Form of] INVESTOR RIGHTS AGREEMENT
Exhibit
10.4
THIS
INVESTOR RIGHTS AGREEMENT
(this “Agreement”)
is made as of the [__] day of [_____________], 2005 by and among Millennium Cell
Inc., a Delaware corporation (the “Company”),
and The Dow Chemical Company, a Delaware corporation (“Investor”).
RECITALS
WHEREAS,
the Company and the Investor are parties to that certain Stock Purchase
Agreement dated February 27, 2005 (the “Purchase
Agreement”),
pursuant to which, among other things, at the First Closing (as defined in the
Purchase Agreement) the parties hereto are to enter into this Agreement;
and
WHEREAS,
the First Closing has occurred and, simultaneously therewith, the parties hereto
are entering into this Agreement pursuant to the Purchase
Agreement;
NOW,
THEREFORE,
in consideration of the mutual covenants set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. Definitions. For
purposes of this Agreement:
1.1. “Affiliate”
means with respect to any individual, corporation, partnership, association,
trust, or any other entity (in each case, a “Person”),
any Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person, including, without limitation any general
partner, officer or director of such Person; provided,
however,
that the Investor shall not be deemed an Affiliate of the Company.
1.2. “Board”
means the Board of Directors of the Company.
1.3. “Common
Stock”
means the Company’s common stock, par value $0.001 per share.
1.4.
“Current Market Capitalization” means, as of any date, the product of (x) the
number of shares of Common Stock outstanding (determined on a Fully Diluted
Basis) multiplied by (y) the VWAP for the thirty (30)-trading day period
immediately preceding such date.
1.5.
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
1.6.
“Fully
Diluted Basis”
means, as of any date, on a fully diluted basis, as if (i) all shares of
Preferred Stock, evidences of indebtedness, shares or other securities
convertible into or exchangeable for Common Stock had been fully converted into
or exchanged for shares of Common Stock and (ii) any outstanding warrants,
options or other rights to acquire shares of capital stock or convertible
securities (the securities described in clauses (i) and (ii) being hereinafter
referred to as “Common
Stock Equivalents”)
had been fully exercised (and the resulting securities fully converted into
shares of Common Stock), but excluding any Common Stock Equivalents having an
exercise, strike or conversion price in excess of the VWAP for the thirty (30)
trading day period immediately preceding the date of such
determination.
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1.7. “GAAP”
means generally accepted accounting principles.
1.8. “Initial
Series A Liquidation Value”
has the meaning set forth in the Purchase Agreement.
1.9. “Initial
Series B Liquidation Value”
has the meaning set forth in the Purchase Agreement.
1.10. “Joint
Development Agreement”
means that Joint Development Agreement between Millennium Cell Inc. and The Dow
Chemical Company entered into as of the date hereof.
1.11.
“Minimum
Series B Investment”
means, with respect to each Closing (as defined in the Purchase Agreement), the
payment by the Investor to the Company of at least $1,250,000 in exchange for
Series B Preferred Stock at such Closing, subject to the terms of the Purchase
Agreement.
1.12.
“New
Securities”
means equity securities of the Company, whether now authorized or not, or
rights, options, or warrants to purchase said equity securities, or securities
of any type whatsoever that are, or may become, convertible into or exchangeable
into or exercisable for said equity securities.
1.13. “Preferred
Stock”
means the Series A Preferred Stock and Series B Preferred Stock.
1.14. “Put
Period”
means that period of time from and after the date that the Investor has made the
first Minimum Series B Investment under the Purchase Agreement and for so long
as (i) the Investor holds 5% or more of the outstanding shares of Common Stock
(determined on a Fully Diluted Basis) and (ii) the Investor has not terminated
the Joint Development Agreement without Cause (as defined in the Joint
Development Agreement) pursuant to Section 11.3 of the Joint Development
Agreement.
