SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED
IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 2)(1)
HUDSON TECHNOLOGIES, INC.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
444144109
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(CUSIP Number)
Richard D. Waters, Jr.
c/o J.P. Morgan Partners, LLC
1221 Avenue of the Americas, 40th Floor
New York, NY 10020
(212) 899-3400
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 16, 2001
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13D
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 15 Pages)
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(1) The remainder of this cover page shall be filled out for a reporting
person's 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 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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CUSIP No. 444144109 13D Page 2 of 15 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FLEMING US DISCOVERY FUND III, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|X|
(b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 4,413,110
OWNED BY --------------------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER*
PERSON WITH
0
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9 SOLE DISPOSITIVE POWER
4,413,110
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
-2-
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CUSIP No. 444144109 13D Page 3 of 15 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
FLEMING US DISCOVERY OFFSHORE FUND III, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|X|
(b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 707,448
OWNED BY ----------------------------------------------------------
EACH
REPORTING 8 SHARED VOTING POWER
PERSON WITH
0
----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
707,448
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
-3-
Preliminary Note: This Amendment No. 2 to the Statement on Schedule 13D
originally filed on April 9, 1999, as amended by Amendment No. 1 thereto filed
on February 14, 2001 (as so amended, the "Statement") with respect to the common
stock, $.01 par value per share (the "Common Stock"), of Hudson Technologies,
Inc., a New York corporation (the "Issuer") amends Items 1, 2, 5, and 7 and
Appendices 1 and 2, and supplements Items 3, 4, 5 and 6. The information
contained in Item 2 and the corresponding Appendices thereto and Item 5 is being
amended to reflect the transfer by Robert Fleming Inc., a subsidiary of J.P.
Morgan Chase & Co., of its interest in the Reporting Persons to JPMP Capital
Corp. and a change in management relating thereto. The information contained in
Items 3, 4, 5 and 6 is being supplemented to reflect the purchase of additional
shares of Series A Preferred Stock, the receipt of dividends on the Series A
Preferred Stock in shares of Series A Preferred Stock, the purchase of
convertible notes and exchange notes, the receipt of options and the potential
future purchase of additional securities in Issuer's rights offering.
Item 1. Security and Issuer
The address of the Issuer's principal executive offices is 275 North Middletown
Road, Pearl River, New York 10965. Information in the original Schedule 13D
remains in effect except to the extent that it is superseded by subsequently
filed information, including the information contained in Amendment No. 1 and
this Amendment No. 2. Responses to each item below are incorporated by reference
into each other item, as applicable.
Item 2. Identity and Background
This Statement is being filed pursuant to a Joint Filing Agreement (attached as
Exhibit 1 and incorporated herein by reference) by (i) Fleming US Discovery Fund
III, L.P. ("US Fund"), a Delaware limited partnership whose principal office is
c/o J.P. Morgan Partners, LLC, 1221 Avenue of the Americas, New York, New York
10020 and (ii) Fleming US Discovery Offshore Fund III, L.P. ("Offshore Fund"), a
Bermuda limited partnership whose principal office is c/o Bank of Bermuda, Ltd.
6 Front Street, Hamilton HM 11 Bermuda.
US Fund's principal business is to invest in securities with a view to long-term
capital appreciation. The general partner of US Fund is Fleming US Discovery
Partners, L.P. ("Fleming Partners"), a Delaware limited partnership, whose
principal business office is located at the same address as US Fund. Fleming
Partners' principal business is to act as the general partner of US Fund and
Offshore Fund. The general partner of Fleming Partners is Fleming US Discovery,
LLC ("Discovery"), a Delaware limited liability company whose principal office
is located at the same address as US Fund. Discovery's principal business is to
act as the sole general partner of Fleming Partners. A Board of Managers
consisting of five members manages Discovery. Set forth on Appendix 1 attached
hereto and incorporated herein by reference are the names, business addresses,
principal occupations and employments of each member of the Board of Managers
and Committees of Discovery.
Effective September 30, 2001, JPMP Capital Corp. ("JPMP Capital"), a New York
corporation purchased Robert Fleming Inc.'s interests as the controlling member
of Discovery and the sole limited partner of Fleming Partners pursuant to that
certain assignment and assumption agreement. As a result thereof, JPMP Capital
has the right to appoint three of the five members of the Board of Managers of
Discovery. JPMP Capital's principal place office is located at the same address
as US Fund. JPMP Capital is engaged in the venture capital and leveraged buyout
business. Set forth on Appendix 2 attached hereto and incorporated herein by
reference are the names, business addresses, principal occupations and
employments of each executive officer and director of JPMP Capital.
JPMP Capital is a wholly-owned subsidiary of J.P. Morgan Chase & Co. ("JP Morgan
Chase"), a Delaware corporation which is engaged (primarily through
subsidiaries) in the commercial banking business with its principal office
located at 270 Park Avenue, New York, New York 10017. Set forth on Appendix 3
attached hereto and incorporated herein by reference are the names, business
addresses, principal occupations and employments of each executive office and
director of JP Morgan Chase.
-4-
The Offshore Fund's principal business is to invest in securities with a view to
long-term capital appreciation. The Offshore Fund has two general partners,
Fleming Partners and Fleming (Bermuda) Discovery III Limited ("Fleming
Bermuda"), a company organized in Bermuda. Fleming Bermuda's principal business
office address is located at the same address as the Offshore Fund. Fleming
Bermuda's principal business is to serve as a general partner of the Offshore
Fund.
