SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
(Name of Issuer)
Common Stock, par value $0.001 per share
(Title of Class of Securities)
75845J109
Robert M. Worsley
3418 N. Val Vista Drive
Mesa, Arizona 85213
(480) 218-8880
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 13, 2008
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this schedule
because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.
o
Note
: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See §240.13d-7 for other parties to
whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting persons
initial filing on this form with respect to the subject class of securities, and for
any subsequent amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to
be filed for the purpose of Section 18 of the Securities Exchange Act of 1934
(Act) or otherwise subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the Notes).
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1
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NAMES OF REPORTING PERSON:
(1)
Robert M. Worsley
Christi M. Worsley
Robert M. Worsley and Christi M. Worsley Revocable Trust
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a)
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(b)
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS (SEE INSTRUCTIONS)
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PF
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5
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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Arizona
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7
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SOLE VOTING POWER
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NUMBER OF
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714
(2)
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SHARES
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8
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SHARED VOTING POWER
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BENEFICIALLY
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OWNED BY
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4,377,498
(3)(6)
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EACH
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9
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SOLE DISPOSITIVE POWER
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REPORTING
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PERSON
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714
(2)
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WITH
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10
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SHARED DISPOSITIVE POWER
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4,377,498
(3)(6)
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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4,378,212
(2)(3)(4)(6)
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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62.25% of Common Stock
(5)
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14
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
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HC
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(1)
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This is a joint filing by Robert M. Worsley, Christi M. Worsley and the Robert M. Worsley and Christie
M. Worsley Revocable Trust (the
Trust
). Robert M. Worsley and Christi M. Worsley established the Trust and are the sole trustees of the Trust.
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(2)
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Robert M. Worsley individually owns options to acquire 714 shares of Common Stock of the Issuer which options are exercisable within 60 days of the date of this Schedule 13D. Does not include 59,400 shares of Common Stock issuable pursuant to options held individually by Mr. Worsley which are not exercisable within 60 days of the date of this Schedule 13D.
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(3)
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The Trust owns 3,553,157 shares of Common Stock of the Issuer and warrants, which are
exercisable within 60 days of the date of this Schedule 13D, to purchase 824,341 shares of
Common Stock of the Issuer. Does not include 1,648,682 shares issuable pursuant to warrants
held by the Trust that are not exercisable within 60 days of the date of this Schedule 13D.
Robert M. Worsley and Christi M. Worsley are the sole trustees of the Trust with voting and
dispositive power of the Common Stock held by the Trust.
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(4)
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The Trust and Christi M. Worsley disclaim beneficial ownership of the 60,114 shares of Common
Stock issuable pursuant to options owned individually by Robert Worsley as described in
footnote 2.
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(5)
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Based on 6,207,812 shares of Common Stock of the Issuer outstanding as of August 9, 2008 as
reported by the Issuer to the Reporting Persons. The 3,553,157 shares of Common Stock held by
the Trust represents approximately 57.2% of such 6,207,812 shares of Common Stock. The
3,553,157 shares of Common Stock plus the 825,055 shares of Common Stock currently issuable
pursuant to the vested warrants held by the Trust and the vested options held by Mr. Worsley
represent (assuming the issuance of the shares of Common Stock pursuant to such warrants and
options) approximately 62.25% of the Common Stock of the Issuer outstanding as of August 9,
2008.
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(6)
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Does not include shares of Common Stock of the Issuer that may be issued to the Trust upon
conversion of a $1.0 million convertible subordinated promissory note currently held by the
Trust or additional convertible notes that may be issued to the Trust in an aggregate
principal amount of up to $4.0 million pursuant to a letter agreement with the Issuer, as
described in more detail in Item 6 herein. The Reporting Persons disclaim beneficial
ownership of such shares.
