EXHIBIT 10.15(a)
AMENDMENT NO. 1 TO RECAPITALIZATION AGREEMENT
Amendment No. 1 (this "Amendment"), dated as of January 26, 1998, amending
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the Recapitalization Agreement, dated as of September 24, 1997 (the
"Recapitalization Agreement"), among Air & Water Technologies Corporation, a
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Delaware corporation ("AWT"), Compagnie Generale des Eaux, a company organized
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under the laws of the Republic of France ("CGE"), and its indirect wholly-owned
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subsidiary, Anjou International Company, a Delaware corporation ("Anjou").
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WHEREAS, the parties hereto desire to amend the hereby amend and supplement
the Recapitalization Agreement in certain respects;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Definitions. Capitalized terms used herein but not otherwise
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defined herein shall have the meanings assigned to such terms in the
Recapitalization Agreement.
Section 2. Recapitalization Agreement Amendments. As of the date hereof,
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the Recapitalization Agreement is amended as follows:
(a) Section 1.2(a) is amended and restated in its entirety to read as
follows:
"(a) On a date (the "Record Date") to be determined by the Board in
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accordance with the Certificate of Incorporation and Bylaws of AWT and
the applicable rules of the American Stock Exchange (the "AMEX"), AWT
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shall declare a dividend (subject to the Registration Statement (as
hereinafter defined) becoming effective) to all holders of Class A
Common Stock of record as of the Record Date of such number of
transferable rights (a "Right"), which when multiplied by the
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Subscription Price shall equal $210,000,000 in gross proceeds. As
soon as practicable following the effective date of the Registration
Statement, AWT will distribute such Rights to such holders of Class A
Common Stock."
(b) Section 1.2(b) is amended and restated in its entirety to read as
follows:
"(b) Each Right shall entitle the holder thereof to
acquire (the "Basic Subscription Privilege"), at the Subscription
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Price, one share of Class A Common Stock (an "Underlying Share")
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(subject to AWT's obligation to issue shares of Class B Common Stock,
par value $.001 per share (the "Class B Common Stock"), in certain
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circumstances) and, for each holder other than CGE and Anjou, such
number of Warrants (as hereinafter defined) determined in accordance
with Section 1.2(c). All holders of Rights (other than CGE and Anjou)
who exercise the Basic Subscription Privilege may also subscribe for
additional Underlying Shares that are not otherwise purchased pursuant
to the exercise of Rights ("Excess Shares") at the Subscription
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Price, if any, subject to AWT's obligation to issue Class B Common
Stock (in certain circumstances) (the "Oversubscription Privilege").
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If an insufficient number of Excess Shares are available to satisfy
fully all elections to exercise the Oversubscription Privilege, the
available Excess Shares shall be prorated among holders who exercise
their Oversubscription Privilege. CGE hereby agrees to exercise its
Basic Subscription Privilege in full. The "Rights Offering" means the
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offering of Underlying Shares to holders of Rights pursuant to (i) the
Basic Subscription Privilege, (ii) the Oversubscription Privilege and
(iii) the Conditional CGE Subscription (as defined hereinafter)."
(c) Section 1.2(c) is amended by adding the following as the last sentence
thereof:
"'Warrant Shares' means the shares of Class A Common Stock issuable upon
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exercise of the Warrants."