During the last five years prior to the date of this filing, none of the
Reporting Persons or persons identified in Appendix 1 or Appendix 2 has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction ending in a judgment, decree or
final order enjoining future violations or prohibiting or mandating the
activities subject to, federal or state securities laws or finding a violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
On February 16, 2001, the US Fund purchased for a purchase price of about
$2,585,500, 25,855 shares of the Issuer's Series A Convertible Preferred Stock,
$.01 par value per share ("Series A Preferred Stock"), convertible on such date
into about 1,088,632 shares of Common Stock (subject to certain anti-dilution
provisions). The US Fund purchased such shares of Series A Preferred Stock with
its working capital. No part of the purchase price was or will be represented by
funds or other consideration borrowed or otherwise obtained for the purpose of
acquiring, holding, trading or voting the Common Stock.
On February 16, 2001, the Offshore Fund purchased for a purchase price of about
$414,500, 4,145 shares of Series A Preferred Stock, convertible on such date
into about 174,526 shares of Common Stock, subject to certain anti-dilution
provisions. The Offshore Fund purchased such shares of Series A Preferred Stock
with its working capital. No part of the purchase price was or will be
represented by funds or other consideration borrowed or otherwise obtained for
the purpose of acquiring, holding, trading or voting the Common Stock.
On December 20, 2002, (a) the US Fund exchanged $349,939.27 in principal and
interest on the Issuer's 12% non-convertible unsecured notes due 11/7/03 into an
equal amount of Issuer's 10% Exchange Notes due 12/20/04 (the "Exchange Notes")
and (b) the Offshore Fund exchanged $55,787.42 in principal and interest on the
Issuer's 12% non-convertible unsecured notes due 11/7/03 into an equal amount of
Issuer's Exchange Notes. Each of the US Fund and the Offshore Fund purchased the
12% non-convertible unsecured notes due 11/7/03 with its working capital. No
part of the purchase price was or will be represented by funds or other
consideration borrowed or otherwise obtained for the purpose of acquiring,
holding, trading or voting the Common Stock.
The US Fund and the Offshore Fund have elected to defer the receipt of any
accrued or future quarterly interest payments on the Exchange Notes (which would
otherwise be payable quarterly on April 1, July 1, October 1 and January 1 at
the rate of 10% per annum commencing April 1, 2003) until the maturity date of
the Exchange Notes in which case the deferred interest will accrue additional
interest at the rate of 10% per annum.
At the Exchange Note Conversion Rate (described below) on 12/20/02, the Exchange
Notes held by the US Fund would be convertible into 441,619 shares of common
stock, $.01 par value per share ("Common Stock") and the Exchange Notes held by
the Offshore Fund would be convertible into 70,403 shares of Common Stock. The
Exchange Notes are convertible under the following circumstances ("Exchange Note
Conversion Events"):
-5-
- Holders of the Exchange Notes have the right to convert all or a portion
of the outstanding principal balance, and any accrued interest thereon, to
Common Stock of the Issuer, upon, but not prior to 12/20/03 at a conversion
rate equal to $.7924 (the average closing sale price of the Issuer's Common
Stock as reported on the Nasdaq SmallCap Market for the five business days
immediately preceding the closing date), subject to anti-dilution
adjustment (the "Exchange Note Conversion Rate").
- In the event of a public offering of equity securities by the Issuer
("Equity Offering") at any time prior to 12/20/03 for gross proceeds of not
less than $2 million, all outstanding principal and interest, if any, on
the Exchange Notes will be either (i) applied to the purchase of equity
securities in the Equity Offering at the public offering purchase price, or
(ii) converted into Common Stock at the then effective Exchange Note
Conversion Rate.
- The Issuer, at its option, may prepay in shares of Common Stock at the
then-effective Exchange Note Conversion Rate, any part of the principal
amount of the Exchange Note together with accrued and unpaid interest on
that portion of the principal amount of the Exchange Note repaid, on 20
days prior written notice to the Exchange Note holder.
Under the terms of the Exchange Notes, the Issuer is obligated to issue, on the
earlier of (a) 12/20/03, or (b) the consummation of an Equity Offering, Common
Stock purchase warrants ("Exchange Note Warrants") exercisable to purchase an
aggregate number of shares of Common Stock equal to 10% of the number of shares
of Common Stock into which the Exchange Notes were convertible on 12/20/02 -
44,162 with respect to the US Fund and 7,040 with respect to the Offshore Fund
(see Exhibit 14 hereto, which is incorporated herein by reference). Each
Exchange Note Warrant will be exercisable to purchase one share of Common Stock
for a period of five years from issuance at an exercise price equal to 110% of
the lesser of (i) $.7924, which was the Exchange Note Conversion Rate on the
date of the issuance of the Exchange Notes, or (ii) the Exchange Note Conversion
Rate on the date of issuance of the Exchange Note Warrant.
On December 20, 2002, (a) the US Fund purchased the Issuer's 10% Convertible
Notes due 12/20/04 (the "Convertible Notes") in the principal amount of $302,000
and (b) the Offshore Fund purchased Convertible Notes in the principal amount of
$48,000. Each of the US Fund and the Offshore Fund purchased the Convertible
Notes with its working capital. No part of the purchase price was or will be
represented by funds or other consideration borrowed or otherwise obtained for
the purpose of acquiring, holding, trading or voting the Common Stock. On such
date, the Exchange Notes and the Convertible Notes were identical in terms (see
Exhibit 15 hereto, which is incorporated herein by reference).
