Exhibit 10.27

 

Recon Technology, Ltd.

1902 Building C, King Long International Mansion

9 Fulin Road, Beijing 100107

People’s Republic of China

 

April 15, 2015

Jian Ke

1200 Abernathy Road

Suite 1700

Atlanta, GA 30328

 

Mr. Ke,

 

Reference is made to that certain Warrant to Purchase Ordinary Shares (the
“Warrant”) issued by Recon Technology, Ltd. (the “Company”) to Jian Ke (the
“Holder”) on November 29, 2013 in connection with the Company’s registered
offering of its ordinary shares and warrants. Except as otherwise defined
herein, capitalized terms in this letter agreement (the “Letter Agreement”)
shall have the meanings set forth in the Warrant.

 

The Holder hereby agrees to exchange the Warrant for 68,313 ordinary shares (the
“Exchange Shares”), which represents the number of ordinary shares that is equal
to one hundred twenty five percent (125%) of the Warrant Shares (the
“Exchange”). The Exchange Shares will be issued to the Holder in exchange for
the Warrant and without the payment of any other consideration by the Holder.
The Holder agrees that upon execution of this Letter Agreement, delivery of the
Warrant as set forth herein and delivery of the Exchange Shares to the Holder,
the Warrant will be automatically canceled and terminated.

 

2. In order to effectuate the Exchange, Holder agrees to execute and return this
Letter Agreement, together with the Warrant, to Ellenoff Grossman & Schole LLP,
legal counsel to the Company, at 1345 Avenue of the Americas, 11th Floor, New
York, New York 10105. Upon receipt of the executed Letter Agreement and the
Warrant, the Company will issue to the Company’s transfer agent an instruction
letter to issue the Exchange Shares free of any restrictive legend, in the name
of the Holder, to the address above. If the Holder desires to receive the shares
in book entry form, or to receive the stock certificates at an address other
than the one above, please indicate as such below.

 

Treatment of Exchange Shares
(Please check delivery option elected by Holder below)

 

___x___ Holder desires to receive the Exchange Shares in book entry form to the
Holder’s or its designee’s balance account with The Depository Trust Company
(“DTC”) through its Deposit/Withdrawal at Custodian system in accordance with
the following instructions:

 

Sterne Agee, DTC # 0750

Account #: 15346961

Account Name: JIAN KE

 

_______Holder desires to receive a stock certificate representing the Exchange
Shares to:

_________________________

_________________________

_________________________

 

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3. The Company hereby represents and warrants to the Holder that

 

3.1. The Company is duly organized, validly existing and in good standing under
the laws of the Cayman Islands.

 

3.2 The Company has the requisite power and authority to enter into and perform
the transactions contemplated by this Letter Agreement and to issue the Exchange
Shares in accordance with the terms hereof and this Letter Agreement is
enforceable against the Company in accordance with its terms. This Letter
Agreement has been duly executed and delivered by the Company.

 

3.3 The issuance of the Exchange Shares is duly authorized and, upon issuance in
accordance with the terms hereof, the Exchange Shares shall be validly issued,
fully paid and nonassessable Ordinary Shares of the Company and free from all
preemptive or similar rights, taxes, liens and charges with respect to the issue
thereof, with the Holder being entitled to all rights accorded to a holder of
Ordinary Shares. Assuming the truth and accuracy of each of the representations
and warranties of the Holder contained in this Letter Agreement, the issuance by
the Company of the Exchange Shares is exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act’). Upon issuance, the
Exchange Shares shall not bear any restrictive legend and shall be freely
tradable on the NASDAQ Capital Market (the “Principal Market”) pursuant to Rule
144 promulgated under the Securities Act of 1933, as amended.

 

3.4 The execution, delivery and performance of this Letter Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby (including, without limitation, the issuance of the Exchange Shares) will
not (i) result in a violation of the articles of incorporation or bylaws of the
Company or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) in any respect under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any Letter Agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including foreign, federal
and state securities laws and regulations and the rules and regulations of the
Principal Market or any of its subsidiaries or by which any property or asset of
the Company or any of its subsidiaries is bound or affected.

 

3.5 Neither the Company nor any of its subsidiaries is required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court, governmental agency or any regulatory or self-regulatory agency or any
other Person in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Letter Agreement. The Company is not
in violation of the listing requirements of the Principal Market and has no
knowledge of any facts that would reasonably lead to delisting or suspension of
the Ordinary Shares in the foreseeable future. The issuance by the Company of
the Exchange Shares shall not have the effect of delisting or suspending the
Ordinary Shares from the Principal Market.