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SCHEDULE 13D
Item 1. SECURITY AND ISSUER
This Amendment No. 2 amends the Statement of Beneficial Ownership on Schedule 13D filed with
the Securities and Exchange Commission on October 2, 2007 (as amended, this
Schedule 13D
)
and relates to the common stock, par value $0.001 per share (the
Common Stock
), of Renegy
Holdings, Inc. (the
Issuer
), having its principal executive offices at 60 E. Rio Salado
Parkway, Suite 1012, Tempe, Arizona 85281.
Item 2. IDENTITY AND BACKGROUND
This Schedule 13D is filed by Robert M. Worsley (
R. Worsley
), Christi M. Worsley
(
C. Worsley
) and the Robert M. Worsley and Christi M. Worsley Revocable Trust, a trust
organized under the laws of the State of Arizona (the
Trust
and, together with R. Worsley
and C. Worsley, the
Reporting Persons
). The Trust is a revocable trust established by R.
Worsley and C. Worsley, and R. Worsley and C. Worsley are the trustees of such Trust.
During the last five years, none of the Reporting Persons have been convicted in any criminal
proceeding and none were a party to any civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding
any violations with respect to such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On October 1, 2007, the Trust received 3,774,048 shares of Common Stock (the
Contribution
Shares
) from the Issuer in exchange for the Trusts contribution of all of the membership
interests of Renegy, LLC (
Renegy
), Renegy Trucking, LLC (
Renegy Trucking
) and
Snowflake White Mountain Power, LLC (
SWMP
), each an Arizona limited liability company.
The Trust contributed such membership interests to the Issuer in connection with a contribution and
merger transaction effected on October 1, 2007 among Catalytica Energy Systems, Inc., a Delaware
corporation (
Catalytica
), the Issuer, Snowflake Acquisition Corporation, a Delaware
corporation, Renegy, Renegy Trucking, SWMP, and the Reporting Persons (the
Merger
Transaction
). In connection with the Merger Transaction, the Trust also received a warrant on
the same date to purchase 2,473,023 shares of Common Stock at an exercise price of $16.38 (the
Warrant
), the terms of which are described in Item 6 of this Schedule 13D. In accordance
with the terms of the Contribution and Merger Agreement (as defined in Item 6 of this Schedule
13D), the number of Contribution Shares issued in the Merger Transaction were subsequently reduced
by 220,891 shares to 3,553,157 shares as a result of the sale of certain wholly owned subsidiaries
of the Issuer on November 7, 2007 for a sale price exceeding an amount specified in the
Contribution and Merger Agreement. On June 10, 2008, warrants to purchase 824,341 shares of Common
Stock pursuant to the Warrant vested.
In connection with the Merger Transaction, on October 1, 2007 R. Worsley also received options
to purchase 714 shares of Common Stock at an exercise price of $9.45 per share in exchange for
options held by R. Worsley to purchase shares of common stock of Catalytica, which options were
issued to R. Worsley by Catalytica on November 6, 2006 for certain consulting services.
On January 22, 2008, R. Worsley received options to purchase 59,400 shares of Common Stock in
accordance with the terms of R. Worsleys employment agreement with the Issuer. The options become
exercisable in 48 equal monthly installments commencing one month after the date of grant. The
exercise of the options is subject to the approval of the Issuers 2007 Equity Incentive Plan by
the Issuers stockholders. In the event such approval is not obtained, the options will be
cancelled.
On August 13, 2008, the Issuer issued a $1.0 million convertible subordinated promissory note
to the Trust in exchange for funds previously received by the Issuer from the Reporting Persons to
cover
potential Project Cost (as defined in Item 6 hereof) overruns. The note is convertible into
shares of Common Stock. In addition, on such date the Reporting Persons agreed to use commercially
reasonable efforts to loan the Issuer, at the Issuers option, up to an additional $4.0 million,
which debt, if issued, will be convertible into shares of Common Stock under the same terms as the
$1.0 million note. The foregoing is described in more detail under the captions Second Letter
Agreement and Convertible Subordinated Promissory Note in Item 6 hereof.