The US Fund and the Offshore Fund have elected to defer the receipt of any
accrued or future quarterly interest payments on the Convertible Notes (which
would otherwise be payable quarterly on April 1, July 1, October 1 and January 1
at the rate of 10% per annum commencing April 1, 2003) until the maturity date
of the Convertible Notes in which case the deferred interest will accrue
additional interest at the rate of 10% per annum.
At the Convertible Note Conversion Rate (described below) under the terms of the
Convertible Notes, the Convertible Notes held by the US Fund on 12/20/02 would
be convertible into 381,121 shares of Common Stock and the Convertible Notes
held by the Offshore Fund would be convertible into 60,575 shares of Common
Stock. However, pursuant to certain waiver letters (described below), the
Convertible Note Conversion Rate has been changed to a rate contingent on future
events, and thus, the number of shares of Common Stock into which the
Convertible Notes are convertible cannot be determined at this time. The
Convertible Notes are convertible under the following circumstances
("Convertible Note Conversion Events"):
-6-
- Holders of the Convertible Notes have the right to convert all or a
portion of the outstanding principal balance, and any accrued interest
thereon, to Common Stock of the Issuer, upon, but not prior to 12/20/03 at
a conversion rate equal to $.7924 (the average closing sale price of the
Issuer's Common Stock as reported on the Nasdaq SmallCap Market for the
five business days immediately preceding the closing date), subject to
anti-dilution adjustment (the "Convertible Note Conversion Rate"). See the
description below of the waiver letter and its effect on the Convertible
Note Conversion Rate.
- In the event of an Equity Offering at any time prior to 12/20/03 for gross
proceeds of not less than $2 million, all outstanding principal and
interest, if any, on the Convertible Notes will be either (i) applied to
the purchase of equity securities in the Equity Offering at the public
offering purchase price, or (ii) converted into Common Stock at the then
effective Convertible Note Conversion Rate.
- The Issuer, at its option, may prepay in shares of Common Stock at the
then-effective Convertible Note Conversion Rate, any part of the principal
amount of the Convertible Note together with accrued and unpaid interest on
that portion of the principal amount of the Convertible Note repaid, on 20
days prior written notice to the Convertible Note holder.
Under the terms of the Convertible Notes, the Issuer is obligated to issue, on
the earlier of (a) 12/20/03, or (b) the consummation of an Equity Offering,
Common Stock purchase warrants ("Convertible Note Warrants") exercisable to
purchase an aggregate number of shares of Common Stock equal to 10% of the
number of shares of Common Stock into which the Convertible Notes were
convertible on 12/20/02 - 38,112 with respect to the US Fund and 6,058 with
respect to the Offshore Fund (see Exhibit 14 hereto, which is incorporated
herein by reference). Each Convertible Note Warrant will be exercisable to
purchase one share of Common Stock for a period of five years from issuance at
an exercise price equal to 110% of the lesser of (i) $.7924, which was the
Convertible Note Conversion Rate on the date of the issuance of the Convertible
Notes, or (ii) the Convertible Note Conversion Rate on the date of issuance of
the Convertible Note Warrant. See the description below of the waiver letter and
its effect on the number of Convertible Note Warrants and exercise price
thereof.
Each of the US Fund and the Offshore Fund entered into a waiver letter dated as
of April 10, 2003 (see Exhibits 12 and 13 hereto which are incorporated herein
by reference), pursuant to which it was agreed that, effective as of December
20, 2002, the conversion rate under such fund's Convertible Note would equal (i)
the lower of (A) the conversion price of the equity securities in the Equity
Offering or (B) $1.13 (the average closing sale price of the Issuer's Common
Stock as reported on the Nasdaq SmallCap Market for the five business days
immediately preceding the date of the waiver letter), in the event of an Equity
Offering prior to December 20, 2003, or (ii) $1.13, in the event that an Equity
Offering does not occur prior to December 20, 2003, subject to anti-dilution
adjustment. Assuming a $1.13 conversion rate, the Convertible Notes held by the
US Fund would be convertible into 267,257 shares of Common Stock and the
Convertible Notes held by the Offshore Fund would be convertible into $42,478
shares of Common Stock.
Since the Convertible Note Conversion Rate cannot be determined at this time
(since it is contingent on future events), the following also cannot be
determined at this time (i) the number of shares of Common Stock into which the
Convertible Notes are convertible, (ii) the number of Convertible Note Warrants
that the Issuer is obligated to issue and (iii) the exercise price of the
Convertible Note Warrants.
On April 15, 2003, (a) the US Fund purchased 10% Convertible Notes due 4/15/05
(the "Additional Convertible Notes") in the principal amount of $431,000 and (b)
the Offshore Fund purchased Additional Convertible Notes in the principal amount
of $69,000. Each of the US Fund and the Offshore Fund purchased the Additional
Convertible Notes with its working capital. No part of the purchase price was or
will be represented by funds or other consideration borrowed or otherwise
obtained for the purpose of acquiring, holding, trading or voting the Common
Stock. On such date, the Exchange Notes and the Additional Convertible Notes
were identical in terms (see Exhibit 15 hereto, which is incorporated herein by
reference).
