DELAWARE | 001-33710 | 06-1393453 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
4567 TELEPHONE ROAD, SUITE 206 VENTURA, CALIFORNIA |
93003 |
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(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet
Arrangement of a Registrant. |
Item 3.02. | Unregistered Sales of Equity Securities. |
Item 8.01. | Other Events. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit Number | Description of Exhibits | |||
10.1 | Subordinated Convertible Notes Commitment Letter, dated
April 11, 2011, between Kanis S.A. and Clean Diesel
Technologies, Inc. |
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10.2 | Form of $3,000,000 promissory note, dated April 11, 2011
(included as Schedule B to Subordinated Convertible Notes
Commitment Letter filed as Exhibit 10.1 to this Current
Report on Form 8-K) |
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99.1 | Press release dated April 11, 2011 |
CLEAN DIESEL TECHNOLOGIES, INC. |
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April 13, 2011 | By: | /s/ Nikhil A. Mehta | ||
Name: | Nikhil A. Mehta | |||
Title: | Chief Financial Officer and Treasurer | |||
Commitment:
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Purchaser agrees to purchase from the Company at par,
in one or more tranches, US$3,000,000 aggregate
principal amount of Notes on or before May 10, 2011.
Purchaser acknowledges that this commitment (i) is
irrevocable, (ii) is conditioned upon acceptance by or
on behalf of the Company and may be accepted or
rejected in whole or in part by the Company in its sole
discretion and (iii) will expire if not accepted by the
Company on or prior to May 10, 2011. |
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Notes:
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The principal terms of the Notes are set forth on
Schedule A hereto. The form of promissory note
evidencing the Notes is set forth as Schedule B hereto. |
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Conversion Rights:
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Purchaser shall have the right, but not the obligation,
from time to time to convert the principal amount of
the Notes and any interest accrued thereon into shares
of the Companys common stock, par value $0.01 per
share (the Common Stock), provided that notice of any
such conversion shall be given to the Company not less
than 75 days prior to the date on which such shares of
Common Stock are to be issued. The initial conversion
price shall be $7.044, subject to adjustment for any
stock split, reverse stock split, reclassification,
recapitalization, consolidation, exchange or like
change with respect to the Companys Common Stock.
Notwithstanding the foregoing, the maximum number of
shares of Common Stock that
may be issuable upon conversion of the Notes shall be 369,853, subject to
adjustment for any stock split, reverse stock split, reclassification,
recapitalization, consolidation, exchange or like change with respect to the
Companys Common Stock. |
Purchaser Status:
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Purchaser represents that it is a Qualified
Investor within the meaning of Section 86 of the
Financial Services and Markets Act 2000 and an
investment professional within the meaning of
Article 19 of the FSMA 2000 (Financial Promotion)
Order 2005 and is not a U.S. Person within the
meaning of Rule 902 of Regulation S promulgated under
the Act. |
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Purchaser represents that it is the beneficial owner
398,722 shares of Common Stock and has the right to
acquire 25,000 additional shares of Common Stock,
which right does not mature until 2012. Purchaser
does not own, beneficially or otherwise, or have the
right to acquire any additional shares of Common
Stock. |
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Voting Rights:
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The Notes shall have no voting rights. The Common
Stock into which such Notes may be converted shall
have one vote per share in accordance with Delaware
law from and after the time that such shares of
Common Stock are issued and outstanding. |
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Resale Limitations:
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Purchaser agrees to not sell any Notes or any shares
of Common Stock issued upon conversion of the Notes
(the New Shares) for a period of not less than six
(6) months from the date of issuance by the Company
of the Notes or New Shares to Purchaser. Moreover,
the purchase and sale of the Notes and the New Shares
are subject to Regulation S promulgated under the Act
by the U.S. Securities and Exchange Commission and
relating to an available exemption from registration
for the sale of securities by U.S. companies in
offshore transactions. To that end Purchaser
represents, certifies and agrees that (i) it is not a
U.S. Person (within the meaning of Regulation S)
and is not acquiring the Notes or the New Shares for
the account or benefit of any U.S. Person, (ii)
Purchaser did not become aware of the Company or the
Notes or the Common Stock through any form of
directed selling efforts (as defined in Rule 902 of
Regulation S), and no general solicitation or general
advertising in violation of the Act has been or will
be used nor will any offers by means of any directed
selling efforts in the United States be made by
Purchaser or any of its representatives in connection
with the
offer and sale of any of the Notes or the New Shares, (iii) at the time of the
origination of contact concerning the transactions contemplated by this
Commitment Letter and on the date of execution and delivery of this Commitment
