EXHIBIT 10.20.17
REPRICING RIGHTS AGREEMENT
--------------------------
THIS REPRICING RIGHTS AGREEMENT ("Repricing Rights Agreement") is made
as of the 1st day of February 2002, by and between EUROTECH, LTD., a District of
Columbia Corporation (the "Company"), and XXXXXXXX LLC, a Cayman Islands entity
("Investor").
A. The Company and the Investor are simultaneous herewith executing and
delivering the Transaction Documents as same are defined in the Securities
Purchase Agreement for the Company's Series A Convertible Preferred Stock (the
"Convertible Preferred Stock"); and
B. Pursuant to the Certificate of Designation, the Convertible
Preferred Stock is convertible into Common Stock of the Company; and
C. The Company has agreed to provide Investor, and any transferee or
assignee of the Investor, with certain repricing rights with respect to the
Common Stock issuable upon conversion of the Convertible Preferred Stock as set
forth herein.
NOW, THEREFORE, it is mutually agreed by and between the parties as
follows:
1. Except as the context may otherwise require, terms not otherwise
defined herein shall have the meaning ascribed to them in the Securities
Purchase Agreement dated February 1 , 2002, or the Certificate of Designation
for the Convertible Preferred Stock filed on February 1, 2002.
(a) "CLOSING BID PRICE" shall mean the closing bid price of
the Common Stock as reported, at the option of Investor, by Bloomberg, LP or the
American Stock Exchange (AMEX) or such other Principal Market on which the
Common Stock is traded.
1. "PRINCIPAL MARKET" shall mean the market or
exchange whichever is at the time the principal trading exchange or market for
the Common Stock.
2. A. (a) REPRICED SHARES. Solely for the purposes of this
section 2 of this Agreement, the following definitions shall apply:
(b) "EFFECTIVE DATE" shall mean the effective date of the
Registration Statement covering the Registrable Securities (as those
terms are defined in the Registration Rights Agreement).
(c) "REPRICING PERIOD" - A Repricing Period shall be deemed to
have commenced on the first Trading Day of each calendar month on or
after October 1, 2002, if during the prior calendar month, the Investor
shall have delivered a notice of conversion to convert any shares of
Convertible Preferred Stock to Common Stock.
(d) "TARGET PRICE" shall mean $3.618, which shall be equitably
adjusted from time to time, in the event of any adjustment of the
Conversion Price pursuant to Section 5 of the Certificate of
Designation.
(e) "REPRICED SHARES" shall mean Shares of Common Stock issued
or issuable in respect of notices of conversion delivered during the
month preceding the commencement of a Repricing Period.
(f) "TRADING DAY" shall mean a date on which shares of the
Company's Common Stock trade on its Principal Market.
B. Repricing Period. Each " Repricing Period" shall commence on the
first Trading Day of a month, and end twenty (20) Trading Days after such date.
If the average of the lowest Closing Bid Prices for any five (5) Trading Days
(not necessarily consecutive) during a Repricing Period (the "REPRICING PRICE"),
is not equal to or greater than the Target Price, then Repriced Shares shall be
repriced, and the Company shall issue to Investor the number of additional
shares of Common Stock as determined according to the following formula:
( Target Price - Repricing Price) x (# of the Repriced Shares)
/Repricing Price.
C. In lieu of issuing Repriced Shares, the Company may elect by notice
given at least three (3) Trading Days prior to the commencement of a Repricing
Period, to redeem the Repriced Shares for such Repriced Period by payment to the
Investor of an amount determined according to the following formula:
Repriced Shares x Target Price
The terms and conditions of payment shall be in accordance with Sections 7(b)
and 7(c) of the Certificate of Designations for the Convertible Preferred Stock.
D. Investor shall provide facsimile notice to the Company substantially
in the form of Exhibit A annexed hereto, within five (5) Trading Days after the
end of each Repricing Period concerning the number of Repriced Shares due to
Investor.
E. Without requisite shareholder approval as required by the listing
agreement of the Principal Market and an increase in the number of authorized
shares of Common Stock to 200,000,000, the Company shall not be obligated to
issue any Repriced Shares until such shareholder approval has been obtained and
such increase in the number of authorized shares of Common Stock has occurred.