Item 4. PURPOSE OF TRANSACTION
The Reporting Persons entered into the Merger Transaction to combine the businesses of Renegy,
Renegy Trucking and SWMP, which were wholly owned by the Reporting Persons, with the business of
Catalytica. Renegy, Renegy Trucking and SWMP engage in the businesses of creating and operating
renewable energy power projects and harvesting biomass fuel. At the time of the Merger
Transaction, Catalytica provided innovative products and services to meet the demand for clean
energy production, with a focus on cost-effective emissions control solutions for the coal-fired
power generation industry. On November 7, 2007, the Issuer sold Catalyticas operating
subsidiaries as described in more detail under Item 6 hereof.
The Issuer issued the Note (as defined in Item 6) to the Trust, and the Reporting Persons
agreed to use commercially reasonable efforts to loan up to an additional $4.0 million to the
Issuer, at the option of the Issuer, in exchange for one or more additional convertible notes in
order to provide additional liquidity for the Issuer for working capital and general corporate
purposes, as described in more detail under Item 6.
Item 5. INTERESTS IN SECURITIES OF THE ISSUER
As of the date of this Schedule 13D, the Reporting Persons beneficially own 4,378,212 shares
of Common Stock in the aggregate, which includes (i) 3,553,157 shares of Common Stock issued to the
Trust in connection with the Merger Transaction, (ii) 824,341 shares of Common Stock currently
issuable to the Trust pursuant to the portion of the Warrant that has vested, and (iii) 714 shares
of Common Stock issuable pursuant to options held by R. Worsley individually that are vested as of
the date of this Schedule 13D. The 4,378,212 shares represent approximately 62.25% of the shares
of Common Stock outstanding, assuming the issuance of the 825,055 shares of Common Stock upon
exercise of the vested warrant shares and the vested options held by R. Worsley as the date of this
Schedule 13D and based on 6,207,812 shares of Common Stock reported by the Issuer to the Reporting
Persons to be outstanding as of August 9, 2008.
R. Worsley and C. Worsley share sole voting and investment power over 3,553,157 shares of
Common Stock held by the Trust and, upon exercise of all or a portion of the Warrant, will share
sole voting and investment power over the shares of Common Stock issuable to the Trust pursuant to
the Warrant. Currently, 824,341 warrant shares under the Warrant have vested. R. Worsley has sole
voting and investment power over 714 shares of Common Stock issuable pursuant to vested options
held by him individually. The Trust and C. Worsley disclaim beneficial ownership of the 60,114
shares of Common Stock issuable pursuant to the options owned individually by R. Worsley as
described in Item 3 hereof.
The Trust currently holds a $1.0 million convertible subordinated promissory note issued by
the Issuer, and the Reporting Persons have agreed to use commercially reasonable efforts to loan up
to an additional $4.0 million to the Issuer, at the option of the Issuer, in exchange for
additional convertible notes. The $1.0 million convertible note is convertible, and the additional
notes issued under the $4.0 million loan arrangement, if any, will be convertible, into shares of
Common Stock upon the occurrence of certain events and subject to certain conditions as described
under Item 6 hereof; however, the number of shares that may be issued upon conversion are
indeterminable as of the date hereof. The Reporting Persons disclaim beneficial ownership of
shares of Common Stock that may be issuable upon conversion of such notes. In the event shares of
Common Stock are issued to the Trust upon conversion of the notes
described herein, R. Worsley and C. Worsley will share sole voting and investment power over
such shares.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF
THE
ISSUER
R. Worsley and his spouse, C. Worsley, established the Trust and are the sole trustees of the
Trust.
