AQUAGENIX, INC.
Amendment No. 5
12.50% Senior Secured Notes Due October 31, 2003
AMENDMENT NO. 5 (this "Amendment"), dated as of March 31, 1999, by and among
AQUAGENIX, INC. (the "Company"), a Delaware corporation and THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES (the "Note holder").
1. PRELIMINARY STATEMENT
1.1 The Company entered into an Amended and Restated Senior Secured Note and
Warrant Purchase Agreement (the "Original Note Purchase Agreement," as in
effect immediately prior to the date hereof, the "Existing Note Purchase
Agreement" and as amended hereby, the "Amended Note Purchase Agreement"),
dated as of December 15, 1995, with the Noteholder, pursuant to which the
Company issued and sold to the Noteholder $5,000,000 in principal amount of
the Company's 12.50% Senior Secured Notes due October 31, 2003 (as in
effect immediately prior to the date hereof, the "Original Notes" and as
amended hereby, the "Amended Notes").
1.2 The Company has requested further amendments to the Existing Note Purchase
Agreement, the Warrant Agreement and the Warrant Certificates.
1.3 Capitalized terms used herein and not defined herein have the meanings
specified by the Existing Note Purchase Agreement.
2. AMENDMENTS
2.1 Amendments to the Existing Note Purchase Agreement.
The Existing Note Purchase Agreement is hereby amended as follows:
(a) Interest Expense Coverage Ratio (Section 7.4 of the Note
Purchase Agreement)
The requirement in Section 7.4 of the Existing Note Purchase
Agreement that the Company maintain a minimum Interest Expense Coverage
Ratio is hereby suspended during the period April 1, 1999 through
March 31, 2000.
(b) Minimum Consolidated Net Worth (Section 7.5 of the Note
Purchase Agreement)
Section 7.5 of the Existing Note Purchase Agreement is hereby
amended to exclude a Consolidated Net Worth requirement for the period
from and including September 30, 1998 through March 31, 2000.
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(c) Capital Expenditure (Section 7.6 of the Note Purchase
Agreement)
Section 7.6 of the Existing Note Purchase Agreement hereby
amended by substituting "Five Hundred Thousand Dollars ($500,000)" in
place of "One Million Two Hundred Fifty Thousand Dollars" in each place
where the latter language appears.
(d) Debt Restructure (Section 7.7 of the Note Purchase
Agreement). Section 7.7 of the Existing Note Purchase Agreement is
hereby amended to read in its entirety as follows.
7.7 Debt Restrictions.
The Company will not, and will not permit any Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or
otherwise be or become liable with respect to any Debt, except:
(a) the Notes;
(b) Debt owing to Union Planter Bank on April 1, 1999, and any
refinancing of such Debt in an aggregate amount not exceeding One
Million Five Hundred Thousand Dollars ($1,500,000); and
(c) Other Debt outstanding on April 1, 1999 not exceeding Six
Hundred Twenty Three Thousand Dollars ($623,000) in the aggregate.
2.2 Waiver of Defaults; Amendments to Payment Requirements.
The Noteholder hereby waives all existing payment defaults and all
existing covenant defaults occasioned by failure to comply with Section 7.4 and
7.5 of the Existing Note Purchase Agreement. All interest and consent fees
presently accrued and unpaid shall be due and payable in full March 31, 2000.
The Company hereby reaffirms its obligation to pay interest on the
Notes on the final day of each month. The Company also agrees to pay a consent
fee (the "Consent Fee") of $5,000 on the final day of each month beginning April
30, 1999 through and including March 31, 2000. Interest and the Consent Fee
shall be paid by wire transfer of immediately available funds each month in a
single payment. If on four occasions during said period the Company fails to
make such payment in full when due, an Event of Default shall exist under
Section 9.1 (b) of the Existing Note Purchase Agreement.
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2.3 Amendments to the Warrants.
(a) The defined terms "Expiration Date" and "Initial Purchase
Price" set out in Section 7.1 of the Warrant Agreement are hereby
amended and restated to read in their entirety as follows:
"Expiration Date" - means 5:00 p.m. (Eastern Standard Time) on
March 31, 2004.
"Initial Purchase Price" - means $0.75 per share."
The Warrant Certificates and the form of Warrant Certificates
attached to the Warrant Agreement as Attachment as Attachment A are also
amended to be consistent with the foregoing amendments.
(b) The Company will at the request of the Noteholder execute
and deliver new Warrant Certificates reflecting the foregoing
amendments.
3. WARRANTIES AND REPRESENTATIONS
To induce the Noteholder to enter into this Amendment, the Company
warrants and represents to the Noteholder that as of the date hereof the
representations set forth in this Section 3 are true and correct in all material
respects.
3.1 Authorization, Execution and Enforceablility.
The execution and delivery of this Amendment by the Company and the
Subsidiaries set forth below has been duly authorized by all necessary action on
the part of the Company and such Subsidiaries. The Amended Note Purchase
Agreement and the Warrant Agreement and Warrant Certificates as amended hereby
constitute valid and binding obligations fo the Company, enforceable in
accordance with their terms.
3.2 Existence of Defaults.
After giving effect to this Amendment, no Default or Event of Default
will exist under the Amended Note Purchase Agreement or any other agreement of
the Company evidencing or governing Debt.
