Exhibit 4.3
AMENDMENT NO. 2 TO LOAN AND WARRANT AGREEMENT AND
REGISTRATION RIGHTS AGREEMENT
This AMENDMENT NO. 2 TO LOAN AND WARRANT AGREEMENT AND REGISTRATION
RIGHTS AGREEMENT (this "Amendment") is made and entered into as of December
14, 2006, by and among Xxxxxx Companies, Inc., a Missouri corporation
("Zoltek"), and the lenders identified on the signature pages hereto (each, a
"Lender" and, collectively, the "Lenders").
RECITALS
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1. Zoltek and the Lenders are parties to a Loan and Warrant
Agreement, dated as of September 29, 2005, as amended by
that certain Amendment No. 1 to Loan and Warrant Agreement
and Registration Rights Agreement dated as of April 28, 2006
(as amended, the "September Purchase Agreement"), pursuant
to which Zoltek issued and sold to the Lenders an aggregate
of $60,000,000 of Notes and certain Warrants (each as
defined in the September Purchase Agreement). The Notes and
Warrants issued under the September Purchase Agreement are
referred to in this Amendment as the "September Notes" and
"September Warrants," respectively. Capitalized terms used
and not defined in this Amendment shall have the respective
meanings set forth in the September Purchase Agreement.
2. In connection with the September Purchase Agreement, Zoltek
and the Lenders entered into a Registration Rights
Agreement, dated as of September 29, 2005, as amended by
that certain Amendment No. 1 to Loan and Warrant Agreement
and Registration Rights Agreement dated as of April 28, 2006
(as amended, the "September Registration Rights Agreement"),
pursuant to which Zoltek undertook certain registration
obligations to the Lenders.
3. Zoltek and the Lenders now wish to further modify certain of
the terms of the September Purchase Agreement and the
September Registration Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Zoltek and each Lender, severally and not jointly, agree
as follows:
1. Exercise of September Warrants. Subject to the terms hereof, each Lender
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agrees to exercise 100% of the warrants issued to the Lender in
September 2005, December 2005 and February 2006 for an aggregate
of 827,789 shares of Common Stock (pertaining to September Warrants
to acquire an aggregate of 827,789 shares of Common Stock) on the
Business Day following the date of this Agreement ("Closing Date").
1.1 In consideration for such exercise, Zoltek shall issue to each
Lender a warrant in the form of Exhibit B attached hereto (the
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"Additional Warrants"), registered in the name
of such Lender, pursuant to which such Lender shall have the right to
acquire the number of shares of Common Stock indicated opposite such
Lender's name on Schedule A hereto under the heading "Additional
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Warrants" at an Exercise Price of $28.06 per share.
2. Closing. Subject to the terms hereof and Section 7 and notwithstanding any
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provision of the September Purchase Agreement to the contrary, each
Lender and Zoltek agree that the closing of the issuance of the
Additional Warrants (the "Closing") shall occur on the Closing Date.
2.1. In connection with the Closing, Zoltek shall issue to each
Lender a warrant in the form of Exhibit B hereto, registered
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in the name of such Lender pursuant to which such Lender
shall have the right to acquire the number of shares of
Common Stock indicated opposite such Lender's name on
Schedule A hereto under the heading "Additional Warrants."
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2.2. The Additional Warrants will not be exercisable into shares
of Common Stock until the Company has obtained Nasdaq
Approval. For the purposes of this Amendment, the term
"Nasdaq Approval" shall mean the date in which the Company
receives approval from Nasdaq to issue all of the Additional
Warrants and the underlying shares of Common Stock
contemplated by this Amendment. Zoltek shall use its best
efforts to obtain the Nasdaq Approval as promptly as
possible. To the extent Nasdaq requires Zoltek to obtain the
consent of its shareholders, Zoltek hereby agrees that the
provisions of Section 11(iii) of the September Warrants
shall apply and are hereby incorporated into this Amendment.