-7-
At the Additional Convertible Note Conversion Rate (described below) on April
15, 2003, the Additional Convertible Notes purchased on such date by the US Fund
would be convertible into 306,543 shares of Common Stock and the Additional
Convertible Notes purchased by the Offshore Fund would be convertible into
49,075 shares of Common Stock. The Additional Convertible Notes are convertible
under the following circumstances ("Additional Convertible Note Conversion
Events"):
- Holders of the Convertible Notes have the right to convert all or a
portion of the outstanding principal balance, and any accrued interest
thereon, to Common Stock of the Issuer, upon, but not prior to 4/15/04 at a
conversion rate equal to $1.406 (the average closing sale price of the
Issuer's Common Stock as reported on the Nasdaq SmallCap Market for the
five business days immediately preceding the closing date), subject to
anti-dilution adjustment (the "Additional Convertible Note Conversion
Rate").
- In the event of an Equity Offering at any time prior to 4/15/04 for gross
proceeds of not less than $2 million, all outstanding principal and
interest, if any, on the Additional Convertible Notes will be either (i)
applied to the purchase of equity securities in the Equity Offering at the
public offering purchase price, or (ii) converted into Common Stock at the
then effective Additional Convertible Note Conversion Rate.
- The Issuer, at its option, may prepay in shares of Common Stock at the
then-effective Additional Convertible Note Conversion Rate, any part of the
principal amount of the Additional Convertible Note together with accrued
and unpaid interest on that portion of the principal amount of the
Additional Convertible Note repaid, on 20 days prior written notice to the
Additional Convertible Note holder.
The US Fund and the Offshore Fund have elected to defer the receipt of any
accrued or future quarterly interest payments on the Additional Convertible
Notes (which would otherwise be payable quarterly on July 1, October 1, January
1 and April 1 at the rate of 10% per annum commencing April 15, 2003) until the
maturity date of the Additional Convertible Notes in which case the deferred
interest will accrue additional interest at the rate of 10% per annum.
Under the terms of the Additional Convertible Notes, the Issuer is obligated to
issue, on the earlier of (a) 4/15/04, or (b) the consummation of an Equity
Offering, Common Stock purchase warrants ("Additional Convertible Note
Warrants") exercisable to purchase an aggregate number of shares of Common Stock
equal to 10% of the number of shares of Common Stock into which the Additional
Convertible Notes were convertible on 4/15/03 - 30,654 with respect to the US
Fund and 4,908 with respect to the Offshore Fund (see Exhibit 14 hereto, which
is incorporated herein by reference). Each Additional Convertible Note Warrant
will be exercisable to purchase one share of Common Stock for a period of five
years from issuance at an exercise price equal to 110% of the lesser of (i)
$1.406, which was the Additional Convertible Note Conversion Rate on the date of
the issuance of the Additional Convertible Notes, or (ii) the Additional
Convertible Note Conversion Rate on the date of issuance of the Additional
Convertible Note Warrant.
On August 31, 1999, in lieu of granting options to directors appointed to the
Board by the US Fund and the Offshore Fund, the Issuer issued, under the
Issuer's stock option plan (i) nonqualified options exercisable for 8,618 shares
of Common Stock directly to the US Fund and (ii) nonqualified options
exercisable for 1,382 shares of Common Stock directly to the Offshore Fund
(collectively, the "Fleming Options 1999"). Such options are fully vested
immediately exercisable, have an expiration date of 8/31/04 and an exercise
price of $2.38.
On September 1, 2000, in lieu of granting options to directors appointed to the
Board by the US Fund and the Offshore Fund, the Issuer issued, under the
Issuer's stock option plan (i) nonqualified options exercisable for 8,618 shares
of Common Stock directly to the US Fund and (ii) nonqualified options
exercisable for 1,382 shares of Common Stock directly to the Offshore Fund
(collectively, the "Fleming Options 2000"). Such options are fully vested and
immediately exercisable, have an expiration date of 9/1/05 and an exercise price
of $2.78.
-8-
On August 27, 2001, in lieu of granting options to directors appointed to the
Board by the US Fund and the Offshore Fund, the Issuer issued, under the
Issuer's stock option plan (i) nonqualified options exercisable for 8,618 shares
of Common Stock directly to the US Fund and (ii) nonqualified options
exercisable for 1,382 shares of Common Stock directly to the Offshore Fund
(collectively, the "Fleming Options 2001"). Such options are fully vested
immediately exercisable, have an expiration date of 8/27/06 and an exercise
price of $3.08.
On January 2, 2003, in lieu of granting options to directors appointed to the
Board by the US Fund and the Offshore Fund (i) nonqualified options exercisable
for 4,309 shares of Common Stock directly to the US Fund and (ii) nonqualified
options exercisable for 691 shares of Common Stock directly to the Offshore Fund
(collectively, the "Fleming Options 2003"). Such options are immediately
exercisable, have an expiration date of 1/2/08 and an exercise price of $0.85.
The Fleming Options 1999, Fleming Options 2000, Fleming Options 2001 and Fleming
Options 2002 are collectively referred to herein as the "Fleming Options".