(d) Section 1.2(f)(i) is amended and restated in its entirety to read as
follows:
"(i) elect to adopt as a term of the Rights Offering and this Agreement
a provision which provides that in the event AWT fails to obtain the
Requisite Consents (as hereinafter defined) and any person's beneficial
ownership of the voting power of the capital stock of AWT entitled to vote
in the election of directors would, upon the exercise of such holder's
Basic Subscription Privilege or Oversubscription Privilege or pursuant to
Section 1.3 of this Agreement, exceed 74% of the total voting power then
outstanding, then AWT shall issue to such
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person only such number of shares of Class A Common Stock as would cause
such person's aggregate beneficial ownership of the then outstanding
voting power of AWT to equal 74% and any additional shares to be issued
thereunder to such person shall be shares of Class B Common Stock, par
value $.001 per share (the "Non-Voting Common Stock"), of AWT which shall
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be non-voting shares of common stock of AWT and which shares shall
automatically convert into Shares of Class A Common Stock immediately upon
the earlier of August 1, 2000 or seventy five days following termination
of (by amendment of the Indenture (as hereinafter defined), redemption of
the Convertible Debentures (as hereinafter defined) or otherwise) of
Section 1501 of the Indenture; or"
(e) Section 5.1 is amended by restating the first sentence therein to read as
follows:
"As soon as reasonably practicable, AWT shall file with the SEC a
registration statement (the "Registration Statement") under the Securities
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Act in connection with the Rights Offering and with respect to the Rights,
the Underlying Shares, the Warrants and the Warrant Shares and shall use
its best efforts to effect the registration of the Rights, the Underlying
Shares, the Warrants and the Warrant Shares."
(f) Section 5.2 is amended by restating paragraph (a) therein to read as
follows:
"(a) In order to consummate the Recapitalization, AWT, acting through
the Board, shall, as promptly as reasonably practicable, in accordance
with applicable Law and AWT's Certificate of Incorpo-
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ation and Bylaws, duly approve and adopt an amendment to AWT's
Certificate of Incorporation (the "Charter Amendment") substantially in
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the form of Exhibit B to this Agreement (i) to increase the authorized
capital stock of AWT in order to permit the consummation of the
transactions contemplated by this Agreement and (ii) in the event the
Requisite Consents are not obtained, to amend the conversion rights of
holders of the Class B Common Stock to provide for automatic conversion of
shares of Class B Common Stock into Class A Common Stock upon the earlier
of (A) August 1, 2000 or (B) seventy-five days following the termination
of the application of Section 1501 of the Indenture (as hereinafter
defined) to such holder. CGE and Anjou agree to vote for or give their
written consent to AWT, as applicable, in respect of the Charter Amendment
and any other amendment to the Restated Certificate of Incorporation
necessary to consummate the transactions contemplated by this Agreement."
(g) Section 5.9 is amended by restating the first sentence therein to read as
follows:
"Prior to or concurrently with the commencement of the Rights Offering,
AWT shall commence a solicitation (the "Consent Solicitation") of consents
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to amendments to the Indenture, dated as of May 15, 1990, between AWT and
Midlantic National Bank, as Trustee, governing the Convertible Debentures
(the "Indenture") from the holders of not less than a majority in
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aggregate principal amount of the Convertible Debentures outstanding (the
consents from such holders, the "Requisite Consents") in order to exempt
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CGE and its affiliates from the application of Section 1501 of the
Indenture."
