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EXHIBIT 10.3
September 25, 2007
AMENDMENT AND WAIVER
This Amendment and Waiver of the Securities
Purchase Agreement (“Purchase Agreement”) and
related 9% Senior Convertible Debentures due December 15, 2009
(“Debentures”) and Warrants to Purchase Common Stock
(“Warrants”), all dated as of December 15, 2006,
among Ecosphere Technologies, Inc. (the “Company”),
Enable Growth Partners LP, Enable Opportunity Partners LP,
Pierce Diversified Strategy Master Fund LLC, Ena Gemini
Master Fund, Ltd. and Frey Living Trust of 3-20-96. (each, an
“Investor” and together, the
“Investors”) is entered into as of the date set
forth above with respect to the following facts:
Capitalized terms that are used herein without definition
shall have the meanings ascribed to them in the Purchase
Agreement.
A. The Company proposes to enter into an Asset
Purchase Agreement (the “UES Sale Agreement”) with
Luxor Capital, LLC or its assigns (“Buyer”),
pursuant to which the Company will sell to Buyer substantially
all of the assets of the Company’s UltraStrip Envirobotic
Solutions, Inc. subsidiary (the “Sub”).
B. The Company acknowledges that the sale of the
Sub would, absent the waiver and consent of the Investors
provided by this Agreement, constitute an Event of Default under
Section 8(a)(viii) of the Debentures.
C. In order to permit the Company to enter into
the UES Sale Agreement, the Company requests that the Investors
waive (the “Waiver”) the requirements of Section
8(a)(viii) of the Debentures in respect of the transactions
contemplated by the UES Sale Agreement.
Now, therefore, in consideration of the premises
set forth above, by their execution below, each Investor and the
Company agrees as follows:
1.
Effective simultaneously with the closing of the
sale of the Sub, the Company shall cause Harris Cramer LLP as
escrow agent pursuant to that certain Escrow Agreement dated
September 19, 2007, the form of which is attached hereto as
Exhibit A (the “Escrow Agreement”), to release to
the Investors the aggregate sum of $4,000,000 as partial
prepayment of the Debentures. The amount to be paid to each
investor is as follows:
Enable Growth Partners LP
$2,351,063.88
Enable Opportunity Partners LP
$276,595.74
Pierce Diversified Strategy Master Fund LLC
$138,297.87
Gemini Master Fund, Ltd.
$425,531.86
Frey Living Trust of 3-20-96.
$808,510.66
2.
Provided that the partial prepayment in Section
1 above is made on or prior to October 1, 2007, each Investor
agrees to waive forever any interest accrued on the Debentures
through and including the date of the partial prepayment set
forth above, but not on any interest accruing on the remaining
balance of the outstanding Debentures from and after such date.
Subject to the payment of the sums set forth in Section 1
above, each Investor further waives (i) any breaches of the
Debentures or Securities Purchase Agreement through the date
hereof and (ii) the payment of interest on October 1, 2007 in
the form of unregistered shares of Common Stock. It is expressly
agreed that no Purchaser is waiving any subsequent breaches of
the Securities Purchase Agreement or any other Transaction
Document by the Company.
3.
The completion of the sale of the Sub shall not
constitute an Event of Default under the Debentures.
4.
The Conversion Price of the Debentures is hereby
reduced to $0.15, subject to further adjustment as set forth
therein.
5.
The Exercise Price of the Warrants is
hereby reduced to $0.15; subject to further adjustment as set
forth therein.
6.
The Company agrees and acknowledges that
the waivers granted hereunder relate only to the proposed UES
Sale Agreement and any subsequent transactions by the Company
shall; if otherwise required by any of the Transaction
Documents, require a separate consent or waiver from the
Investors. Except as specifically waived or modified by
the terms of this agreement, the Purchase Agreement, the
Debentures, the Warrants and the Registration Rights Agreement
shall remain unmodified and in full force and effect, and shall
not be in any way changed, modified or superseded by the terms
set forth herein.
Please indicate your agreement to the foregoing
Amendment and Waiver by signing a copy of this Agreement where
indicated below.
Ecosphere Technologies, Inc.
By: /s/ Dennis McGuire______________________
Agreed
To:
Dennis
McGuire, President and CEO
Enable Growth Partners LP
By:
/s/ Brendan O’Neil
Name:
Brendan O’Neil
Title:
Principal & Portfolio Manager
2
Enable Opportunity Partners LP
By:
/s/ Brendan O’Neil
Name:
Brendan O’Neil
Title:
Principal & Portfolio Manager
Pierce
Diversified Strategy Master Fund LLC, Ena
By:
/s/ Brendan O’Neil
Name:
Brendan O’Neil
Title:
Principal & Portfolio Manager
All c/o
Enable Capital Management LLC
One
Ferry Building, Suite 255
San
Francisco, CA 9411
Gemini
Master Fund, Ltd.
By:
/s/ Steven W. Winters
Name:
Steven W. Winters
Title:
President of the Investment Manager
c/o
Gemini Strategies, LLC
12220
El Camino Real, Suite 400
San
Diego, CA 92130
/s/
Philip Frey, Jr. ______________
Philip
Frey, Jr. as trustee of the Frey
Living
Trust dated 3-20-96
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT made as of September 19,
2007, between Ecosphere Technologies, Inc. (the
“Seller”) and Harris Cramer LLP (the “Escrow
Agent”).
WHEREAS, the Seller is selling subs
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