3. Registration. Zoltek will use commercially reasonable efforts to prepare and
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file a registration statement to cover all shares of Common Stock
issuable under the Additional Warrants and the Registrable Securities
issued to the Lenders in July 2006 and October 2006 pursuant to the
September Loan Agreement (the "Additional Registration Statement").
Such Additional Registration Statement shall constitute a
"Registration Statement" under the September Registration Rights
Agreement, and shall be subject to all the rights and obligations of
and upon each of Zoltek and the "Lenders" thereunder. With respect to
the Additional Registration Statement, as contemplated by Section
2(b) of the September Registration Rights Agreement, the Filing Date
shall be the 20th calendar day following the Closing Date. The
calculation of the Effectiveness Date with respect to the Additional
Registration Statement contemplated by Section 2(b) of the September
Registration Rights Agreement shall be the earlier of: (i) the 90th
day following the Closing Date; provided, however, that, if the
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Commission reviews and has written comments to the filed Registration
Statement that would require the filing of a pre-effective amendment
thereto with the Commission, then the Effectiveness Date under this
clause (i) shall be the 120th day following the date hereof and (ii)
the fifth Trading Day following the date on which Zoltek is notified
by the Commission that the initial Registration Statement will not be
reviewed or is no longer subject to further review and comments.
Notwithstanding any provision of Section 2(c) of the September
Registration
Rights Agreement to the contrary, in the event Zoltek breaches any of
its obligations with respect to the Additional Registration Statement
under this Section 3 or the September Registration Rights Agreement,
Zoltek shall issue to the Lenders an amount of unregistered Common
Stock equal to 35% of the total number of shares of Common Stock into
which the New Warrants and the convertible notes and warrants
originally issued to the Lenders in July 2006 and October 2006
pursuant to the September Loan Agreement would be convertible or
exercisable, as the case may be.
4. Certain Waivers.
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4.1. In consideration of the transactions contemplated herein,
with respect to the inability of the Company to maintain the
availability of the Registration Statement on Form S-1 (the
"Resale Registration Statement") filed by the Company and
declared effective by the SEC with respect to registration
of the resale of Registrable Securities issued to the
Lenders in September 2005, December 2005, February 2006 and
May 2006 pursuant to the September Loan Agreement, and
Registrable Securities issued to the Lender pursuant to the
2003 Securities Purchase Agreement, the 2004 Securities
Purchase Agreement, the 2004 Loan Agreement and the 2005
Loan Agreement (the "Prior Transactions"), (i) the Lenders
hereby agree to waive and release Zoltek from any Event and
any liquidated or other damages to which the Lenders may be
entitled under the September Registration Rights Agreement
and the Prior Registration Rights Agreements or otherwise,
and (ii) the Lenders hereby waive any Event of Default
arising or continuing under all notes, debentures and
warrants issued pursuant to the September Purchase Agreement
and the Prior Transactions. For the purposes of this Section
4, the term "Prior Registration Rights Agreements" shall
mean each of the registration rights agreements among Zoltek
and the Lenders executed in connection with the Prior
Transactions. Notwithstanding the foregoing, in the event
that the foregoing Resale Registration Statement has not
been made available for use by the Lenders on or prior to
December 31, 2006, this waiver shall be null and void and
shall not be deemed to extend to any such failure and all
provisions of the September Registration Rights Agreement
and the Prior Registration Rights Agreements applicable with
respect to failure to maintain the availability of the
Resale Registration Statement for use by the Lenders shall
be reinstated.
4.2. In consideration of the transactions contemplated herein,
with respect to the fact that the Company did not file a
Registration Statement or have a Registration Statement
declared effective with respect to registration of the
resale of Registrable Securities issued to the Lenders
pursuant to the September Loan Agreement (i) the Lenders
hereby waive and release Zoltek from any Event and any
liquidated or other damages to which the Lenders may be
entitled under the September Registration Rights Agreement
or otherwise, and (ii) the Lenders hereby waive any Event of
Default arising or continuing under all notes, debentures
and warrants issued pursuant to the September Purchase
Agreement and the Prior Transactions. Notwithstanding the
foregoing, in the event that
Zoltek has not satisfied its obligations with respect to the
Additional Registration Statement under Section 3 above,
this waiver shall be null and void and shall not be deemed
to extend to any such failure and all provisions to maintain
the availability of the Resale Registration Statement for
use by the Lenders shall be reinstated.