Contribution and Merger Agreement
The Reporting Persons are parties to a Contribution and Merger Agreement with Catalytica, the
Issuer, Snowflake Acquisition Corporation, a Delaware corporation, Renegy, Renegy Trucking and
SWMP, dated May 8, 2007, as amended (the
Contribution and Merger Agreement
), pursuant to
which the Issuer agreed to grant 3,774,048 shares of Common Stock (prior to adjustment pursuant to
the Share Ownership Reconciliation Agreement as described below) and a Warrant to purchase
2,473,023 shares Common Stock to the Trust in exchange for all of the membership interests of
Renegy, Renegy Trucking and SWMP. In addition to the rights of the parties set forth in the
Registration Rights Agreement and Warrant described below, the parties are subject to certain
restrictions and obligations with respect to the transfer and voting of shares of Common Stock, as
more fully described in the Contribution and Merger Agreement, including the amendments thereto,
copies of which are attached hereto as Exhibits 1, 2 and 3 and which are incorporated herein by
reference. In addition, pursuant to the Contribution and Merger Agreement, the Reporting Persons
and the Issuer have certain indemnification obligations with respect to their respective
representations, warranties, covenants and agreements made therein. Such indemnification
obligations of the parties will survive until April 1, 2009, except for any indemnification claim
resulting from fraud or intentional misrepresentation. The indemnification obligations of the
Reporting Persons and the Issuer may be satisfied in cash or shares of Common Stock, as more
particularly described in the Contribution and Merger Agreement.
SCR-Tech Sale and Share Ownership Reconciliation Agreement
As described elsewhere in this Schedule 13D, the Contribution and Merger Agreement provided
that the number of Contribution Shares issued to the Trust in connection with the Merger
Transaction were to be reduced in the event of the subsequent sale of certain wholly owned
subsidiaries of the Issuer, including SCR-Tech, LLC, CESI-Tech Technologies, Inc. and CESI-SCR,
Inc. (collectively,
SCR-Tech
), for a sale price exceeding an amount specified in the
Contribution and Merger Agreement. On November 7, 2007, SCR-Tech was sold for a sale price in
excess of such specified amount. On February 12, 2008, the Issuer and the Trust entered into a
SCR-Tech Sale and Share Ownership Reconciliation Agreement (the
Share Ownership Reconciliation
Agreement
) pursuant to which the parties agreed that the number of Contribution Shares was to
be reduced by 220,891 shares from 3,774,048 shares to 3,553,157 shares as a result of the sale of
SCR-Tech in accordance with the terms of the Contribution and Merger Agreement.
A copy of the Share Ownership Reconciliation Agreement is filed as Exhibit 6 hereto and is
incorporated herein by reference.
Registration Rights Agreement
The Trust is party to a Registration Rights Agreement, dated October 1, 2007 (the
Registration Rights Agreement
), with the Issuer pursuant to which the Issuer has agreed
to prepare and file a registration statement pursuant to Rule 415 under the Securities Act of 1933
covering the resale from time to time of all of the shares of Common Stock issued to the Trust in
connection with the Merger Transaction, as well as all shares of Common Stock issuable upon
exercise of the Warrant issued to the Trust in connection with the Merger Transaction, as described
below. The Issuer must prepare and file such registration statement upon the request of the Trust
(or the then holder of a majority of the
registrable securities subject to the Registration Rights Agreement), which request may be
made any time from and after 270 days after the October 1, 2007 closing of the Merger Transaction,
provided that the Issuer may delay any requested registration for up to 60 consecutive days in any
calendar year (or 120 days in the aggregate in any calendar year) if and for so long as certain
conditions exist. Additionally, the Issuer will not be obligated to effectuate more than one
registration in any twelve-month period, and there are certain proscriptions with respect to when a
request for registration may be made. Upon the effectiveness of the resale registration statement,
the registered shares of Common Stock will be freely tradable by the Trust. The Issuer will be
responsible for all fees and expenses in connection with the preparation and filing of a
registration statement under the Registration Rights Agreement.
A copy of the Registration Rights Agreement is filed as Exhibit 4 hereto and is incorporated
herein by reference.