Letter by Purchaser, Purchaser was outside the United States, (iv) with respect
to the Notes and the New Shares, it shall comply with the Transfer Restrictions
set out on Schedule C attached to this Commitment Letter and made a part
hereof, (v) that such Transfer Restrictions shall be set out in the Notes (and
in a legend upon the New Shares), and (vi) that the Company will refuse (or
cause its transfer agent and registrar to refuse) transfer and registration of
any Notes (or New Shares issuable upon conversion of the Notes) transferred
other than in accordance with the Transfer Restrictions. |
2
Restricted Activities:
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Purchaser agrees that, for so long as this
Commitment Letter is in effect or any of the Notes
remain outstanding, it will not engage in any
short-selling or selling against the box with
respect to the Common Stock, or engage in any puts,
calls or other derivative or hedging activities
with respect to the Common Stock. |
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Funding:
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Purchaser shall deliver, in one or more tranches,
US$3,000,000 by wire transfer to the Companys
account, in U.S. Dollars, on or before May 10,
2010. |
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Law:
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This Commitment Letter and the purchase of the
Notes shall be governed by Delaware law and the
Notes shall be governed by California law, in each
case without reference to the conflicts of laws
rules of any jurisdiction. |
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Miscellaneous:
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This Commitment Letter is not assignable by
Purchaser without the consent of the Company. The
representations and warranties made by the
Purchaser in this Commitment Letter shall survive
the closing of the transactions contemplated
hereby. Schedule C is an integral part of this
Commitment Letter and shall be deemed incorporated
by reference herein. This Commitment Letter may be
executed in one or more counterparts, all of which
together shall constitute one instrument. When
executed by both the Purchaser and the Company,
this Commitment Letter shall be a legally valid and
binding obligation of Purchaser and the Company. |
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Signatures:
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This Commitment Letter has been executed and
delivered by the following authorized
representatives of the Purchaser and the Company. |
3
CLEAN DIESEL TECHNOLOGIES, INC. | KANIS, S.A. | |||||||||
By: | /s/ Nikhil A. Mehta | By: | /s/ John Kanis | |||||||
Name: | Nikhil A. Mehta | Name: | John Kanis | |||||||
Title: | Chief Financial Officer | Title: | Director | |||||||
Dated: April 11, 2011 | Dated: April 11, 2011 |
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Issuer:
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Clean Diesel Technologies, Inc., a corporation organized
under the laws of Delaware (the Company). |
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Securities Offered:
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US$3,000,000 aggregate principal amount of 8.0% Subordinated
Convertible Notes due 2016 (the Notes). |
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Issue Date:
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Not later than May 10, 2011 with respect to the Notes. |
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Interest:
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8.0% per annum, payable in cash on each interest payment date. |
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Interest Payment Dates:
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March 31, June 30, September 30 and December 31 of each year
beginning June 30, 2011. |
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Maturity Date:
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May 10, 2016 (the Maturity Date), unless earlier converted,
redeemed or repurchased. |
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Redemption Rights:
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At any time on or after November 11, 2012 (the Early
Redemption Date), and upon not less than 30 days prior
written notice, a holder may require the Company to purchase
all or a portion of its Notes at a purchase price in cash
equal to 100% of the principal amount of the Notes to be
purchased, plus any accrued but unpaid interest thereon, to
but excluding the purchase date. |
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Prepayment Rights:
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The Company shall have the right to prepay the Notes prior to
the Maturity Date, without penalty or premium, subject
however, to the holders prior rights of conversion. In the
event of a prepayment, holders shall have the right to elect
whether to (i) convert the Notes, plus accrued and unpaid
interest; (ii) accept prepayment; or (iii) a combination of
the two. |
A-1
Unsecured:
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The Notes shall be unsecured obligations of the Company. |
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Subordination:
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The Companys repayment obligations under the Notes shall be
subordinate in right of payment to current and any future
secured debt of the Company. |
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Conversion Rights:
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So long as it has provided 75 days prior written notice to
the Company, and subject to the conversion limitation below,
a holder may convert the Notes, including any accrued and
