Exhibit 10.1
 
Execution Version

 
AMENDMENT NO. 1 TO
SECURITIES PURCHASE AND SALE AGREEMENT
 
THIS AMENDMENT NO. 1 TO SECURITIES PURCHASE AND SALE AGREEMENT (this
“Amendment”), dated as of September 8, 2010, is made by and among CAPRIUS, INC.,
a Delaware corporation (“Caprius”), M.C.M. ENVIRONMENTAL TECHNOLOGIES, INC., a
Delaware corporation (“M.C.M.”), M.C.M. ENVIRONMENTAL TECHNOLOGIES LTD., an
Israeli corporation (“M.C.M. Israel”) (Caprius, M.C.M. and M.C.M. Israel may be
individually referred to as a “Borrower” and collectively referred to as the
“Borrowers”), and VINTAGE CAPITAL GROUP, LLC, a Delaware limited liability
company (together with its successors and assigns, the “Purchaser”).
 
R E C I T A L S
 
WHEREAS, the Borrowers and the Purchaser are parties to that certain Securities
Purchase and Sale Agreement, dated as of September 16, 2009 (as amended,
restated, supplemented or otherwise modified from time to time, the “Purchase
Agreement”);
 
WHEREAS, the Events of Default set forth on Schedule A hereto have occurred and
are continuing under the Purchase Agreement (collectively, the “Specified Events
of Default”);
 
WHEREAS, the Borrowers and the Purchaser have agreed to amend the Purchase
Agreement as set forth herein; and
 
WHEREAS, capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement;
 
A G R E E M E N T
 
NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration paid by each party to the other, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
 
1.           Background.
 
(a)           The Borrowers acknowledge and agree that as of August 31, 2010,
the outstanding principal amount of the Obligations (exclusive of the
Capitalized Obligations (as defined below)) to the Purchaser under the Purchase
Agreement was $3,091,037.01.  The foregoing amount does not include all of the
interest, fees, costs and expenses to which the Purchaser is entitled under the
terms and provisions of the Investment Documents.  The Borrowers acknowledge and
agree that such Obligations are outstanding, and they have no right to offset,
defense or counterclaim with respect to such Obligations.
 
 
 

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(b)           The Borrowers acknowledge and agree that as of August 31, 2010,
the outstanding principal amount of all PIK Notes (including PIK Notes accruing
at the Default Rate) and all fees, costs and expenses for which the Purchaser is
entitled to payment or reimbursement under the Purchase Agreement (including,
without limitation, the Closing Fee, the Facility Fee, forbearance fees, the
Amendment Fee and the fees, costs and expenses of the Purchaser’s professionals
and advisors) (the “Capitalized Obligations”) was $1,270,707.98.  The foregoing
amount does not include all of the interest, fees, costs and expenses to which
the Purchaser is entitled under the terms and provisions of the Investment
Documents.  The Borrowers acknowledge and agree that the Capitalized Obligations
are outstanding, and they have no right to offset, defense or counterclaim with
respect to such Capitalized Obligations.
 
(c)           The Borrowers acknowledge and agree that as of August 31, 2010,
the outstanding Capitalized Obligations exclusive of the principal amount of all
PIK Notes (including PIK Notes accruing at the Default Rate) was $808,143.44
(the “Amendment No. 1 Capitalized Obligations”).
 
(d)           The Borrowers acknowledge and agree that the Specified Events of
Default have occurred and certain of such Specified Events of Default are
continuing as of the date hereof.
 
(e)           The Borrowers acknowledge and agree that, as a result of the
existence of the Specified Events of Default, the Purchaser has no obligation to
make additional loans or otherwise extend credit to the Borrowers under the
Investment Documents or otherwise and the Purchaser has the right to exercise
its rights and remedies under the Investment Documents.
 
2.           Amendments to Purchase Agreement.  Effective upon the Amendment
No. 1 Effective Date, the Purchase Agreement is hereby amended as follows.
 
(a)           Section 1.1 of the Purchase Agreement is hereby amended by
deleting the definition of “Subsequent Term Maximum Availability” in its
entirety and replacing it with the following:
 
““Subsequent Term Maximum Availability” shall mean Four Million Dollars
($4,000,000) (exclusive of Capitalized Obligations incurred by the Borrowers
prior to, on or following the Amendment No. 1 Effective Date).”
 