1.15. “Put
Triggering Event”
means the occurrence of any of the following: (i) the discontinuance of the
Company’s development activities targeting sub-50 watt power systems;
(ii) the incurrence by the Company of indebtedness for borrowed money
(including, without limitation, debt hybrid instruments convertible into equity
and similar financing arrangements and guaranties of the obligations of others)
outstanding at any one time in excess of 50% of the Current Market
Capitalization; (iii) the acquisition by the Company of assets, business
operations or securities of a Person not engaged in the delivery of sub-50 watt
power systems whereby the consideration paid in such acquisition is in excess of
50% of the Current Market Capitalization; or (iv) the sale, license or
other transfer of exclusive rights to any of the Company’s intellectual property
(including, without limitation, the MCEL Contributed Intellectual Property (as
defined in the Joint Development Agreement) and the JDA Intellectual Property
(as defined in the Joint Development Agreement) necessary for the Company’s use
of sub-50 watt power systems.
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1.16. “Series
A Preferred Stock” means
the Company’s Series A Convertible Preferred Stock, with the powers, preferences
and special rights set forth in the Series A Certificate of
Designation.
1.17. “Series
B Preferred Stock”
means the Company’s Series B Convertible Preferred Stock,
with the powers, preferences and special rights set forth in the Series B
Certificate of Designation.
1.18. “Trading
Market”
means any of the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or the Nasdaq Smallcap Market.
1.19. “Transaction
Agreements”
means this Agreement, the Purchase Agreement, the Joint Development Agreement,
the Cross Licensing Agreement, the Registration Rights Agreement, the Standstill
Agreement, all MFN Licenses (as defined in the Cross Licensing Agreement, if
any, the Patent Assignment Agreement and the Note).
1.20. “VWAP”
shall mean, with respect to any date on which a determination is required, (i)
if the security is listed for trading on any Trading Market, a price, rounded to
the nearest cent, equal to (A) the sum of the following product determined for
each trading day in the specified number of consecutive trading days: (1) the
last sale price of the security during normal business hours on a specific
trading day as finally reported by the Trading Market, multiplied by (2) the
number of shares of the security that were traded on such trading day on the
Trading Market, divided by (B) the aggregate number of shares of the security
that were traded on such trading days, and (ii) if the security is not listed
for trading on any Trading Market on the date of such calculation (or on any
trading day during the relevant number of trading days immediately preceding the
date of such determination), the fair market value of the security determined
pursuant to an appraisal process mutually satisfactory to the Company and the
Investor.
1.21. “Warrant”
means any warrants convertible into shares of Common Stock issued to Investor by
the Company pursuant to the Purchase Agreement.
2. Information
and Observer Rights.
2.1. Delivery
of Financial Statements.
For so long as the Investor holds 5% or more of the outstanding shares of Common
Stock (determined on a Fully Diluted Basis), the
Company shall deliver to the
Investor:
(a) as
soon as practicable, but in any event within ninety (90) days after the end of
each fiscal year of the Company, the Company’s audited balance sheet and income
statement as of the last day of such year, a statement of cash flows for such
year and a schedule as to the sources and applications of funds for such year,
such year-end financial reports to be in reasonable detail, prepared in
accordance with GAAP and a copy of the letter to management from the Company’s
independent public accountants selected by the Board, unless such information is
made publicly available by filing with the Securities and Exchange Commission on
XXXXX;
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(b) as
soon as practicable, but in any event within forty-five (45) days after the end
of each of the first three (3) quarters of each fiscal year of the Company, an
unaudited income statement, a schedule as to the sources and applications of
funds for such fiscal quarter, an unaudited balance sheet, a statement of
stockholder’s equity as of the end of such fiscal quarter;
(c) as
soon as practicable, but in any event promptly after the Board’s approval
thereof, an annual budget and business plan for the next fiscal year
(collectively, the “Budget”)
prepared by the Company; and
(d) simultaneously
with the delivery thereof to the Company’s lenders and debt holders, such other
information relating to the financial condition, business, prospects, operations
or corporate affairs of the Company that the Company has delivered to its
lenders and debt holders.
