxxx
-----------------------------------
XXXXXXXXX X. XXXXX
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
/s/ Xxxxx X. Xxxx
-----------------------------------
XXXXX X. XXXX
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxx Xxxxxx
c/x Xxxxxxxx Group, LLC
00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
By: /s/ Xxx Xxxxxx
--------------------------------
Name: Xxx Xxxxxx
22
X. X. XXXX ASSOCIATES, L.P.
c/o Hull Management
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: X. Xxxxxxxx Xxxx
By: /s/ X. Xxxxxxxx Hull
--------------------------------
Name: X. Xxxxxxxx Xxxx
Title: Gen Partner
XXXX & CO.
c/o XX Xxxxxx Xxxxx Bank,
formerly known as Xxxxxx Guarantee Trust Company of New York,
as Investment Manager and Agent for the Xxxxxx X. Xxxxx Foundation
(Multi-Market Account)
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
XXXXXXX & CO.
c/o XX Xxxxxx Chase Bank,
formerly known as Xxxxxx Guarantee Trust Company of New York,
as Trustee of the Commingled Pension Trust Fund (Multi-Market Special
Investment Fund II) of XX Xxxxxx Chase Bank
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
23
XXXXXXX & CO.
c/o XX Xxxxxx Xxxxx Bank,
formerly known as Xxxxxx Guarantee Trust Company of New York,
as Trustee of the Multi-Market Special Investment Trust Fund
of XX Xxxxxx Xxxxx Bank
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
Xxxxxxxxxxx Convertible Securities Fund
c/o Citibank, N.A.
000 Xxxx 00xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
24
SECURED NOTE HOLDERS
HOLDERS:
ENVIRONMENTAL OPPORTUNITIES FUND II, L.P.
ENVIRONMENTAL OPPORTUNITIES FUND II (INSTITUTIONAL), L.P.
By: Fund II Mgt. Co., LLC
General Partner
By: /s/ Xxxxx XxXxxxx
--------------------------------
Name: Xxxxx XxXxxxx
Title: Manager
HANSEATIC AMERICAS LDC
By: Hanseatic Corporation
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
25
EXHIBITS AND SCHEDULES
--------------------------------------------------------------------------------
Schedule I List of Junior Note Holders
--------------------------------------------------------------------------------
Schedule II List of Secured Note Holders
--------------------------------------------------------------------------------
Schedule III Capitalization Table
--------------------------------------------------------------------------------
Exhibit A Form of New Junior Partial Cash Pay Note
--------------------------------------------------------------------------------
Exhibit B Form of New Junior PIK Pay Note
--------------------------------------------------------------------------------
Exhibit C Form of New Warrant
--------------------------------------------------------------------------------
Exhibit D Form of New Secured Note
--------------------------------------------------------------------------------
Exhibit E Fifth Amendment
--------------------------------------------------------------------------------
Exhibit F Form of Investor Questionnaire
--------------------------------------------------------------------------------
Exhibit G Waiver
--------------------------------------------------------------------------------
Exhibit H Mandatory Redemption Date Extension
--------------------------------------------------------------------------------
Exhibit I Opinion of Company Counsel
--------------------------------------------------------------------------------
26
SCHEDULE I
PRINCIPAL AMOUNT AND
ACCRUED INTEREST OF
CURRENT JUNIOR NOTES NUMBER OF NEW
NAME OF JUNIOR NOTE HOLDER (AS OF SEPTEMBER 30, 2002) WARRANTS
---------------------------------------------------------------------------------------------------------------
Gulfbend & Co. 2,967,581 102,250
---------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corporation 870,684 30,000
---------------------------------------------------------------------------------------------------------------
New River Capital Partners 1,088,355 37,500
---------------------------------------------------------------------------------------------------------------
Triton Capital Investments, LTD. 580,456 20,000
---------------------------------------------------------------------------------------------------------------
Pitt & Company 253,950 8,750
---------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxx, Jr. 72,557 2,500
---------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx Xxxxxx 65,301 2,250
---------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxx III 21,767 750
---------------------------------------------------------------------------------------------------------------
Xxx X. Xxxxxx 10,883.50 375
---------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx 10,883.50 375
---------------------------------------------------------------------------------------------------------------
Xxxxxx X. & Xxxxxxxxx X. Xxxxxxxx 14,511 500
---------------------------------------------------------------------------------------------------------------
Deutsche Bank Securities custodian Xxxxx X. Xxxxxx
XXX 58,046 2,000
---------------------------------------------------------------------------------------------------------------
Deutsche Bank Securities custodian Xxxxxxx X.