Warrant
Pursuant to the Contribution and Merger Agreement, the Issuer issued 2,473,023 Common Stock
purchase warrants to the Trust. Each warrant entitles the Trust the right to purchase one share of
Common Stock. The exercise price of the warrants is $16.38 per share, provided that the warrants
exercise price may be adjusted pursuant to standard adjustment provisions for stock splits,
distributions, reorganizations, mergers and consolidations and the like. The warrants are
transferable by the Trust or any subsequent permitted transferee only to the warrant holders
spouse, the ancestors or descendants of the warrant holder or his spouse, or any ancestor or
descendant of any such ancestors or descendants, or any trust for the benefit of any of the
foregoing persons. The warrants will vest, if at all, in three equal tranches of 824,341 shares
each, upon the completion of each of three operating milestones. The warrants will be exercisable
beginning on the dates that the specified milestones are achieved and, with respect to each tranche
of the warrants that vest in accordance with a particular milestone, will expire upon the date that
is the later of the four-year anniversary of the date of issuance of the warrants and the two-year
anniversary of the date on which the particular milestone applicable to such tranche of the
warrants is achieved; provided, that in no event will the warrants expire later than the six-year
anniversary of the date of issuance of the warrants. The first operating milestone, the
achievement of commercial operation of the Plant (as defined below under the caption Overrun
Guaranty) by July 1, 2008, was achieved on June 10, 2008, and the first tranche of 824,341 shares
vested and became exercisable on that date.
The holder of a warrant may pay the exercise price in cash. In lieu of exercising the
warrants for cash, if at any time more than 240 days from the date of issuance of the warrants the
holder is not able to sell the shares underlying the warrants pursuant to an effective registration
statement filed by the Issuer under the Registration Rights Agreement described above, such
warrants may be exercised by net cashless exercise.
A copy of the Warrant issued to the Trust is filed as Exhibit 5 hereto and is incorporated
herein by reference.
Overrun Guaranty
Pursuant to an Overrun Guaranty, dated May 8, 2007 (the
Overrun Guaranty
), entered
into in connection with the Contribution and Merger Agreement, the Reporting Persons agreed to pay
to the Issuer the amount by which project costs (
Project Costs
) related to the
construction and commissioning of the Issuers biomass power plant in Snowflake, Arizona (the
Plant
) exceed the sum of the Project Cost budget of approximately $67.3 million and $2.0
million in sufficient time for the Issuer to pay such excess Project Costs. The Overrun Guaranty
was subsequently amended pursuant to the terms of the First Letter Agreement and Second Letter
Agreement, each described below.
A copy of the Overrun Guaranty is filed as Exhibit 7 hereto and is incorporated herein by
reference.
First Letter Agreement
On February 12, 2008, the Reporting Persons and the Issuer entered into a letter agreement
(the
First Letter Agreement
) which set forth the parties responsibilities to pay for
Project Costs. Pursuant to the Contribution and Merger Agreement and the Overrun Guaranty, the
Issuer had previously agreed to pay up to $2.0 million of Project Costs that exceed the $67,310,572
Project Cost budget for the Plant, and the Reporting Persons agreed to pay all additional excess
Project Costs. Pursuant to the First Letter Agreement, the parties agreed that, notwithstanding
the provisions of the Contribution and Merger Agreement and the Overrun Guaranty, the Issuer would
be responsible for the payment of an additional $6.0 million of capital costs related to the Plant
(in addition to the $2.0 million of Project Costs), and the Reporting Persons would be responsible
for payment of all other Project Costs. The First Letter Agreement required the Reporting Persons
to deposit a minimum of $5.0 million in cash in the Issuers general operating bank account by
March 5, 2008, which deposit was timely made by the Reporting Persons, to be applied against the
Reporting Persons obligations to pay for Project Costs as described above. To provide additional
liquidity for the Issuer for working capital and general corporate purposes, the Reporting Persons
also agreed to personally guarantee a line of credit for an amount up to $6.0 million to be
established for the Issuer at a bank or other financial institution reasonably acceptable to the
Issuer. In addition, the Reporting Persons agreed to provide a $6.0 million line of credit to the
Issuer on or before March 31, 2008 until such time as the Issuer was able to establish a line of
credit with a financial institution or arrange for alternative financing. On March 28, 2008, the
Issuer obtained a $6.2 million credit facility from Comerica Bank. As a result, the Reporting
Persons obligation to provide a $6.0 million line of credit has been released.