 

3.6 The Company acknowledges and agrees that the Holder is acting solely in the
capacity of an arm’s length third party with respect to this Letter Agreement
and the transactions contemplated hereby. The Company further acknowledges the
Holder is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Letter Agreement and the transactions
contemplated hereby, and any advice given by the Holder or any of its
representatives or agents in connection with this Letter Agreement is merely
incidental to the Exchange.

 

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3.7 The Company has not paid or given, and has not agreed to pay or give,
directly or indirectly, any commission or other remuneration for soliciting the
Exchange. The Exchange Shares are being issued exclusively for the exchange of
the Warrant and no other consideration has or will be paid for the Exchange
Shares.

 

3.8 The Company has not, nor has any person acting on its behalf, directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the Exchange and the
issuance of the Exchange Shares pursuant to this Letter Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from delivering the Exchange Shares to the
Holder pursuant to Section 3(a)(9) of the Securities Act, nor will the Company
take any action or steps that would cause the Exchange, issuance and delivery of
the Exchange Shares to be integrated with other offerings to the effect that the
delivery of the Exchange Shares to the Holder would be seen not to be exempt
pursuant to Section 3(a)(9) of the Securities Act.

 

3.9 Other than legal counsel, the Company has not engaged any third parties
other than Maxim Group to assist in the solicitation or to advise it with any
aspect of the Exchange. The Company is not now, and following execution of this
Letter Agreement will not be, liable for any brokerage, finder’s or solicitation
fees or commissions of the Holder with respect to the transactions contemplated
by this Letter Agreement

 

3.10 Upon issuance of the Exchange Shares, all share transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the issuance of the Exchange Shares to be exchanged with the Holder
hereunder will be, or will have been, fully paid or provided for by the Company,
and all laws imposing such taxes will be or will have been complied with.

 

3.11 All disclosure provided to the Holder regarding the Company or any of its
subsidiaries, their business and the transactions contemplated hereby, furnished
by or on behalf of the Company is true and correct and does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or any of its
subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so
publicly announced or disclosed.

 

3.12. The Company is not now, and never has been, a “shell” company.

 

3.13 Except with respect to the material terms and conditions of the
transactions contemplated by this Letter Agreement, the Company confirms that
neither it nor any other person acting on its behalf has provided any of the
Holder or their agents or counsel with any information that it believes
constitutes or might constitute material, non-public information.  The Company
shall disclose the Letter Agreement (which shall be filed with the SEC as an
exhibit) and the transaction contemplated in this Letter Agreement in a current
report on Form 8-K or other appropriate SEC filings.

 

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4. By executing this Letter Agreement, the Holder represents and warrants to the
Company that:

 

4.1. The Holder is the beneficial owner and sole legal owner of, and has good
and valid title to, the Warrant, free and clear of any mortgage, lien, pledge,
charge, security interest, encumbrance, title retention agreement, option,
equity or other adverse claim thereto other than encumbrances by one or more
brokers of the Holder, which shall terminate upon the exchange of the Warrant,
and encumbrances under federal or state securities laws (“Claims”). The Holder
has not, in whole or in part, (i) assigned, transferred, hypothecated, pledged
or otherwise disposed of the Warrant or its rights in the Warrant, or (ii) given
any person or entity any transfer order, power of attorney or other authority of
any nature whatsoever with respect to the Warrant. Good and valid title to the
Warrant, free and clear of any Claims, will pass to the Company upon
consummation of the transaction contemplated hereby;

 

4.2. The Holder is not now, and following execution of this Letter Agreement
will not be, liable for any brokerage, finder’s or solicitation fees or
commissions with respect to the transactions contemplated by this Letter
Agreement;

 

4.3. A minimum of twelve months has elapsed since the date that the Warrant was
acquired by the Holder;

 

4.4. The Holder is not currently an “affiliate” of the Company (as defined under
Rule 144 promulgated under the Securities Act of 1933, as amended) and has not
been an affiliate of the Company for the three-month period immediately
preceding the date hereof; and

 

4.5 The Holder will only sell the Exchange Shares pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, an effective
registration statement covering resale of the Exchange Shares or pursuant to any
exemption available under the Securities Act of 1933, as amended