3. The parties hereto have previously executed and delivered the Common
Stock Purchase Agreement dated April 17, 2000 (Tranche B) for 2,000,000 shares
and the related other Transaction Documents, as more particularly defined in the
Common Stock Purchase Agreement (a copy of which have been filed with the
Securities and Exchange Commission as Exhibits 10.20.6 and 10.20.7 to the
Company's Form 10-Q for the quarter ended March 31, 2000 and the quarter ended
June 30, 2000, respectively); and
4. The parties hereto have previously executed and delivered the Common
Stock Purchase Agreement dated March 30, 2001 for 1,333,333 shares and the
related other Transaction Documents, as more particularly defined in the Common
Stock Purchase Agreement (the "2001 SPA") (a copy of which have been filed with
the Securities and Exchange Commission as Exhibits 10.20.13 and 10.20.14 to the
Company's Form 10-Q for the quarter ended March 31, 2001;
5. The parties have agreed to further modify certain terms and
provisions of all the Common Stock Purchase Agreements referred to in Paragraphs
3 and 4 above, as set forth herein and in Paragraphs 6 and 7 respectively.
Sections 8.6 of the Common Stock Purchase Agreements are hereby deleted and the
Company's obligation with respect to available shares is to authorize and
reserve for issuance, free from preemptive rights, 10,000,000 shares of Common
Stock for purposes of issuance of the shares pursuant to Paragraphs 6.C and 7 of
this Repricing Rights Agreement. The Company shall, subsequent to obtaining the
Authorizations and the filing of all necessary amendments to the Articles of
Incorporation in connection therewith, have at all times thereafter authorized
and reserved for issuance, free from preemptive rights, 20,000,000 shares of
Common Stock. The foregoing sentence is not intended as a limitation on the
obligations of the Company to issue shares pursuant to Paragraphs 6.C and 7 of
this Repricing Rights Agreement subsequent to obtaining the Authorizations and
the filing of all necessary amendments to the Articles of Incorporation in
connection therewith.
6. Solely with respect to the 2,000,000 shares of Tranche B, Sections
2.3, 2.4, 2.7, 8.5 and 8.6 of the Common Stock Purchase Agreement are hereby
deleted and a new Section 2.3 is hereby inserted to read as follows:
A. The 2,500,000 shares delivered pursuant to a letter agreement dated
December 28, 2001 shall be deemed in full satisfaction by the Company of its
obligations with respect to the Second and Third Repricing Period, including any
obligation of either party under Paragraph 2 of the letter agreement dated
December 28, 2001.
B. On February 1, 2002, the Company shall issue to Purchaser 6,000,000
additional shares (the "Additional Shares") in satisfaction of its obligations
with respect to the Fourth and Fifth Repricing Periods. With respect to the
number of additional shares issuable pursuant to Paragraphs 6.C and 7of this
Repricing Rights Agreement, the number of shares shall be reduced or increased,
as the case may be and in four equal installments by the amount that the number
of Additional Shares are greater than (in which case there shall be a reduction)
or less than (in which case there shall be an increase) the number of shares
exceeding zero determined according to the following formula:
(i) As to 3,000,000 of the Additional Shares: (3.76- Measurement
Period Price) x (333,333)/ Measurement Period Price), where
the Measurement Period Price is the average Closing Bid Price
for the period commencing on March 1, 2002, and ending twenty
(20) Business Days after such date. For the purposes hereof, a
Business Day shall be defined as a day when the Principal
Market for the Common Stock is open and the Registration
Statement, as hereinafter defined, has not been suspended or
withdrawn
(ii) As to 3,000,000 of the Additional Shares: (3.76- Measurement
Period Price) x (333,333)/ Measurement Period Price), where
the Measurement Period Price is the average Closing Bid Price
for the period commencing on April 1, 2002, and ending twenty
(20) Business Days after such date. For the purposes hereof, a
Business Day shall be defined as a day when the Principal
Market for the Common Stock is open and the Registration
Statement, as hereinafter defined, has not been suspended or
withdrawn
The number of shares subject to repricing and the price of $3.76 shall
further be equitably adjusted, from time to time, in the event of any adjustment
of the Conversion Price pursuant to Section 5 of the Certificate of Designations
for the Convertible Preferred Stock. In the event that the adjustment to the
number of additional shares issuable pursuant to Paragraphs 6.C and 7 set forth
in the first paragraph of this Paragraph 6.B of this Repricing Rights Agreement
results in a reduction in the number of additional shares issuable pursuant to
Paragraphs 6.C and 7of this Repricing Rights Agreement exceeding the number of
additional shares issuable pursuant to Paragraphs 6.C and 7 of this Repricing
Rights Agreement (the amount of such excess, if any, the "Excess Shares"),
Investor shall, within 30 days after the end of the Third Repricing Period of
Paragraph 7 of this Repricing Rights Agreement, surrender to the Company for
cancellation, without payment of any consideration by the Company therefore,
shares of Common Stock owned by Investor in an amount equal to the Excess Shares
(the "Excess Share Obligation"). If Investor does not own sufficient shares of
Common Stock to satisfy the Excess Share Obligation, Investor shall be obligated
to acquire sufficient shares of Common Stock, in open market purchases or
otherwise, to satisfy the Excess Share Obligation.