A copy of the First Letter Agreement is filed as Exhibit 8 hereto and is incorporated herein
by reference.
Second Letter Agreement
On August 13, 2008, the Reporting Persons and the Issuer entered into a second letter
agreement (the
Second Letter Agreement
) to finalize all amounts owed by the Reporting
Persons to the Issuer for Project Costs. Pursuant to the Second Letter Agreement, the parties
agreed that, notwithstanding the provisions of the Contribution and Merger Agreement, the Overrun
Guaranty and the First Letter Agreement, the Reporting Persons obligations to pay for unpaid
Project Cost overruns incurred prior to the commencement of commercial operations of the Plant on
June 10, 2008 would be satisfied by (i) the $5.0 million cash deposit previously made by the
Reporting Persons to the Issuer (as described above under the caption First Letter Agreement) and
(ii) funding by the Reporting Persons, through the direct deposit of funds or a letter of credit,
of the debt service reserve (as defined in the Issuers credit agreement with its project lender
for the Plant, CoBank, ACB, the DSR) of approximately $2.8 million beginning at the time the
Issuers construction loans with CoBank relating to the Plant convert into term loans, which, as of
the date of this Schedule 13D, the Issuer expects to occur on or before September 30, 2008. The
Second Letter Agreement provides that the Reporting Persons will be released from their obligation
with respect to the DSR to the extent the Plant operates in excess of certain output parameters.
Specifically, the Reporting Persons obligation to fund the DSR will be reduced monthly in an
amount equal to 70% of the revenue on a daily output in excess of 576 megawatt-hours. In addition,
the parties agreed that previous deposits by the Reporting Persons with the Issuer in the aggregate
amount of $1.0 million for purposes of paying potential Project Cost overruns will be treated as
loan proceeds in exchange for the issuance of $1.0 million in convertible debt to the Trust, as
evidenced by a Convertible Subordinated Promissory Note issued by the Issuer to the Trust on August
13, 2008 (the
Note
), which Note is described in more detail below under the caption
Convertible Subordinated Promissory Note. The Second Letter Agreement also requires the
Reporting Persons to use commercially reasonable efforts to loan the Issuer up to $4.0 million, at
the option of the Issuer, any time during the period commencing October 1, 2008 through the earlier
of (a) December 31, 2009 or (b) the date upon which the Issuer completes an Equity Funding Event
(as defined below under the caption
Convertible Subordinated Promissory Note), under the same terms as the convertible debt
represented by the Note, to fund the Issuers operations for the remainder of 2008. Pursuant to
the Second Letter Agreement, the Issuer also agreed and acknowledged that 824,341 of the shares
issuable under the Warrant vested as of June 10, 2008 as a result of the achievement of commercial
operation of the Plant. The Second Letter Agreement constitutes an amendment to the Contribution
and Merger Agreement, the Overrun Guaranty and the First Letter Agreement.
A copy of the Second Letter Agreement is filed as Exhibit 9 hereto and is incorporated herein
by reference.