4.3. In consideration of the transactions contemplated herein,
with respect to the delay by the Company in filing with the
SEC proxy materials calling a meeting of its shareholders
seeking approval of the Shareholder Proposal prior to the
Proxy Filing Date or obtain shareholder approval of the
Shareholder Proposal by the Shareholder Approval Date as
provided in Section 5(b)(iii) of the September Notes, the
Lenders hereby waive any Event of Default arising or
continuing under all notes, debentures and warrants issued
pursuant to the September Purchase Agreement and the Prior
Transactions. Notwithstanding the foregoing, in the event
that proxy materials calling a meeting of its shareholders
seeking approval of the Shareholder Proposal are not filed
prior to January 15, 2007, this waiver shall be null and
void and shall not be deemed to extend to any such failure
and all provisions of the September Purchase Agreement shall
be reinstated.
4.4. In consideration of the transactions contemplated herein,
the Lenders hereby amend the provisions of Section 4.16 and
any other provision of the September Purchase Agreement
which would prohibit or restrict the ability of Zoltek to
utilize the net proceeds from the sale of the securities
under the September Purchase Agreement to satisfy a
judgement, settle or post a bond with respect to the action
filed in the United States District Court for the Eastern
District of Missouri by SP Systems Inc. against a subsidiary
of Zoltek in an amount not to exceed $36,000,000.
5. Continued Validity of Transaction Documents under Purchase Agreements. The
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parties hereto agree that the September Purchase Agreement, the
September Registration Rights Agreement and the Transaction Documents
entered into in connection therewith (as amended by this Amendment),
remain in full force and effect, modified to the extent and only to
the extent necessary to give effect to this Amendment and the
transactions herein contemplated.
6. Miscellaneous.
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6.1. Fees and Expenses. Zoltek has agreed to reimburse Xxxxxxxx
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Investment Master Fund, Ltd ("Xxxxxxxx") $15,000 for its
legal fees and expenses in connection with this Amendment.
Accordingly, the amount Xxxxxxxx must pay to Zoltek upon
exercise of the warrants under Section 1 shall be reduced by
$15,000. Except for the foregoing, each party hereto will
bear the fees and expenses of its own counsel and advisors
in connection with the negotiation and entering into of this
Amendment. Zoltek shall pay all transfer agent fees, stamp
taxes and other taxes and duties levied in connection with
the issuance of any Securities.
6.2. Entire Agreement. This Amendment and the Transaction
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Documents, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
6.3. Equal Treatment of Lenders. No consideration shall be
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offered or paid to any person to amend or consent to a
waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also
offered to all of the parties to the Transaction Documents.
For clarification purposes, this provision constitutes a
separate right granted to each Lender by Zoltek and
negotiated separately by each Lender, and is intended to
treat for Zoltek and the Lenders as a class and shall not in
any way be construed as the Lenders acting in concert or as
a group with respect to the purchase, disposition or voting
of Securities or otherwise.
6.4. Public Announcement. Zoltek shall, by 5:00 p.m. Eastern time
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on December 15, 2006, issue a press release disclosing the
material terms of the transactions contemplated hereby and
by 4:30 p.m. Eastern time on the second Business Day
following the date hereof, file a Current Report on Form
8-K, attaching such press release and the relevant
Transaction Documents thereto, each reasonably acceptable to
each Lender. Zoltek and each Lender shall consult with each
other in issuing any other press releases with respect to
the transactions contemplated hereby, and neither Zoltek nor
any Lender shall issue any such press release or otherwise
make any such public statement without the prior consent of
Zoltek, with respect to any press release of any Lender, or
without the prior consent of each Lender, with respect to
any press release of Zoltek, which consent shall not
unreasonably be withheld, except if such disclosure is
required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such
public statement or communication. Notwithstanding the
foregoing, Zoltek shall not publicly disclose the name of
any Lender, or include the name of any Lender in any filing
with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Lender,
except (i) as required by federal securities law in
connection with the registration statement contemplated by
the Registration Rights Agreement and (ii) to the extent
such disclosure is required by law or Trading Market
regulations, in which case Zoltek shall provide the Lenders
with prior notice of such disclosure permitted under
subclause (i) or (ii).