(b)           Section 1.1 of the Purchase Agreement is hereby amended by
inserting the following new definitions in their proper alphabetical order:
 
““Amendment No. 1” means that certain Amendment No. 1 to Securities Purchase and
Sale Agreement, dated as of September 8, 2010, by and among the Borrowers and
the Purchaser.”
 
““Amendment No. 1 Capitalized Obligations” has the meaning ascribed thereto in
Amendment No. 1.”
 
““Amendment No. 1 Effective Date” has the meaning ascribed thereto in Amendment
No. 1.”
 
““Amendment No. 1 Waiver/Amendment Effective Date” has the meaning ascribed
thereto in Amendment No. 1.”
 
 
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““Capitalized Obligations” has the meaning ascribed thereto in Amendment No. 1.”
 
““Subsequent Term” shall mean the period from the Amendment No. 1 Effective Date
through the earlier of (a) the Maturity Date (as such term is defined in the
Note) and (b) the occurrence of an Event of Default that has not been waived by
the Purchaser in its sole and absolute discretion.”
 
(c)           Section 2.5.2 of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
 
“2.5.2           Attached hereto as Schedule 2.5(b) is a budget and a statement
of forecasted cash receipts for the Borrowers prepared by the Borrowers for the
Subsequent Term which has been approved by the Purchaser (the “Subsequent
Approved Budget”).  From time to time during the Subsequent Term, if any, the
Administrative Borrower may request that the Purchaser fund Advances under the
Note to or on behalf of the Borrowers, which request shall be in the form of a
Disbursement Request and specify the principal amount of the proposed Advance
and the item(s) in the Subsequent Approved Budget to which the request
relates.  The Purchaser shall fund Disbursement Requests not later than
three (3) Business Days following receipt thereof; provided, that any
Disbursement Request received by the Purchaser after 11:00 a.m. (Los Angeles
time) on any Business Day (or received at any time on a day that is not a
Business Day) shall be deemed to have been received on the next succeeding
Business Day.  The Purchaser shall not be obligated to fund any Advance unless
it elects to do so in its sole and absolute discretion.  In no event during the
Subsequent Term shall (a) the Administrative Borrower request an Advance for any
item(s) other than in accordance with the Subsequent Approved Budget, (b) the
Administrative Borrower request any Advances more frequently than on the first
day of the Subsequent Term and each two week anniversary thereof and (c) the
aggregate amount of Advances under the Note (exclusive of Capitalized
Obligations incurred by the Borrowers prior to, on or following the Amendment
No. 1 Effective Date) made during the Subsequent Term exceed the Subsequent Term
Maximum Availability.”
 
3.           Amendment Fee.  On the Amendment No. 1 Effective Date, the
Purchaser shall be deemed to have earned, and the Borrowers hereby jointly and
severally agree to pay the Purchaser, an amendment fee (the “Amendment Fee”) of
Fifty Thousand Dollars ($50,000).  Such fee is nonrefundable and is fully earned
and payable upon the effectiveness of this Amendment and the Borrowers
acknowledge and agree that they shall be deemed to have requested an Advance on
the Amendment No. 1 Effective Date in an amount equal to the Amendment Fee.
 
4.           Conditions Precedent to Effectiveness.  This Amendment shall be
effective upon the first day that all of the following are satisfied (the
“Amendment No. 1 Effective Date”):
 
(a)           The Purchaser’s receipt of a counterpart hereof duly executed by
the Borrowers;
 
 
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(b)           The Purchaser’s receipt of the Amendment Fee; and
 
(c)           The representations and warranties of the Borrowers contained in
this Amendment and the Purchase Agreement shall be true and correct.
 