Item 4. Purposes of Transactions
(a) Reference is made to Issuer's registration statement on Form SB-2/A (the
"Registration Statement") filed with the Securities and Exchange Commission on
June 13, 2003, in connection with the offering of shares of Common Stock of
Issuer. As further described in the Registration Statement, the US Fund and the
Offshore Fund (collectively, the "Fleming Funds") have agreed that if the gross
proceeds from the shares sold by Issuer for cash in the offering to Issuer's
stockholders and other investors (other than the Fleming Funds) together with
the amount of principal and accrued interest due on the outstanding $1,650,000
principal amount of convertible notes and exchange notes that will be converted
to common stock in connection with the offering is less than $2,575,000, the
Fleming Funds have agreed to purchase from the shares being offered to the
public that number of shares (not to exceed an aggregate of $925,000) necessary
for Issuer to reach the $2,575,000 level. In addition, the Fleming Funds may,
but are not required to, purchase from the shares being offered to the public,
additional shares in excess of the amount described in the foregoing sentence.
(b) - (j) No changes.
Item 5. Interest in Securities of the Issuer
On February 16, 2001, the US Fund purchased 25,855 shares of the Issuer's Series
A Preferred Stock, convertible on such date into about 1,088,637 shares of
Common Stock (subject to certain anti-dilution provisions).
On February 16, 2001, the Offshore Fund purchased 4,145 shares of Series A
Preferred Stock, convertible on such date into about 174,526 shares of Common
Stock, subject to certain anti-dilution provisions.
The US Fund has received the following dividends (in accordance with the terms
set forth in the designation of the Series A Preferred Stock) after September
2000: (a) March 30, 2001, a dividend of 2,422 shares of Series A Preferred
Stock, convertible on such date into 101,979 shares of Common Stock, subject to
certain anti-dilution provisions, (b) September 30, 2001, a dividend of 3,224
shares of Series A Preferred Stock, convertible on such date into 135,747 shares
of Common Stock, subject to certain anti-dilution provisions, (c) March 30,
2002, a dividend of 3,337 shares of Series A Preferred Stock, convertible on
such date into 140,505 shares of Common Stock, subject to certain anti-dilution
provisions, (d) September 30, 2002, a dividend of 3,457 shares of Series A
Preferred Stock, convertible on such date into 145,558 shares of Common Stock,
subject to certain anti-dilution provisions and (e) March 30, 2003, a dividend
of 3,580 shares of Series A Preferred Stock, convertible on such date into
150,737 shares of Common Stock, subject to certain anti-dilution provisions.
-9-
As of the date hereof, the US Fund holds 104,095 shares of Series A Preferred
Stock ("US Fund Preferred Stock"), which are convertible into 4,382,947 shares
of Common Stock, subject to certain anti-dilution provisions (the "US Fund
Conversion Shares").
As of the date hereof, the US Fund holds fully vested and currently exercisable
Fleming Options exercisable into 30,163 shares of Common Stock (the "US Fund
Options").
The Offshore Fund has received the following dividends (in accordance with the
terms set forth in the designation of the Series A Preferred Stock) after
September 2000: (a) March 30, 2001, a dividend of 388 shares of Series A
Preferred Stock, convertible into 16,337 shares of Common Stock, subject to
certain anti-dilution provisions, (b) September 30, 2001, a dividend of 516
shares of Series A Preferred Stock, convertible into 21,726 shares of Common
Stock, subject to certain anti-dilution provisions, (c) March 30, 2002, a
dividend of 536 shares of Series A Preferred Stock, convertible into 22,568
shares of Common Stock, subject to certain anti-dilution provisions, (d)
September 30, 2002, a dividend of 554 shares of Series A Preferred Stock,
convertible on such date into 23,326 shares of Common Stock, subject to certain
anti-dilution provisions and (e) March 30, 2003, a dividend of 573 shares of
Series A Preferred Stock, convertible on such date into 24,126 shares of Common
Stock, subject to certain anti-dilution provisions.
As of the date hereof, the Offshore Fund holds 16,687 shares of Series A
Preferred Stock ("Offshore Fund Preferred Stock"), which are convertible into
702,611 shares of Common Stock, subject to certain anti-dilution provisions (the
"Offshore Fund Conversion Shares").
As of the date hereof, the Offshore Fund holds fully vested and currently
exercisable Fleming Options exercisable into 4,837 shares of Common Stock (the
"Offshore Fund Options").
Because of their relationship as affiliated entities, for purposes of Rule 13d-3
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), the
US Fund and the Offshore Fund (i) may be deemed to beneficially own the US Fund
Conversion Shares, the Offshore Fund Conversion Shares, the US Fund Options and
the Offshore Fund Options, and (ii) may be deemed to beneficially own all of the
Exchange Notes, Convertible Notes and Additional Convertible Notes held by the
US Fund and the Offshore Fund, as of the date that is within 60 days of the date
that the US Fund and the Offshore Fund have the right to convert such Exchange
Notes, Convertible Notes and Additional Convertible Notes as described in Item 3
above (at such time, collectively, the "Fleming Convertible Notes"). As the
general partner of the US Fund and the Offshore Fund, Fleming Partners may be
deemed to beneficially own the US Fund Conversion Shares, the Offshore Fund
Conversion Shares, the US Fund Options, the Offshore Fund Options and the
Fleming Convertible Notes. As the general partner of Fleming Partners, Discovery
may be deemed to beneficially own the US Fund Conversion Shares, the Offshore
Fund Conversion Shares, the US Fund Options, the Offshore Fund Options and the
Fleming Convertible Notes. As a controlling member of Discovery and the sole
limited partner of Fleming Partners, JPMP Capital may be deemed to beneficially
own the US Fund Conversion Shares, the Offshore Fund Conversion Shares, the US
Fund Options, the Offshore Fund Options and the Fleming Convertible Notes. JPMP
Capital is a wholly-owned subsidiary of JP Morgan Chase. Thus, as the parent of
JPMP Capital, for purposes of Rule 13d-3 promulgated under the Exchange Act, JP
Morgan Chase may be deemed to beneficially own the US Fund Conversion Shares,
the Offshore Fund Conversion Shares, the US Fund Options, the Offshore Fund
Options and the Fleming Convertible Notes. Each of Fleming Partners, Discovery,
JPMP Capital and JP Morgan Chase disclaims any beneficial ownership of the
shares of the Issuer reported as beneficially owned by the Reporting Persons,
except to the extent of its pecuniary interest therein. Each of JPMP Capital and
JP Morgan Chase is named herein solely for informational purposes.