6.5. Notices. Any and all notices or other communications or
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deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective
as specified in the September Purchase Agreement. The
address for such notices and communications shall be as set
forth on the signature pages attached to the September
Purchase Agreement.
6.6. Amendments; Waivers. No provision of this Amendment may be
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waived or amended except in a written instrument signed, in
the case of an amendment, by Zoltek and each Lender or, in
the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this
Amendment shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any
right hereunder in any manner impair the exercise of any
such right.
6.7. Amendment Controls. If any topic is addressed in the
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September Purchase Agreement and the September Registration
Rights Agreement (or any document related thereto), on the
one hand, and in this Amendment, on the other hand, this
Amendment shall control.
6.8. Construction. The headings herein are for convenience only,
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do not constitute a part of this Amendment and shall not be
deemed to limit or affect any of the provisions hereof. The
language used in this Amendment will be deemed to be the
language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied
against any party.
6.9. Governing Law. All questions concerning the construction,
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validity, enforcement and interpretation of this Amendment
shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law
thereof. The parties agree that Section 8.8 of the September
Purchase Agreement shall apply to this Amendment as if set
forth in its entirety herein.
6.10. Survival. The representations and warranties contained
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herein shall survive the delivery, exercise and/or
conversion of the Securities, as applicable for the
applicable statue of limitations.
6.11. Execution. This Amendment may be executed in two or more
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counterparts, all of which when taken together shall be
considered one and the same document and shall become
effective when counterparts have been signed by each party
and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
6.12. Severability. If any provision of this Amendment is held to
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be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this
Amendment shall not in any way be affected or impaired
thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute
therefor, and upon so agreeing, shall incorporate such
substitute provision in this Amendment.
6.13. Independent Nature of Lenders' Obligations and Rights. The
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obligations of each Lender hereunder are several and not
joint with the obligations of any other
Lender, and no Lender shall be responsible in any way for
the performance of the obligations of any other Lender.
Nothing contained herein, and no action taken by any Lender
pursuant hereto, shall be deemed to constitute the Lenders
as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the
Lenders are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated
hereby. Each Lender shall be entitled to independently
protect and enforce its rights, including, without
limitation, the rights arising out of this Amendment and it
shall not be necessary for any other Lender to be joined as
an additional party in any proceeding for such purpose. The
Lenders have not relied upon the same legal counsel in their
review and negotiation of this Amendment. Zoltek has elected
to provide all Lenders with the same terms and form of
Amendment for the convenience of Zoltek and not because it
was required or requested to do so by the Lenders. Each
Lender represents that it has been represented by its own
separate legal counsel in its review and negotiations of
this Amendment and each party represents and confirms that
Malhotra & Associates LLP represents only Xxxxxxxx in
connection with this Amendment.
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized signatories as of the date
first indicated above.
XXXXXX COMPANIES, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASERS FOLLOWS]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
Name of Investing Entity: ______Omicron Master Trust
Signature of Authorized Signatory of Investing Entity: _________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Email Address of Authorized Entity:_____________________________________________
SCHEDULE A
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ADDITIONAL
WARRANTS
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Xxxxxxxx
Investment
Master Fund, Ltd 144,219
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Omicron Master
Trust 311,065
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Smithfield
Fiduciary LLC 124,168
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Iroquois Capital,
L.P. 82,779
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Cranshire Capital,
L.P. 82,779
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Midsummer
Investment Ltd. 82,779
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Total 827,789
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