 

 

5. The Company hereby represents and warrants as of the date hereof and
covenants and agrees from and after the date hereof that none of the terms
offered to any Person with respect to any consent, release, amendment,
settlement or waiver relating to the terms, conditions and transactions
contemplated hereby (each a “Settlement Document”), is or will be more favorable
to such Person than those of the Holder and this Letter Agreement. If, and
whenever on or after the date hereof, the Company enters into a Settlement
Document, then (i) the Company shall provide notice thereof to the Holder
immediately following the occurrence thereof and (ii) the terms and conditions
of this Letter Agreement shall be, without any further action by the Holder or
the Company, automatically amended and modified in an economically and legally
equivalent manner such that the Holder shall receive the benefit of the more
favorable terms and/or conditions (as the case may be), provided that upon
written notice to the Company at any time the Holder may elect not to accept the
benefit of any such amended or modified term or condition, in which event the
term or condition contained in this Letter Agreement shall apply to the Holder
as it was in effect immediately prior to such amendment or modification as if
such amendment or modification never occurred with respect to the Holder. The
provisions of this paragraph shall apply similarly and equally to each
Settlement Document.

 

6. Until the first anniversary of the date hereof, the Company will not,
directly or indirectly, effect any offer, sale, grant of any option to purchase,
or other disposition of (or the announcement of any offer, sale, grant of any
option to purchase or other disposition of), by the Company, directly or
indirectly, of any of the Company’s or its subsidiaries’ equity or equity
equivalent securities, including, without limitation, any debt, preferred stock
or other instrument or security that is, at any time during its life and under
any circumstances, convertible into or exchangeable or exercisable for equity or
equity equivalent securities (each, a “Subsequent Placement”) unless the Company
shall have first complied with the participation rights set forth below:

 

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6.1. At least two (2) Business Days prior to any proposed or intended Subsequent
Placement, the Company or its agent shall orally contact the Holder and ask
whether such Holder is willing to agree to receive material non-public
information (each such notice, a “Pre-Notice”), provided that neither the
Company nor its agents shall provide any material, non-public information with
respect to the Company or any of its Subsidiaries to the Holder without the
expressed written consent of the Holder to receive such material, non-public
information. Upon the written request of the Holder no later than one (1)
Business Day after the Holder’s receipt of such Pre-Notice, and only upon a
written request by the Holder, the Company shall promptly, but no later than one
(1) Business Day after such request, deliver to the Holder by facsimile an
irrevocable written notice (the “Offer Notice”) of any proposed or intended
issuance or sale or exchange (the “Offer”) of the securities being offered (the
“Offered Securities”) in a Subsequent Placement within one (1) Business Day of
the determination of the terms of such Subsequent Placement, which Offer Notice
shall (w) identify and describe the Offered Securities, (x) describe the price
and other final terms upon which they are to be issued, sold or exchanged, and
the number or amount of the Offered Securities to be issued, sold or exchanged,
(y) identify the persons or entities (if known) to which or with which the
Offered Securities are to be offered, issued, sold or exchanged and (z) offer to
issue and sell to or exchange with the Holder (which offer being
non-transferable to any successor to the Holder) a pro rata portion of at least
35% of the Offered Securities allocated among the Holder and each other holder
of Warrants immediately prior to the date hereof (solely to the extent such
other holder of Warrants enters into an agreement identical to the form hereof
(other than proportional adjustments for the amount of Warrants being exchanged)
(such agreement, each an “Other Exchange Letter Agreement”, each such holder of
Warrants, each, an “Other Warrant Holder”, and such Warrants of such Other
Warrant Holder together with the Warrant of the Holder, collectively, the
“Exchange Warrants”) (I) based on the Holder’s pro rata portion of the Ordinary
Shares issuable upon exercise of the Exchange Warrants (without regard for any
limitations on exercise set forth therein) immediately prior to the date hereof
(the “Basic Amount”), and (II) if the Holder elects to purchase its Basic
Amount, any additional portion of the Offered Securities attributable to the
Basic Amounts of the Other Exchange Warrant Holders as the Holder shall indicate
it will purchase or acquire should the Other Exchange Warrant Holders subscribe
for less than their Basic Amounts (the “Undersubscription Amount”).