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As of the date hereof, for purposes of Rule 13d-3 promulgated under the Exchange
Act, each of US Fund, Offshore Fund, Fleming Partners, Discovery, JPMP Capital
and JP Morgan Chase may be deemed to have beneficially owned 49.8% of the
outstanding Common Stock, on an aggregated basis, which percentage is calculated
based upon (i) 5,165,020 shares of Common Stock reported outstanding as of April
15, 2003 by the Issuer on its Annual Report on Form 10-QSB filed with the SEC on
May 15, 2003, (ii) the number of shares of Common Stock (5,085,558) issuable
upon conversion of the US Fund Preferred Stock and the Offshore Fund Preferred
Stock and (iii) the number of shares of Common Stock (35,000) issuable upon
exercise of the US Fund Options and the Offshore Fund Options.
The percentage is calculated by dividing 5,120,558 (which is the sum of
5,085,558 and 35,000) by 10,285,578 (which is the sum of 5,085,558; 35,000 and
5,165,020).
Pursuant to the Issuer's Certificate of Amendment of the Certificate of
Incorporation filed with the Secretary of State of New York on February 16, 2001
(see Exhibit 2 hereto, which is incorporated herein by reference), the Issuer
increased the number of shares designated as Series A Preferred Stock from
75,000 to 150,000; provided, however that the Issuer will issue any such shares
in excess of 95,000 only to pay dividends on the Series A Preferred Stock as
provided in such Certificate of Amendment.
Pursuant to the Issuer's Certificate of Amendment of the Certificate of
Incorporation filed with the Secretary of State of New York on March 30, 1999
(see Exhibit 3 hereto, which is incorporated herein by reference), Section 4(a)
of the Certificate of Incorporation contained a provision in the designation of
the Series A Preferred Stock which irrevocably constituted Kevin J. Zugibe and
Stephen P. Mandracchia, and each of them, as the proxy of each holder of the
Series A Preferred Stock, with full power and substitution in each of them, in
the name, place and stead of such holder, to vote at all meetings of the
stockholders of the Issuer (other than with respect to matters requiring a
separate class vote of holders of the Series A Preferred Stock) that number of
the Issuer's voting shares of all classes held by the holders of the Series A
Preferred Stock as shall exceed 29% of the votes entitled to be cast by all
stockholders of the Issuer (the "Proxy").
Pursuant to the Issuer's Certificate of Amendment of the Certificate of
Incorporation filed with the Secretary of State of New York on March 20, 2002
(see Exhibit 4 hereto, which is incorporated herein by reference), Section
5(d)(ii) of Article 5 of the Certificate of Incorporation was amended to provide
that if the Issuer issued or sold "Additional Shares of Stock" (as defined in
the Issuer's Certificate of Incorporation) at a price per share less than the
Conversion Price of the Series A Preferred Stock (as defined in the Issuer's
Certificate of Incorporation) in effect immediately prior to such issuance or
sale, then the Conversion Price as to the common stock into which the Series A
Preferred Stock is convertible will be adjusted to equal the higher of (a) the
consideration per Additional Share of Stock, or (b) $1.78 (the "Conversion Price
Floor"). By virtue of the provisions of Section 5(d)(iii) of the Issuer's
Certificate of Incorporation, the foregoing amendment to the determination of
the Conversion Price also applies to any warrants or other securities
convertible into Common Stock that the Issuer may issue.
Pursuant to the Issuer's Certificate of Amendment of the Certificate of
Incorporation filed with the Secretary of State of New York on January 6, 2003
(see Exhibit 5 hereto, which is incorporated herein by reference):
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(a) Section 4(a) of Article 5 of the Certificate of Incorporation was
amended to remove the Proxy, such that each share of Series A Preferred
Stock shall entitle the holder thereof to such number of votes per
share on each such action as shall equal the number of shares of Common
Stock (including fractions of a share) into which each share of Series
A Preferred Stock is then convertible; provided, however, that as the
same relates solely to the voting rights of the Series A Preferred
Stock as set forth in such Section 4, in determining the number of
votes per share of Series A Preferred Stock, the Conversion Price shall
be the higher of (a) the Conversion Price then in effect, or (b) $1.78,
and
(b) Section 5(d)(ii) of Article 5 of the Certificate of Incorporation
was amended to remove the Conversion Price Floor, such that if the
Issuer issued or sold Additional Shares of Stock in exchange for
consideration in an amount per Additional Share of Stock less than the
Conversion Price in effect immediately prior to such issuance or sale
of Additional Shares of Stock, then the Conversion Price as to the
Common Stock into which the Series A Preferred Stock is convertible
immediately prior to such adjustment will be adjusted to equal the
consideration paid per Additional Share of Stock.