(h) Exhibit A is amended by amending and restating the paragraph captioned
"Registration of Warrant Shares" to read as follows:
"Holders of Warrants shall be able to exercise their Warrants only if
(i)(x) a registration statement relating to the Warrant Shares is then in
effect, and the Company has delivered to each person exercising a
Warrant a current prospectus meeting the requirements of the Securities
Act, or (y) the exercise of such Warrants is exempt from the registration
requirements of the Securities Act, and (ii) such securities are qualified
for sale or exempt from qualification under the applicable state blue sky
laws, AWT shall prepare, file and use its best efforts to cause to become
effective under the Securities Act a registration statement in respect of
all of the Warrant Shares. Subject to Black Out Periods (as hereinafter
defined) and Postponement Periods (as hereinafter defined), AWT shall use
its commercially reasonable efforts to keep such registration statement
continuously effective under the Securities Act in order to permit the
prospectus included therein to be lawfully delivered. Notwithstanding the
foregoing, AWT shall not be required to amend or supplement the
registration statement, any related prospectus or any document
incorporated therein by reference
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(i) for a period (a "Black Out Period") not to exceed the shorter of
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(x) the period ending on the date the information responsible for the
Black Out Period is disclosed to the public and (y) 60 days (provided that
no two Black Out Periods shall occur during any period of 135 consecutive
days) in the event that (1) an event occurs and is continuing as a result
of which the registration statement, any related prospectus or any
document incorporated therein by reference as then amended or supplemented
would, in AWT's good faith judgment, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, and (2)(A) AWT determines in its good faith
judgment that the disclosure of such event at such time would have a
material adverse effect on the business, operations or prospects of AWT or
(B) the disclosure otherwise relates to a material business transaction
which has not yet been publicly disclosed; provided that no Black Out
Period may be in effect during the six months prior to the Warrant
Expiration Date and there shall be no more than three Black Out Periods
during the term of the Warrants; or
(ii) in the event that the Company determines in its good faith
judgment that the current market price per share of the Class A Common
Stock is substantially below the Warrant Exercise Price such that
exercise of the Warrants is unlikely to occur, for a period (a
"Postponement Period") continuing until such time as the Company
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determines in its good faith judgment that exercise of the Warrants
appears likely; provided that during the Postponement Period the Company
(x) shall monitor the current market price per share of the Class A Common
Stock and (y) shall not permit the exercise of any Warrant unless the
Company shall have delivered to each person exercising a Warrant a current
prospectus meeting the requirements of Section 10(a) of the Securities
Act."
(i) Exhibit B is amended by restating Paragraph (iii) of Article THIRD to read
as follows:
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(iii) Paragraph 3A of Paragraph B.3 of Article FOURTH is hereby deleted
in its entirety and the following paragraph is inserted in lieu thereof:
3A. Conversion of Class B Common. On the Conversion Date (as
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such term is defined below), a holder's shares of Class B Common
shall automatically convert into the same number of shares of Class
A Common. For purposes of this Paragraph 3, the "Conversion Date"
shall mean the date which is the earlier of (i) August 1, 2000 or,
(ii) seventy-five days following the date on which the "Right to
Require Repurchase" provided in Section 1501 of the Indenture
governing the Corporation's 8% Convertible Subordinated Debentures
due 2015 (the "Debentures") which grants holders the right to
require the corporation to repurchase the Debentures when any person
becomes the beneficial owner of 75% or more of the voting stock of
the Corporation becomes inapplicable with respect to such holder.
Section 2 Parties in Interest. This Amendment shall be binding upon and
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inure solely to the benefit of each party hereto, and nothing in this Amendment,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Amendment.
Section 3 Governing Law. This Amendment shall be governed by, and construed
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in accordance with, the laws of the State of New York (without regard to
conflicts of laws principle thereof). All actions and proceedings arising out
of or relating to this Amendment shall be heard and exclusively determined in
any New York state or federal court sitting in the County of New York and the
parties hereto hereby consent to the jurisdiction of such courts in any such
action or proceeding.
Section 4 Headings. The descriptive headings contained in this Amendment are
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included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Amendment.
Section 5 Counterparts. This Amendment may be executed in one or more
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counterparts (including by facsimile transmission), and by the different parties
hereto in separate counterparts, each of which when executed shall be deemed to
be an
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original but all of which taken together shall constitute one and the same
agreement.
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IN WITNESS WHEREOF, CGE, Anjou and AWT have caused this Amendment to be
executed as of the date first written above by their respective officers
hereunto duly authorized.
COMPAGNIE GENERALE DES EAUX
By /s/ Francois Jobard
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Name: Francois Jobard
Title: Charge de Mission a la Direction Financiere
ANJOU INTERNATIONAL COMPANY
By /s/ Michael Avenas
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Name: Michel Avenas
Title: President
AIR & WATER TECHNOLOGIES CORPORATION
By /s/ Douglas A. Satzger
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Name: Douglas A. Satzger
Title: Senior Vice President