C. SIXTH REPRICING PERIOD - TRANCHE B. The "Sixth Repricing Period"
shall commence on May 1, 2002 and end twenty (20) Business Days thereafter. If
the average Closing Bid Price for the twenty (20) Business Days during the Sixth
Repricing Period (the "Sixth Repricing Price"), is not equal to or greater than
$3.76, then the Purchaser may request that up to 333,334 Shares shall be
repriced. The Company shall issue to Purchaser the number of additional Shares
as determined according to the following formula:
(3.76 - Sixth Repricing Price) x (333,334)/ Sixth Repricing Price
7. Solely with respect to the 1,333,333 shares under the 2001 SPA,
which have not been repriced as of the date hereof, Sections 2.3, 2.4, 2.5 , 8.5
and 8.6 of the 2001 SPA are hereby deleted and new Sections 2.3, 2.4, 2.5 and
8.5 are hereby inserted to read as follows:
2.3 FIRST REPRICING PERIOD. The "FIRST REPRICING PERIOD" shall commence
on June 1, 2002, and end twenty (20) Business Days after such date. If the
average of the lowest five (5) Closing Bid Prices (not necessarily consecutive)
for the twenty (20) Business Days during the First Repricing Period (the "First
Repricing Price"), is not equal to or greater than $3.76, then Purchaser may
request that up to 444,444 Shares shall be repriced. The Company shall issue to
Purchaser the number of additional Shares as determined according to the
following formula:
(3.76 - First Repricing Price) x (444,444)/ First Repricing Price)
2.4 SECOND REPRICING PERIOD. The "SECOND REPRICING PERIOD" shall
commence on July 1, 2002 and end twenty (20) Business Days thereafter. If the
average of the lowest five (5) Closing Bid Prices (not necessarily consecutive)
for the twenty (20) Business Days during the Second Repricing Period (the
"SECOND REPRICING PRICE"), is not equal to or greater than $3.76, then Purchaser
may request that up to 444,444 Shares shall be repriced. The Company shall issue
to Purchaser the number of additional Shares as determined according to the
following formula:
(3.76 - Second Repricing Price) x (444,444)/ Second Repricing Price
2.5 THIRD REPRICING PERIOD. The "THIRD REPRICING PERIOD" shall commence
on August 1, 2002 and end twenty (20) Business Days thereafter. If the average
of the lowest five (5) Closing Bid Prices (not necessarily consecutive) for the
twenty (20) Business Days during the Third Repricing Period (the "THIRD
REPRICING PRICE"), is not equal to or greater than $3.76, then the Purchaser may
request that up to 444,445 Shares shall be repriced. The Company shall issue to
Purchaser the number of additional Shares as determined according to the
following formula:
(3.76 - Third Repricing Price) x (444,445)/ Third Repricing Price)
The number of shares subject to repricing and the price of $3.76 shall
further be equitably adjusted, from time to time, in the event of any adjustment
of the Conversion Price pursuant to Section 5 of the Certificate of Designations
for the Convertible Preferred Stock.
8.5 Without requisite shareholder approval as required by the listing
agreement of the Principal Market, the Company shall not issue an aggregate
number of Shares under this Agreement that exceeds 19.9% of the shares of Common
Stock issued and outstanding on the date of the Initial Closing (the "Share
Limitation") until such shareholder approval has been obtained.
8. A. Eurotech and Xxxxxxxx covenant and agree that the consideration
paid by Xxxxxxxx pursuant to the Common Stock Purchase Agreements is the
consideration paid for the initial shares of Common Stock issued pursuant
thereto and the shares of Common Stock issuable pursuant to the repricing right
granted pursuant thereto. Eurotech shall be under no obligation to issue
additional shares pursuant to the Paragraphs 6 and 7 hereunder to the extent
that the number of Initial Shares and such additional shares shall exceed the
result of (i) the purchase price paid pursuant to the Common Stock Purchase
Agreements divided by (ii) the current par value of the Common Stock. Eurotech
covenants and agrees that it will not without the prior written consent of
Xxxxxxxx increase the par value of its Common Stock until 90 days after the end
of the any Repricing Period hereunder.