3.3 Government Consent.
Neither the execution and delivery by the Company of this Amendment nor
the performance by the Company of its obligations under the Amended Note
Purchase Agreement or the Warrant Agreement or Warrant Certificates as amended
hereby is such as to require a consent, approval or authorization of, or filing,
registration or qualification with, any Governmental Authority on the part of
the Company as a condition thereto.
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3.4 Subsidiaries and Affiliates.
Attached hereto a Schedule 3.4 is a true and correct listing of the
Company's Subsidiaries and Affiliates, indicating (in the case of Subsidiaries)
the percentage of the Company's ownership therein.
4. MISCELLANEOUS
4.1 Scope of Amendment.
Except as expressly provided herein,
(a) no other provisions of the Existing Note Purchase
Agreement, the Warrant Agreement or the Warrant Certificates are
modified or changed by this Amendment,
(b) the Interest Expense Coverage Ratio and the Consolidated
Net Worth requirements set forth in Section 7.4 and Section 7.5 of the
Original Note Purchase Agreement, for the periods other than those set
forth in Section 2.1 (a) and Section 2.1 (b) hereof, shall remain as
set forth in the Original Note Purchase Agreement, and
( c) the provisions of the Existing Note Purchase Agreement, the
Warrant Agreement and the Warrant Certificates shall continue in full
force and effect.
The Company hereby acknowledges, confirms, reaffirms and ratifies all of its
obligations and duties under the Amended Note Purchase Agreement, the Notes and
all agreements related thereto. This Amendment is not a limitation on the
ability of the Noteholder to exercise any of its rights and remedies due to any
Default or Event of Default under the Amended Note Purchase Agreement.
4.2 References to Note Purchase Agreements.
Upon the effectiveness of this Amendment, each reference to the "Note
Purchase Agreement" the "Warrant Agreement" and the "Warrant Certificates" in
the Amended Note Purchase Agreement and each agreement or document referring
thereto shall mean and be a reference to the Amended Note Purchase Agreement,
the Warrant Agreement and the Warrant Certificates as amended hereby.
4.3 Successors Bound.
This Amendment shall inure to the benefit of, be enforceable by, and be
binding upon the successors and assigns of each of the parties hereto.
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4.4 Governing Law.
This Amendment shall be construed and enforced in accordance with and
governed by the laws of the State of New York, including Section 5-1401 of the
New York General Obligations Law, but excluding all other choice-of-law and
conflicts-of-law rules.
4.5 Final Written Expression.
This Amendment may not be contradicted by evidence of any actual or
alleged prior, contemporaneous or subsequent understandings or agreements of the
parties, written or oral, express or implied, other than a writing which
expressly amends or supersedes this Amendment, and there are no unwritten oral
understandings or agreements between the parties concerning the subject matter
of this Amendment.
4.6 Effectiveness.
This Amendment may be executed in one or more counterparts and each set
of counterparts which, collectively, show execution by the Company, each of the
Subsidiaries and the Noteholder shall constitute one duplicate original. This
Amendment shall be deemed to have become effective as of the date hereof, only
when all of the following have occurred:
(a) the execution of a counterpart hereof by the Company, each
of the Subsidiaries and the Noteholder,
(b) the execution by the Company of one or more new Warrant
Certificates evidencing the amendments made by Section 2.3 hereof, and
(c) the delivery of such counterpart and such Warrant
Certificates to special counsel for the Noteholder, Xxxxxxx X. Xxxxx,
Esq., Xxxx & Xxxxxx, Xxx Xxxxx Xxxxxx, Xxxxxxxx, XX 00000, Fax:
(000) 000-0000, (regardless of whether any or all of such executions
and deliveries occur before or after the date hereof).
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Schedule 3.4
Affiliates and Subsidiaries
---------------------------
I. Affiliates
----------
The following own the approximate percentage of the Company's Common
Stock set opposite its name:
Steel Partners, II, L.P. 14.3%
Xxxxxxxx Berggnuen 9.3%
Xxxx and Xxxxxxxx Xxxxxxxx 6.4%
Imperial Capital, L.L.C. 6.1%
II Subsidiaries
------------
Jurisdiction of %Owned by
Name of Subsidiary Incorporation Company
------------------ --------------- ---------
Aquagenix Land Water Technologies, Inc. Florida 100%
Florida Underground Petroleum Tank Florida 100%
Contractors, Inc.
Xxxx Environmental Services, Inc. New Jersey 100%
IN WITNESS WHEREOF, this Amendment No. 5 has been duly executed as of the date
first written above.
AQUAGENIX, INC.
By : /s/Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:President & CEO
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By:/s/Xxxxx X. Xxxxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Investment Officer
Aquagenix Land-Water Technologies, Inc. (f/k/a Environmental Waterway
Management, Inc.) Florida Underground Petroleum Tank Contractors, Inc. and Xxxx
Environmental Services, Inc. each consent to eh foregoing amendments and
reaffirm their respective obligations under the Subsidiary Guaranties and the
Subsidiary Security Agreements.
AQUAGENIX LAND-WATER
TECHNOLOGIES, INC.
(f/k/a Environmental
Waterway Management, Inc.)
By:/s/ Xxxxxxx X. Xxxxxxxx
Name:Xxxxxxx X. Xxxxxxxx
Title: President
FLORIDA UNDERGROUND PETROLEUM
TANK CONTRACTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name:Xxxxxxx X. Xxxxxxxx
Title:President
XXXX ENVIRONMENTAL SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President