5.           Covenants, Waivers and Further Amendments to Purchase Agreement.
 
(a)           The Borrowers covenant and agree that the Borrowers shall, within
one (1) Business Day after receipt thereof, pay to the Purchaser all
collections, payments and proceeds of the Borrowers’ Accounts and all deposits,
pre-payments and cash-on-delivery payments received by the Borrowers on account
of any orders for products or sales of Inventory (excluding amounts received by
the Borrowers representing shipping costs, taxes and reimbursed out-of-pocket
expenses) exclusive of up to One Hundred and Fifty Thousand Dollars ($150,000)
of collections, payments and proceeds of the Borrowers' Accounts relating to
invoices dated prior to the Amendment No. 1 Effective Date.  In the event that
the Borrowers are obligated to return any deposits or pre-payments to a customer
for which the Purchaser previously received any payment pursuant to this
Section 5(a), upon demand of the Borrowers, the Purchaser shall return to the
Borrowers an amount equal to the payment so received.  All such payments (unless
returned to the Borrowers in accordance with the preceding sentence) shall be
applied to the Amendment No. 1 Capitalized Obligations (including all such
Amendment No. 1 Capitalized Obligations accruing or incurred on and after the
Amendment No. 1 Effective Date).  The Borrowers shall, prior to payment to the
Purchaser pursuant to this Section 5(a), cause all collections, payments and
proceeds subject to this Section 5(a) to be deposited in a bank account set
forth on Schedule 3.29 to the Purchase Agreement with respect to which a
Borrower has entered into a deposit account control agreement reasonably
acceptable to the Purchaser.
 
(b)           Effective upon the receipt by the Purchaser of payment in full of
cash of all then-outstanding Amendment No. 1 Capitalized Obligations (the
“Amendment No. 1 Waiver/Amendment Effective Date”), and provided that no Default
or Event of Default other than the Specified Events of Default has occurred and
is continuing, the Purchaser shall be deemed to have waived the Specified Events
of Default and the covenant set forth in Section 5(a) hereof shall terminate and
no longer be in force and effect.
 
(c)           Effective upon the Amendment No. 1 Waiver/Amendment Effective
Date, the Purchase Agreement is hereby amended as follows:
 
(i)           Section 9.20 of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
 
“9.20           Manufacturing Source.  The Borrowers shall establish a
manufacturing source based in the United States (or such other location as is
mutually agreed to by the Purchaser and the Borrowers), which source shall,
within one hundred and fifty (150) days following the Amendment No. 1
Waiver/Amendment Effective Date, deliver both a working senior unit and a
working junior unit (in each instance, a prototype or a first article unit) to
the Borrowers.”
 
 
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(ii)           Section 9.21 of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
 
“9.21           Unit Sales.  The Borrowers shall, (a) within thirty (30) days
following the Amendment No. 1 Waiver/Amendment Effective Date, recognize revenue
with respect to the sale of two (2) units to independent third party customers
on market terms pursuant to arms’ length transactions, (b) within ninety (90)
days following the Amendment No. 1 Waiver/Amendment Effective Date, recognize
revenue with respect to the sale of fifteen (15) units (including units counted
for purposes of clause (a) above) to independent third party customers on market
terms pursuant to arms’ length transactions, and (c) within one hundred and
fifty (150) days following the Amendment No. 1 Waiver/Amendment Effective Date,
recognize revenue with respect to the sale of twenty five (25) units (including
units counted for purposes of clause (b) above) to independent third party
customers on market terms pursuant to arms’ length transactions.  For the
purposes hereof, the Borrowers shall be deemed to have “recognized revenue,” (x)
with respect to sales to customers inside the United States, when a unit is
accepted by the customer in writing, and (y) with respect to sales to customers
located outside of the United States, when either (i) a unit departs the factory
and said departure is verified by an export manifest or (ii) the customer
executes a bill and hold letter agreement.”
 
6.           Representations and Warranties of the Borrowers.  Each Borrower
makes the following representations and warranties to the Purchaser, each and
all of which shall survive the execution and delivery of this Amendment:
 
(a)           This Amendment has been executed and delivered by duly authorized
representatives of each Borrower, and the Purchase Agreement, as modified and
amended by this Amendment, constitutes a legal, valid and binding obligation of
such Borrower, and is enforceable against such Borrower in accordance with its
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally;
 
(b)           After giving effect to this Amendment, no Default or Event of
Default has occurred or is continuing other than the Specified Events of
Default; and
 
(c)           After giving effect to this Amendment, all of the representations
and warranties of the Borrowers contained in the Purchase Agreement continue to
be true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to “materiality” or “Material Adverse
Effect” or “Material Adverse Change” in the text thereof, which representations
and warranties shall be true and correct in all respects subject to such
qualification) on and as of the date hereof as though made on and as of such
date, except to the extent that any such representation or warranty expressly
relates solely to an earlier date (in which case such representation or warranty
shall be true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to “materiality” or “Material Adverse
Effect” or “Material Adverse Change” in the text thereof, which representations
and warranties shall be true and correct in all respects subject to such
qualification) on and as of such earlier date.
 