 

6.2. To accept an Offer, in whole or in part, the Holder must deliver a written
notice to the Company prior to the end of the third (3rd) full Business Day
after the Holder’s receipt of the Offer Notice (for purposes of this section
6.2, receipt of the Offer Notice shall not be deemed to have occurred until the
Holder shall have physically received such Offer Notice) (the “Offer Period”),
setting forth the portion of the Holder’s Basic Amount that the Holder elects to
purchase and, if the Holder shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that the Holder elects to purchase (in either
case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by the
Holder and all Other Exchange Warrant Holders are less than the total of all of
the Basic Amounts, then, if the Holder has set forth an Undersubscription Amount
in its Notice of Acceptance, the Holder shall be entitled to purchase, in
addition to the Basic Amounts subscribed for, the Undersubscription Amount it
has subscribed for; provided, however, that if the Undersubscription Amounts
subscribed for exceed the difference between the total of all the Basic Amounts
and the Basic Amounts subscribed for (the “Available Undersubscription Amount”),
if the Holder has subscribed for any Undersubscription Amount, then the Holder
shall be entitled to purchase only that portion of the Available
Undersubscription Amount as the Basic Amount of the Holder bears to the total
Basic Amounts of all Other Exchange Warrant Holders that have subscribed for
Undersubscription Amounts, subject to rounding by the Company to the extent it
deems reasonably necessary.

 

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6.3. The Company shall have ten (10) Business Days from the expiration of the
Offer Period above to offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Holder (the “Refused Securities”), but only to the offerees described in the
Offer Notice (if so described therein) and only upon terms and conditions
(including, without limitation, unit prices and interest rates) that are not
more favorable to the acquiring Person or Persons or less favorable to the
Company than those set forth in the Offer Notice.

 

6.4. In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 14(c) above), then the Holder may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified in
its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that the Holder elected to purchase pursuant to
section 6.2 above multiplied by a fraction, (i) the numerator of which shall be
the number or amount of Offered Securities the Company actually proposes to
issue, sell or exchange (including Offered Securities to be issued or sold to
the Holder pursuant to section 6.3 above prior to such reduction) and (ii) the
denominator of which shall be the original amount of the Offered Securities. In
the event that the Holder so elects to reduce the number or amount of Offered
Securities specified in its Notice of Acceptance, the Company may not issue,
sell or exchange more than the reduced number or amount of the Offered
Securities unless and until such securities have again been offered to the
Holder in accordance with section 6.2 above.

 

6.5. Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Holder shall acquire from the Company, and the
Company shall issue to the Holder, the number or amount of Offered Securities
specified in the Holder’s Notice of Acceptance, as reduced pursuant to section
6.3 above if the Holder has so elected, upon the terms and conditions specified
in the Offer. The purchase by the Holder of any Offered Securities is subject in
all cases to (i) the preparation, execution and delivery by the Company and the
Holder of a purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to the Holder and its respective counsel (the
“Subsequent Placement Agreement”), (ii) the Holder’s satisfaction, in its sole
discretion, with the final terms and/or conditions that differ from those
contained in the Offer Notice, and (iii) the Holder’s reasonable satisfaction
with the identity of the other Persons to which the Offered Securities will be
sold.

 

6.6. Any Offered Securities not acquired by the Holder or other Persons in
accordance with this paragraph may not be issued, sold or exchanged until they
are again offered to the Holder under the procedures specified in this Letter
Agreement.

 

6.7. The Company and the Holder agree that if the Holder elects to participate
in the Offer, without the written consent of the Holder, neither the Subsequent
Placement Agreement with respect to such Offer nor any other transaction
documents related thereto shall include any term or provision whereby the Holder
shall be required to agree to any restrictions on trading as to any securities
of the Company with respect to any period after the public announcement of such
Subsequent Placement beyond those restrictions on the transfer or sale of the
securities purchased in such Subsequent Placement agreed to by other purchasers
in such Subsequent Placement or be required to consent to any amendment to or
termination of, or grant any waiver or release under or in connection with, any
agreement previously entered into with the Company or any instrument received
from the Company.