Xxxxxxx, XXX 58,046 2,000
---------------------------------------------------------------------------------------------------------------
R. Xxxx Xxxxx 29,023 1,000
---------------------------------------------------------------------------------------------------------------
Xxxxxxxxx X. Xxxxx 21,767 750
---------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxx 43,534 1,500
---------------------------------------------------------------------------------------------------------------
WBM III, LLC 72,557 2,500
---------------------------------------------------------------------------------------------------------------
X.X. Xxxx Associates, L.P. 1,015,798 35,000
---------------------------------------------------------------------------------------------------------------
Xxxx & Co. 1,306,026 45,000
---------------------------------------------------------------------------------------------------------------
Xxxxxxx & Co. 7,400,815 255,000
---------------------------------------------------------------------------------------------------------------
Hare & Co. 5,804,561 200,000
---------------------------------------------------------------------------------------------------------------
27
SCHEDULE II
PRINCIPAL AMOUNT AND
ACCRUED INTEREST OF
CURRENT SECURED NOTES
NAME OF SECURED NOTE HOLDER (AS OF SEPTEMBER 30, 2002)
------------------------------------------------------------------------------------
Environmental Opportunities Fund II, L.P. $ 462,047
------------------------------------------------------------------------------------
Environmental Opportunities Fund II
(Institutional), L.P. $1,697,052
------------------------------------------------------------------------------------
Hanseatic Americas LDC $2,159,099
------------------------------------------------------------------------------------
28
SCHEDULE III
CAPITALIZATION PRIOR TO THE EXCHANGE
ISSUED & OUTSTANDING
INCLUDING ACCRUED
INTEREST AND DIVIDENDS
SECURITY AUTHORIZED (AS OF SEPTEMBER 30, 2002)
------------------------------------------------------------------------------------------------
Common Stock 25,000,000 shares 4,742,923 shares
------------------------------------------------------------------------------------------------
Preferred Stock 1,500,000 shares 178,710 shares
------------------------------------------------------------------------------------------------
Series B Preferred 150,000 shares 66,356 shares
------------------------------------------------------------------------------------------------
Series C Preferred 150,000 shares 88,043 shares
------------------------------------------------------------------------------------------------
Series D Preferred 150,000 shares 24,311 shares
------------------------------------------------------------------------------------------------
Options 603,966
------------------------------------------------------------------------------------------------
Warrants 2,679,901
------------------------------------------------------------------------------------------------
Current Junior Notes $21,767,102
------------------------------------------------------------------------------------------------
Current Secured Notes $ 4,318,198
------------------------------------------------------------------------------------------------
CAPITALIZATION FOLLOWING THE EXCHANGE
SECURITY AUTHORIZED ISSUED & OUTSTANDING
------------------------------------------------------------------------------------------------
Common Stock 25,000,000 shares 4,742,923 shares
------------------------------------------------------------------------------------------------
Preferred Stock 1,500,000 shares 178,710 shares
------------------------------------------------------------------------------------------------
Series B Preferred 150,000 shares 66,356 shares
------------------------------------------------------------------------------------------------
Series C Preferred 150,000 shares 88,043 shares
------------------------------------------------------------------------------------------------
Series D Preferred 150,000 shares 24,311 shares
------------------------------------------------------------------------------------------------
Options 603,966
------------------------------------------------------------------------------------------------
Warrants 3,679,901
------------------------------------------------------------------------------------------------
Current Junior Notes $21,767,102
------------------------------------------------------------------------------------------------
Current Secured Notes $ 4,318,198
------------------------------------------------------------------------------------------------
29