 
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7.           No Waivers.  The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of the Specified Events of Default or
any other Default or Event of Default or any right, power or remedy of the
Purchaser under the Purchase Agreement or any of the other Investment Documents,
nor constitute a waiver of any provision of the Purchase Agreement or any of the
other Investment Documents, whether arising as a result of the Specified Events
of Default or any other Default or Event of Default or otherwise.  This
Amendment shall not constitute a modification of the Purchase Agreement or a
course of dealing between the Borrowers, on the one hand, and the Purchaser, on
the other hand, at variance with the Purchase Agreement such as to require
further notice by the Purchaser to the Borrowers to require strict compliance
with the terms of the Purchase Agreement and the other Investment Documents in
the future, except as expressly set forth herein. Each Borrower acknowledges and
expressly agrees that the Purchaser reserves the right to, and does in fact,
require strict compliance with all terms and provisions of the Purchase
Agreement and the other Investment Documents and reserves and preserves its
rights, remedies and powers with respect to the Specified Events of Default and
any other Default or Event of Default which may now exist or hereafter arise
under the Investment Documents.  No Borrower has knowledge of any challenge to
the Purchaser’s rights arising under the Investment Documents or the
effectiveness of the Investment Documents.
 
8.           Effect on Investment Documents.
 
(a)           The Purchase Agreement, as amended hereby, and each of the other
Investment Documents shall be and remain in full force and effect in accordance
with their respective terms and hereby are ratified and confirmed in all
respects.
 
(b)           Upon and after the effectiveness of this Amendment, each reference
in the Purchase Agreement to “this Agreement,” “hereunder,” “herein,” “hereof”
or words of like import referring to the Purchase Agreement, and each reference
in the other Investment Documents to “the Purchase Agreement,” “thereunder,”
“therein,” “thereof” or words of like import referring to the Purchase
Agreement, shall mean and be a reference to the Purchase Agreement as modified
and amended hereby.
 
(c)           To the extent that any terms and conditions in any of the
Investment Documents shall contradict or be in conflict with any terms or
conditions of the Purchase Agreement, after giving effect to this Amendment,
such terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Purchase Agreement as modified or
amended hereby.
 
(d)           This Amendment is an Investment Document.
 
 
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9.           Fees, Costs and Expenses.  The Borrowers jointly and severally
agree to pay on demand all fees, costs and expenses in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Amendment and the other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees, cost and expenses
of counsel for the Purchaser with respect thereto and with respect to advising
the Purchaser as to its rights and responsibilities hereunder and
thereunder.  The Borrowers acknowledge and agree that they shall be deemed to
have requested an Advance on the Amendment No. 1 Effective Date in an amount
equal to all such fees, costs and expenses for which the Purchaser has received
an invoice on or before such date.
 
10.           Counterparts.  This Amendment may be executed in any number of
separate counterparts and by the different parties hereto on separate
counterparts, each of which shall be deemed an original and all of which, taken
together, shall be deemed to constitute one and the same instrument. In proving
this Amendment in any judicial proceedings, it shall not be necessary to produce
or account for more than one such counterpart signed by the party against whom
such enforcement is sought. Any signatures delivered by a party by facsimile
transmission or electronic mail shall be deemed an original signature hereto.
 
11.           GOVERNING LAW.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AMENDMENT, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AMENDMENT AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
 
[The remainder of the page is intentionally blank.]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first written above.
 
 

 
BORROWERS:
 
CAPRIUS, INC.
           
By: 
/s/Dwight Morgan      
Name: Dwight Morgan
Title: Chief Executive Officer
                   
M.C.M. ENVIRONMENTAL TECHNOLOGIES, INC.
           
By: 
/s/Dwight Morgan      
Name: Dwight Morgan
Title: Chief Executive Officer
                   
M.C.M. ENVIRONMENTAL TECHNOLOGIES LTD.
         
 
By:
/s/George Aaron      
Name: George Aaron
Title: Chairman
         

 
 [SIGNATURE PAGE TO AMENDMENT NO. 1 TO
SECURITIES PURCHASE AND SALE AGREEMENT]

 
 

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PURCHASER:
 
VINTAGE CAPITAL GROUP, LLC
           
By: 
/s/Fred Sands      
Name: Fred Sands
Title: Chairman
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 [SIGNATURE PAGE TO AMENDMENT NO. 1 TO
SECURITIES PURCHASE AND SALE AGREEMENT]