 

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6.8. The restrictions contained in this paragraph shall not apply in respect of
the issuance of (i) Ordinary Shares or standard options to purchase Ordinary
Shares to directors, officers or employees of the Company in their capacity as
such pursuant to an Approved Stock Plan (as defined below), provided that the
exercise price of any such options is not lowered, none of such options are
amended to increase the number of shares issuable thereunder and none of the
terms or conditions of any such options are otherwise materially changed in any
manner that adversely affects the Holder; (ii) Ordinary Shares issued upon the
conversion or exercise of Convertible Securities (as defined below) (other than
standard options to purchase Ordinary Shares issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) issued prior to the date
hereof, provided that the conversion price of any such Convertible Securities
(other than standard options to purchase Ordinary Shares issued pursuant to an
Approved Stock Plan that are covered by clause (i) above) is not lowered, none
of such Convertible Securities (other than standard options to purchase Ordinary
Shares issued pursuant to an Approved Stock Plan that are covered by clause (i)
above) are amended to increase the number of shares issuable thereunder and none
of the terms or conditions of any such Convertible Securities (other than
standard options to purchase Ordinary Shares issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) are otherwise materially
changed in any manner that adversely affects the Holder; (iii) Ordinary Shares
issued in connection with strategic mergers and acquisitions, provided that (I)
the primary purpose of such issuance is not to raise capital, (II) the acquirer
of such Ordinary Shares in such issuance solely consists of either (1) the
actual owners of such assets or securities acquired in such merger or
acquisition or (2) the stockholders, partners or members of the foregoing
Persons, (III) the number or amount (as the case may be) of such Ordinary Shares
issued to each such Person by the Company is not disproportionate to such
Person’s actual ownership of such assets or securities to be acquired by the
Company (as applicable) and (IV) all such issuances of Ordinary Shares after the
date hereof pursuant to this clause (iii) do not, in the aggregate, exceed more
than 5,000,000 Ordinary Shares (adjusted for stock splits, stock combinations
and other similar transactions occurring after the date of this Agreement); (iv)
Ordinary Shares issued in connection with any at-the-market offering by the
Company; (v) Ordinary Shares issuable upon exchange of the a warrant to purchase
54,650 Ordinary Shares issued to the Jian Ke pursuant to an agreement between
the Company and FT Global Capital, Inc. dated October 18, 2013; and (vi) the
Exchange Shares.

 

6.9. For the purpose of this Letter Agreement, the following definitions shall
apply:

 

“Approved Stock Plan” means any employee benefit plan which has been approved by
the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which Ordinary Shares and standard options to purchase Ordinary
Shares may be issued to any employee, officer or director for services provided
to the Company in their capacity as such.

 

“Convertible Securities” means any capital stock or other security of the
Company or any of its Subsidiaries that is at any time and under any
circumstances directly or indirectly convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any
capital stock or other security of the Company (including, without limitation,
Ordinary Shares) or any of its Subsidiaries.

 

7. Miscellaneous

   

7.1 Except as expressly provided otherwise herein, this Letter Agreement may not
be amended, waived, discharged or terminated other than by a written instrument
referencing this Letter Agreement and signed by the Company and the Holder.

 

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7.2 This Letter Agreement and all actions arising out of or in connection with
this Letter Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law provisions
of the State of New York or of any other state.

 

7.3 The representations, warranties, covenants and agreements made herein shall
survive the execution and delivery of this Letter Agreement.

 

7.4 The rights and obligations of the Company and Investor shall be binding upon
and benefit the successors, assigns, heirs, administrators and transferees of
the parties.

 

7.5 The rights, interests or obligations hereunder may not be assigned, by
operation of law or otherwise, in whole or in part, by the Company without the
prior written consent of Investor.

 

7.6 This Letter Agreement constitutes and contains the entire agreement among
the Company and Investor regarding the subject matter hereof and supersedes any
and all prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof.

 

7.7 If any provision of this Letter Agreement shall be judicially determined to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

 

7.8 This Letter Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together will constitute the
same agreement.  Electronic copies of signed signature pages will be deemed
binding originals.

 

If you have any questions regarding this Letter Agreement, please contact Liu
Jia, the Chief Financial Officer of the Company, at info@recon.cn or Sarah
Williams of Ellenoff Grossman & Schole LLP at (212) 370-1300 or
swilliams@egsllp.com.

 

 

[Signature Page to Follow]

 

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  Respectfully,         Recon Technology, Ltd.               By: /s/ Shenping
Yin   Name: Shenping Yin   Title: CEO

 

Acknowledged and accepted:         By: /s/ Jian Ke   Name: Jian Ke  

 

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