Supplemental Agreement
Amendment No. 3 to Securities Purchase Agreement
Supplemental Agreement dated and effective as of November 1, 2001, among China
Development Industrial Bank Inc. (the "Seller"), the investors signatory hereto
(individually, a "Purchaser" and, collectively, the "Purchasers"), and Xxxxx &
XxXxxxxx (the Seller, Purchasers and Xxxxx & XxXxxxxx are, collectively, the
"Parties").
Whereas pursuant to the Securities Purchase Agreement among the Parties dated
September 7, 2001 (the "Purchase Agreement"), and Supplemental Agreement,
Amendment No. 1 to Securities Purchase Agreement, dated September 27, 2001
("Amendment No. 1"), and Supplemental Agreement, Amendment No. 2 to Securities
Purchase Agreement, dated October 4, 2001 ("Amendment No. 2"), the Seller agreed
to sell to the Purchasers and the Purchasers severally agreed to purchase from
the Seller the Shares (as defined in the Purchase Agreement), subject to the
terms of the Agreement. The Purchase Agreement, as amended by Amendment No. 1
and Amendment No. 2 is hereinafter, the "Agreement."
Whereas the Parties now desire to amend certain provisions of the Agreement.
Now, Therefore, in consideration of mutual covenants and agreements set forth
below, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Capitalized terms not defined herein shall have their meanings set
forth in the Agreement.
1. Unless otherwise expressly amended herein, terms, conditions and
provisions of the Agreement shall remain in full force and effect.
1. The definition of "Second Tranche Per Share Purchase Price" in Section
1.1 of the Purchase Agreement shall be deleted in its entirety and
replaced with the following:
"Second Tranche Per Share Purchase Price" means the lower of (a) 91% of
the average Closing Prices during the seventeen Trading Days following
(but not including) the Second Tranche Closing Date and (b) 95% of the
Closing Price of the seventeenth Trading Day following (but not
including) the Second Tranche Closing Date."
1. Section 2.3(b) of the Agreement shall be deleted in its entirety and
replaced with the following:
"(b) Not later than 5:30 p.m. (New York time) on November 2,
2001, each Purchaser shall deliver a written notice ("Second Tranche
Purchase Notice") via facsimile to the Seller specifying the number of
Shares to be purchased by such Purchaser on the Second Tranche
Settlement Date (as defined below), which notice (1) will specify a
minimum number of Shares equal to the product of (x) 650,000 multiplied
by (y) such Purchaser's First Tranche Percentage and (2) may not
specify a number of Shares greater than the product of (x) 1,000,000
multiplied by (y) such Purchaser's First Tranche Percentage. The Shares
indicated on all Second Tranche Purchase Notices are referred to as the
"Second Tranche Shares".
1. Section 2.3(d) of the Agreement, as amended, shall be deleted in its
entirety and any reference thereto in the Agreement shall be
disregarded.
1. Sections 2.4(a) and (b) of the Purchase Agreement shall be deleted in
their entirety and replaced with the following:
"(a) On the Third Tranche Closing Date, each Purchaser shall
deposit with the Money Escrow Agent for future return or disbursement
in accordance with this Section 2.4, an aggregate amount in United
States dollars equal to the product of 50% of (x) the product of (1)
the sum of (A) 500,000 and (B) the lesser of (i) 100,000 and (ii) the
difference between 1,000,000 and the number of Second Tranche Shares
purchased by such Purchaser pursuant to Section 2.3(b), multiplied by
(2) such Purchaser's First Tranche Percentage multiplied by (y) the
Closing Price on the Trading Day immediately preceding the Third
Tranche Closing Date.
(b) Not later than the 17th Trading Day immediately following
(but not including) the Third Tranche Closing Date, each Purchaser
shall deliver a written notice ("Third Tranche Purchase Notice") via
facsimile to the Seller specifying the number of Shares to be purchased
by such Purchaser on the Third Tranche Settlement Date (as defined
below), which notice: (1) will specify a minimum number of Shares equal
to the sum of (x) 500,000 multiplied by such Purchaser's First Tranche
Percentage and (y) the lesser of (i) 100,000 multiplied by such
Purchaser's First Tranche Percentage and (ii) the difference between
(A)1,000,000 multiplied by such Purchaser's First Tranche Percentage
and (B) the number of Second Tranche Shares purchased by such Purchaser
pursuant to Section 2.3(b) hereof and (2) may not specify a number of
Shares greater than the sum of (x) the aggregate amount of Shares which
can be purchased pursuant to the immediately preceding Subsection
2.4(b)(1) and (y) 1,000,000 less the sum of (i) the number of Second
Tranche Shares purchased by such Purchaser pursuant to Section 2.3(b)
and (ii) 100,000. The Shares indicated on all Third Tranche Purchase
Notices or the notices delivered by the Purchasers under Section
2.4(d), as applicable, are collectively referred to as the "Third
Tranche Shares"."
1. The introductory paragraph of Section 2.4(d) of the Purchase Agreement
shall be deleted in its entirety and replaced with the following:
"If the average of the Closing Prices during the seventeen Trading Days
immediately following (but not including) the Third Tranche Closing
Date (the "Third Tranche Pricing Period") is greater than the Ceiling
Price or less than the Floor Price, then each Purchaser shall have the
right (but not the obligation) to purchase up to a number of Third
Tranche Shares equal to the product of (1) the maximum number of Third
Tranche Shares which such Purchaser may purchase pursuant to Section
2.4(b) multiplied by (2) such Purchaser's First Tranche Percentage at a
purchase price per Share equal to the Third Tranche Per Share Purchase
Price. To exercise this right, a Purchaser will deliver to the Seller,
via facsimile no later than the first Trading Day after the Third
Tranche Pricing Period, a notice specifying the number of Third Tranche
Shares to be purchased by such Purchaser under this Section 2.4(d)."
* * * *
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IN WITNESS WHEREOF, the Parties hereto have caused this Supplemental Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
CHINA DEVELOPMENT INDUSTRIAL BANK INC.
By: /s/ Xxxx Xxx
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Xxxx Xxx
Senior Executive Vice President
PINE RIDGE FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Attorney-in-Fact
VERTICAL VENTURES LLC
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
Manager
XXXXX & XXXXXXXX
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Associate Partner
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