GENERAL
-------
9. If during any Repricing Period the applicable Registration Statement
is suspended or no longer effective, or the trading of the Common Stock is
delisted or suspended on the Principal Market on which the Common Stock is
listed, the Repricing Period shall be extended for such number of Trading Days
during which the Registration Statement or trading was suspended, delisted, or
no longer effective.
10. The exercise price and expiration dates in the Warrants issued by
the Company to Investor on December 31, 1999 and April 25, 2000, for 200,000
Shares and 500,000 Shares respectively, are each hereby amended to equal $1.00
per Share, and to expire on December 31, 2006. Upon issuance of replacement
warrants in accordance herewith, the Investor shall surrender the existing
warrants for cancellation.
11. (a) The Company understands that a delay in the issuance of the
Repriced Shares could result in economic loss to the Investor. As compensation
to the Investor for such loss, the Company agrees to pay late payments to the
Investor for late issuance of Shares required to be issued hereunder in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond seven (7) business days from the
end of any Repricing Period ( "the Delivery Date")):
No. Business Days Xxxx Xxxx Payment For Each 20,000
---------------------- ----------------------------
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000 +$200 for each Business
Day Late beyond 10 days
The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. The Company shall pay any payments incurred under
this Section in immediately available funds upon demand. Nothing herein shall
limit the Investor's right to pursue actual damages for the Company's failure to
issue and deliver the Common Stock to the Investor.
(b) If, by the relevant Delivery Date, the Company fails for any
reason to deliver the Repriced Shares to be issued, and the holder (a
"Investor") purchases, in an arm's-length open market transaction or otherwise,
shares of Common Stock (the "Covering Shares") in order to make delivery in
satisfaction of a sale of Common Stock by the Investor (the "Sold Shares"),
which delivery such Investor anticipated to make using the Shares to be issued
upon such conversion (a "Buy-In"), the Investor shall have the right, to require
the Company to pay to the Investor, in addition to the amounts due under Section
(a) hereof (but in addition to all other amounts contemplated in other
provisions of the Transaction Documents, and not in lieu of any such other
amounts), the Buy-In Adjustment Amount (as defined below). The "Buy-In
Adjustment Amount" is the amount equal to the excess, if any, of (x) the
Investor's total purchase price (including brokerage commissions, if any) for
the Covering Shares over (y) the net proceeds (after brokerage commissions, if
any) received by the Investor from the sale of the Sold Shares. The Company
shall pay the Buy-In Adjustment Amount to the Company in immediately available
funds immediately upon demand by the Investor. By way of illustration and not in
limitation of the foregoing, if the Investor purchases shares of Common Stock
having a total purchase price (including brokerage commissions) of $11,000 to
cover a Buy-In with respect to shares of Common Stock it sold for net proceeds
of $10,000, the Buy-In Adjustment Amount which Company will be required to pay
to the Investor will be $1,000.
(c) In lieu of delivering physical certificates representing the
Common Stock issuable pursuant to this Agreement, provided the Company's
transfer agent is participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer program, upon request of the Investor and its
compliance with the provisions contained in this paragraph, so long as the
certificates therefore do not bear a legend and the Investor thereof is not
obligated to return such certificate for the placement of a legend thereon, the
Company shall use its best efforts to cause its transfer agent to electronically
transmit the Repriced Shares issuable upon conversion to the Investor by
crediting the account of Investor's Prime Broker with DTC through its Deposit
Withdrawal Agent Commission system.
(d) The Company will authorize its transfer agent to give information
relating to the Company directly to the Investor or the Investor's
representatives upon the request of the Investor or any such representative, to
the extent such information relates to (i) the status of shares of Repriced
Shares issued or claimed to be issued to the Investor, or (ii) the number of
outstanding shares of Common Stock of all stockholders as of a current or other
specified date. The Company will provide the Investor with a copy of the
authorization so given to the transfer agent.
10. Except as specifically set forth herein, nothing contained herein
shall in any way be deemed to effect or modify the representations, warranties,
rights and obligations of the respective parties as set forth in the Transaction
Documents.
11. As hereby modified and amended, the Transaction Documents remain in
full force and effect. This Agreement supersedes any prior Modification
Agreement or Amendment executed between the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
EUROTECH, LTD.
By: /s/ Xxx X. Xxxxxxxxx
-----------------------------
Name: Xxx X. Xxxxxxxxx
Title: President and CEO
XXXXXXXX LLC
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
Title: Director