(b) The information required by this paragraph is reflected on Lines 7-10 of
each Reporting Person's cover page, incorporated herein by reference.
(c) Other than as described in this Statement, none of the Reporting Persons has
effected any transactions in the Common Stock during the last 60 days.
(d) No other person is known to have the right to receive or the power to direct
the receipt of dividends from, or any proceeds from the sale of, the shares of
Common Stock beneficially owned by any of the Reporting Persons.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Each of the US Fund and the Offshore Fund acquired the additional shares of
Series A Preferred Stock described in Item 5 herein (a) pursuant to dividend
rights in accordance with the terms of the designation of the Series A Preferred
Stock, and (b) pursuant to a Stock Purchase Agreement, dated as of February 6,
2001, between such Fund and the Issuer (see Exhibits 6 and 7 hereto,
respectively, which are incorporated herein by reference).
Each of the US Fund and the Offshore Fund entered into a First Amendment to
Stock Purchase Agreements and Waiver between such Fund and the Issuer, effective
as of March 5, 2002 (see Exhibit 8 and 9 hereto, respectively, which are
incorporated herein by reference), pursuant to which (a) each such Fund
consented to the amendment to the Certificate of Incorporation to provide for
the Conversion Price Floor (described in Item 5 above), (b) each such Fund
waived certain sections of the stock purchase agreements dated March 30, 1999
and February 1, 2001 (the "Purchase Agreements") for the purpose of effecting
such amendment to the Certificate of Incorporation described in the foregoing
clause (a), and (c) the Purchase Agreements were amended to require the prior
written consent of the Fleming holders for the Issuer to issue or sell any
additional shares of its Common Stock or any evidence of indebtedness, shares of
preferred stock or other securities which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property, into
shares of Common Stock, for a consideration per share that is less than the
conversion price of the Series A Convertible Preferred Stock in effect
immediately prior to such issuance or sale other than any options or other
securities that may be issued under any of the Issuer's stock option or stock
incentive plans.
-12-
Each of the US Fund and the Offshore Fund entered into an Agreement, Waiver and
Consent (the "Agreement, Waiver and Consent") between such Fund and the Issuer,
effective as of December 19, 2002 (see Exhibits 10 and 11 hereto, respectively,
which are incorporated herein by reference), pursuant to which (a) the parties
agreed, subject to the requisite shareholder approval (which such approval was
obtained on December 20, 2002) to amendments to the Certificate of Incorporation
to remove the Conversion Price Floor and the Proxy (as described in Item 5
above), (b) each such Fund consented to the issuance by the Issuer of
Convertible Notes and Exchange Notes for consideration that is less than the
Conversion Price of the Series A Preferred Stock in effect immediately prior to
the issuance of the Convertible Notes and Exchange Notes, respectively, (c) each
such Fund consented to the issuance by the Issuer of Convertible Note Warrants
and Exchange Note Warrants, or the Issuer's obligation to issue the Convertible
Note Warrants and Exchange Note Warrants for consideration that is less than the
Conversion Price of the Series A Preferred Stock in effect immediately prior to
the issuance of the Convertible Note Warrants and Exchange Note Warrants,
respectively and (d) each such Fund waived certain sections of the Purchase
Agreements, as amended to date (the "Amended Purchase Agreements") for the
purpose of effecting (i) the amendments described in the foregoing clause (a)
and (ii) the consents described in the foregoing clauses (b) and (c).
In addition, pursuant to the Agreements, Waivers and Consents dated as of
December 19, 2002, each of the US Fund and the Offshore Fund agreed to defer the
implementation of the anti-dilution adjustment to the conversion price of the
Series A Preferred that would otherwise result from the issuance of the Exchange
Notes and the Conversion Notes. However, such waivers of the anti-dilution
adjustment will not apply in the event of an Exchange Note Conversion Event or
Convertible Note Conversion Event (described in Item 3 above) or any other event
that would result in the adjustment of the conversion price of the Series A
Preferred as set forth in the designation of the Preferred A Stock in the
Issuer's certificate of incorporation.
Note that if the US Fund and Offshore Fund had not entered into the Agreements,
Waivers and Consents, then upon the issuance of the Exchange Notes and
Convertible Notes on December 20, 2002, the conversion price of the Series A
Preferred would have been reduced from $2.375 to $.7924. Thus, at a $.7924
conversion price (i) the 104,095 shares of Series A Preferred held by the US
Fund would have been convertible into 13,136,673 shares of Common Stock (instead
of 4,382,947 shares of Common Stock using a $2.375 conversion price) and (ii)
the 16,687 shares of Series A Preferred held by the Offshore Fund would have
been convertible into 2,105,881 shares of Common Stock (instead of 702,611
shares of Common Stock using a $2.375 conversion price) Further, if the
conversion price of the Series A Preferred was currently $.7924, the Reporting
Persons may be deemed to beneficially own 74.7% of the outstanding Common Stock
(instead of 49.6% at a $2.375 conversion price) (as described in Item 5 above).