unpaid interest thereon, at any time on or prior to the close
of business on the business day immediately preceding the
Maturity Date, into shares of the Companys common stock, par
value $.01 per share (the Common Stock) at the Conversion
Price per share. All accrued and unpaid interest shall be
included in the conversion calculation. The Conversion Price
shall be subject to adjustment as provided under the caption
Conversion Adjustments below. |
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Limitation on
Conversion:
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The maximum number of shares of Common Stock that may be
issuable upon conversion of the Notes shall be 369,853,
subject to adjustment as provided under the caption
Conversion Adjustments below. For avoidance of doubt, no
shares of Common Stock may be issued with respect to the
Notes, whether as an in kind payment of interest or
otherwise, except upon conversion as described herein and
subject to the limitation set forth in the preceding
sentence. |
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Conversion Price:
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120% of the consolidated closing bid price per share of
Common Stock immediately preceding the execution of this
Commitment letter by Purchaser (the Conversion Price). |
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Conversion Adjustments:
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The Conversion Price and the maximum number of shares of
Common Stock that may be issuable upon conversion of the
Notes will be subject to adjustment for any stock split,
reverse stock split, reclassification, recapitalization,
consolidation, exchange or like change with respect to the
Companys Common Stock. |
A-2
Use of Proceeds:
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The proceeds from issuance of the Notes shall be used for
general working capital purposes. |
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Transfer Restrictions:
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None of the Notes or the Common Stock issuable upon
conversion of the Notes have been registered under the
Securities Act of 1933, as amended (the Securities Act) or
any other federal or state securities laws and these
securities may not be offered for sale or resold or otherwise
transferred unless they are registered under the Securities
Act or an applicable exemption from registration is
available. |
A-3
Principal Amount US$3,000,000.00 | Ventura, California | |
[______], 2011 |
B-1
B-2
Dated: [_____], 2011 | Maker: | |||||||||
CLEAN DIESEL TECHNOLOGIES, INC. | ||||||||||
By: | ||||||||||
Name: | Nikhil A. Mehta | |||||||||
Title: | Chief Financial Officer |
B-3
A. | It is acquiring the Note Securities for its own account or an account with respect to which
it exercises sole investment discretion and that it and any such account or person is not a
U.S. Person, and it is aware that the acquisition of Note Securities is being made in reliance
on Regulation S under the Securities Act. |
B. | It acknowledges that the Note Securities have not been registered under the Securities Act
and may not be offered or sold except as provided below. |
C. | It understands and agrees: |
1. | that the Note Securities are being offered only outside the United States to
non-U.S. Persons in an offshore transaction in reliance upon Regulation S under the
Securities Act; and |
2. | that it shall not offer, sell, pledge or otherwise transfer any Note Security
within six (6) months after the date of original issuance of such Note Security or, in
the case of an affiliate (as defined in Rule 144 promulgated under the Securities Act) of
the Company, at any time until the later of (i) one (1) year after the date of original
issuance of such Note Security and (ii) three months after it ceases to be an affiliate
of the Company, other than (in each case as indicated and certified by the transferor): |
(a) | to the Company; |
(b) | pursuant to an effective registration statement under the Securities Act
and in accordance with any applicable securities laws of any state of the United
States; |
(c) | in an offshore transaction in accordance with Regulation S under the
Securities Act; |
C-1
(d) | pursuant to an exemption from the registration requirements of the
Securities Act; or |
(e) | in a transaction that does not require registration under the Securities
Act but is in accordance with applicable state securities laws and in relation to
which the transferor has furnished to the Company an opinion to such effect from
counsel of recognized standing in form and substance satisfactory to the Company
prior to such offer, sale, pledge or transfer. |
D. | It understands that in any resale and transfer of Note Securities it will, and each
subsequent holder thereof is required to, notify any purchaser of Note Securities of the
resale restrictions referred to above, if then applicable. This notification requirement will
be satisfied by virtue of the fact that the following legend will be placed on the Notes and
on any shares of Common Stock issued upon conversion of the Notes, unless otherwise agreed to
by the Company: |
E. | It acknowledges that the foregoing restrictions apply to holders of beneficial interests in
the Note Securities as well as to holders of Note Securities. |
F. | It acknowledges that it shall not engage in any hedging transactions involving the Note
Securities unless in compliance with the Securities Act. |
G. | It is a Qualified Investor within the meaning of Section 86 of the Financial Services and
Markets Act 2000 and an investment professional within the meaning of Article 19 of the FSMA
2000 (Financial Promotion) Order 2005. |
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