Convertible Subordinated Promissory Note
On August 13, 2008, the Issuer issued a Convertible Subordinated Promissory Note (the
Note
) to the Trust in the principal amount of $1.0 million in exchange for cash advances
made by the Reporting Persons to the Issuer in the amounts of $600,000 and $400,000 on June 30,
2008 and July 7, 2008, respectively. The Note is subordinate to all other secured debt of the
Issuer and accrues interest at a rate of 10% per annum. The principal and accrued interest under
the Note are due and payable by the Issuer on December 31, 2009. The Note will automatically
convert if, prior to December 31, 2009, the Issuer obtains at least $5.0 million of equity
financing pursuant to the issuance of equity securities of the Issuer in a private placement to one
or more bona fide third party investors (an
Equity Funding Event
). Upon completion of an
Equity Funding Event, the entire principal amount of the convertible debt represented by the Note,
together with accrued interest thereon, will be automatically converted as part of such financing
into the same type of equity securities issued in the Equity Funding Event and at the same purchase
price for such equity securities. Commencing December 31, 2008, the Trust will have the right to
convert the outstanding principal and accrued interest under the Note, in whole but not in part,
into Common Stock at a per share conversion price equal to the closing price of the Common Stock as
quoted on the Nasdaq Capital Market (or such other national securities exchange or other quotation
medium that publishes quotes of the Common Stock) on the date prior to the date of the Trusts
notice of conversion to the Issuer. The Note provides that any conversion of the Note would be
subject at all times to the applicable Marketplace Rules of the Nasdaq Stock Market, LLC regarding
stockholder approval (for so long as the Issuers securities are subject to such rules). Upon prior
written notice to the Trust, the Issuer may at any time prepay in whole or in part the principal of
the Note, plus interest accrued to the date of such payment.
A copy of the Note is filed as Exhibit 10 hereto and is incorporated herein by reference.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
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Exhibit
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Description
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1
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Contribution and Merger Agreement, dated as of May 8, 2007,
incorporated by reference to Exhibit 2.1 to the Issuers
registration statement on Form S-4, filed on August 31, 2007.
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2
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Amendment No. 1 to Contribution and Merger Agreement, dated as of
August 9, 2007, incorporated by reference to Exhibit 2.2 to the
Issuers registration statement on Form S-4, filed on August 31,
2007.
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3
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Amendment No. 2 to Contribution and Merger Agreement, dated as of
September 20, 2007, incorporated by reference to Exhibit 2.1 to
the Issuers Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 21, 2007.
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4
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Registration Rights Agreement, dated as of October 1, 2007,
incorporated by reference to Exhibit 4.1 to the Issuers Current
Report on Form 8-K filed with the Securities and Exchange
Commission on October 1, 2007.
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5
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Warrant, dated as of October 1, 2007, incorporated by reference to
Exhibit 4.2 to the Issuers Current Report on Form 8-K filed with
the Securities and Exchange Commission on October 1, 2007.
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6
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SCR-Tech Sale and Share Ownership Reconciliation Agreement, dated
February 12, 2008, incorporated by reference to Exhibit 10.3 to
the Issuers Current Report on Form 8-K filed with the Securities
and Exchange Commission on February 13, 2008.
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7
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Overrun Guaranty, dated as of October 1, 2007, incorporated by
reference to exhibits to the Issuers Registration Statement on
Form S-4 (file No. 333-144110) filed with the Securities and
Exchange Commission on June 28, 2007.
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8
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First Letter Agreement, dated February 12, 2008, incorporated by
reference to Exhibit 10.1 to the Issuers Current Report on Form
8-K filed with the Securities and Exchange Commission on February
13, 2008.
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9
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Second Letter Agreement, dated August 13, 2008, incorporated by
reference to Exhibit 10.3 to the Issuers Quarterly Report on Form
10-Q filed with the Securities and Exchange Commission on August
14, 2008.
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10
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Convertible Subordinated Promissory Note, dated August 13, 2008,
incorporated by reference to Exhibit 4.4 to the Issuers Quarterly
Report on Form 10-Q filed with the Securities and Exchange
Commission on August 14, 2008.
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11
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Joint Filing Agreement
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies
that the information set forth in this statement is true, complete and correct.
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Dated: August 28, 2008
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ROBERT M. WORSLEY AND CHRISTI M. WORSLEY REVOCABLE
TRUST
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By:
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/s/ Robert M. Worsley
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Name:
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Robert M. Worsley
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Title:
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Trustee
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By:
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/s/ Christi M. Worsley
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Name:
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Christi M. Worsley
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Title:
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Trustee
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Dated: August 28, 2008
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ROBERT M. WORSLEY
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/s/ Robert M. Worsley
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Dated: August 28, 2008
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CHRISTI M. WORSLEY
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/s/ Christi M. Worsley
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