Instead, upon an Exchange Note Conversion Event or any other event that would
result in the adjustment to the conversion price of the Series A Preferred) the
conversion price of the Series A Preferred will be reduced to $.7924 (or such
lower number as is applicable in accordance with the terms of anti-dilution
provisions of the Series A Preferred).
Item 7. Materials to Be Filed as Exhibits
The following additional material is filed as an Exhibit to this
Amendment No. 2:
Exhibit 1 - Joint Filing Agreement.
Exhibit 2 - Certificate of Amendment of the Certificate of
Incorporation of Hudson Technologies, Inc. filed with
the Secretary of State of New York on February 16, 2001
(incorporated by reference to Exhibit 3.8 to Form 10-KSB
filed by the Issuer on March 29, 2001, under SEC File
No. 033-80270-NY).
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Exhibit 3 - Certificate of Amendment of the Certificate of
Incorporation of Hudson Technologies, Inc. filed with
the Secretary of State of New York on March 30, 1999
(incorporated by reference to Exhibit 10.21 to Form
10-KSB filed by the Issuer on April 1, 1999, under SEC
File No. 033-80270-NY).
Exhibit 4 - Certificate of Amendment of the Certificate of
Incorporation of Hudson Technologies, Inc. filed with
the Secretary of State of New York on March 20, 2002
(incorporated by reference to Exhibit 10.12 to Form
10-KSB filed by the Issuer on March 29, 2002, under SEC
File No. 033-80270-NY).
Exhibit 5 - Certificate of Amendment of the Certificate of
Incorporation of Hudson Technologies, Inc. filed with
the Secretary of State of New York on January 6, 2003
(incorporated by reference to Exhibit 3.9 to Form 10-KSB
filed by the Issuer on April 15, 2003, under SEC File
No. 033-80270-NY).
Exhibit 6 - Stock Purchase Agreement, dated as of February 16,
2001, between Hudson Technologies, Inc. and Fleming US
Discovery Fund III, L.P. (incorporated by reference to
Exhibit 10.24 to Form 10-KSB filed by the Issuer on
March 29, 2001, under SEC File No. 033-80270-NY).
Exhibit 7 - Stock Purchase Agreement, dated as of February 16,
2001, between Hudson Technologies, Inc. and Fleming US
Discovery Offshore Fund III, L.P. (incorporated by
reference to Exhibit 10.24 to Form 10-KSB filed by the
Issuer on March 29, 2001, under SEC File No.
033-80270-NY).
Exhibit 8 - First Amendment to Stock Purchase Agreements and
Waiver, effective as of March 5, 2002, between Hudson
Technologies, Inc. and Fleming US Discovery Fund III,
L.P. (incorporated by reference to Exhibit 10.13 to Form
10-KSB filed by the Issuer on March 29, 2002, under SEC
File No. 033-80270-NY).
Exhibit 9 - First Amendment to Stock Purchase Agreements and
Waiver, effective as of March 5, 2002, between Hudson
Technologies, Inc. and Fleming US Discovery Offshore
Fund III, L.P. (incorporated by reference to Exhibit
10.14 to Form 10-KSB filed by the Issuer on March 29,
2002, under SEC File No. 033-80270-NY).
Exhibit 10 - Agreement, Waiver and Consent, dated as of December
19, 2002, by and between Hudson Technologies, Inc. and
Fleming US Discovery Fund III, L.P.
Exhibit 11 - Agreement, Waiver and Consent, dated as of December
19, 2002, by and between Hudson Technologies, Inc. and
Fleming US Discovery Offshore Fund III, L.P.
Exhibit 12 - Waiver Letter, dated as of April 10, 2003, by and
between Hudson Technologies, Inc. and Fleming US
Discovery Fund, III, L.P.
Exhibit 13 - Waiver Letter, dated as of April 10, 2003, by and
between Hudson Technologies, Inc. and Fleming US
Discovery Offshore Fund III, L.P.
-14-
Exhibit 14 - Form of Common Stock Purchase Warrants to be issued
by Hudson Technologies, Inc. (incorporated by reference
to Exhibit 10.16 to Form 10-KSB filed by the Issuer on
April 15, 2003, under SEC File No. 033-80270-NY)
Exhibit 15 - Form of 10% Subordinated Convertible Note issued
December 20, 2002 by Hudson Technologies, Inc.
(incorporated by reference to Exhibit 10.15 to Form
10-KSB filed by the Issuer on April 15, 2003, under SEC
File No. 033-80270-NY)
Appendix 1- Information About Fleming US Discovery, LLC Required
by Item 2
Appendix 2- Information About JPMP Capital Corp. Required by Item
2
Appendix 3- Information About JP Morgan Chase & Co. Required by
Item 2
-15-
SIGNATURE
After reasonable inquiry and to the best of the knowledge and belief of
each of the undersigned, each of the undersigned certifies that the information
set forth in this Statement is true, complete and correct.
Dated: June 25, 2003
FLEMING US DISCOVERY FUND III, L.P.
By: Fleming US Discovery Partners, L.P., its general partner
By: Fleming US Discovery, LLC, its general partner
By: /s/ Richard D. Waters, Jr.
----------------------------------------
Richard D. Waters, Jr., Manager
FLEMING US DISCOVERY OFFSHORE FUND III, L.P.
By: Fleming US Discovery Partners, L.P, its general partner
By: Fleming US Discovery, LLC, its general partner
By: /s/ Richard D. Waters, Jr.
-----------------------------------------
Richard D. Waters, Jr., Manager