(e) as
soon as practicable, but in any event within forty-five (45) days after the end
of each quarter of each fiscal year of the Company, a statement showing the
number of shares of each class and series of capital stock and securities
convertible into or exercisable for shares of capital stock outstanding at the
end of the period, the number of common shares issuable upon conversion or
exercise of any outstanding securities convertible or exercisable for common
shares and the exchange ratio or exercise price applicable thereto and number of
shares of issued stock and stock options not yet issued but reserved for
issuance, if any, all in sufficient detail as to permit the Investor to
calculate its percentage equity ownership in the Company and certified by the
Chief Financial Officer or Chief Executive Officer of the Company as being true,
complete and correct.
2.2. Confidentiality.
At such time as Investor holds 5% or more of the outstanding shares of Common
Stock (determined on a Fully Diluted Basis), the Company and Investor shall
enter into a mutually-satisfactory confidentiality agreement, which
confidentiality agreement shall be sufficient to comply with requirements of
Regulation FD under the Exchange Act and preserve the attorney-client privilege
and work product privilege, if any, between the Company and its counsel and
shall provide that Investor will cause the Investor Observer to comply with such
confidentiality agreement.
2.3. Inspection.
The Company shall The Company shall permit the Investor, at the Investor’s
expense, to visit and inspect the Company’s properties, to examine its books of
accounts and financial records and to discuss the Company’s affairs, finances
and accounts with its officers, all at such reasonable times during normal
business hours as may be reasonably requested in advance by the Investor;
provided,
however,
that the Company shall not be obligated pursuant to this Section 2.3 to provide
access to any information which would adversely affect the attorney client
privilege between the Company and its counsel or to provide access to documents
or other information which is covered by confidentiality
agreements..
2.4.
Observer Rights.
For so long as the Investor holds 5% or more of the outstanding shares of Common
Stock (determined on a Fully Diluted Basis), the Investor will have the right to
designate one (1) natural Person to serve as an observer at meetings of the
Board and all committees thereof (the “Investor
Observer”).
The initial Investor Observer shall be the Director of Natural Resources of the
Investor; provided,
however,
the Investor shall have the right to replace the Person serving as Investor
Observer from time to time at its sole discretion. The Company shall give the
Investor Observer copies of all notices, minutes, consents and other materials
that it provides to its directors at the same time and in the same manner as
provided to its directors; provided however that the Company shall not be
obligated to give the Investor Observer any documents if to do so would cause
such document to not be subject to the attorney-client privilege or work product
privilege. The Investor Observer shall treat and hold all such information
received pursuant to this Section 2.3
in confidence in accordance with the confidentiality agreement contemplated by
Section 2.2
hereof. The Company hereby agrees to indemnify and hold harmless the Investor
Observer to the same extent and in the same manner as the Company indemnifies
its non-employee Directors.
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3. Right
to Maintain Ownership.
3.1. Subsequent
Offerings.
Subject to the terms and conditions specified in this Section 3.1
and applicable securities laws, in the event the Company issues any New
Securities, the Company shall, prior to such issuance, make an offering of such
New Securities to the Investor in accordance with the following provisions of
this Section
3.1.
(a) The
Company shall deliver a notice (the “Offer
Notice”)
to the Investor stating (i) its intent to issue New Securities,
(ii) the number of such New Securities to be offered, and (iii) the
price and terms upon which it proposes to offer such New
Securities.
(b) By
written notification received by the Company, within ten (10) Business Days
after receipt of the Offer Notice, the Investor may elect to purchase or obtain,
at the price and on the terms specified in the Offer Notice, not less than that
portion of such New Securities which equals the proportion that the number of
shares of Common Stock (including the number of shares of Common Stock into
which the Investor’s shares of Preferred Stock could be converted) then held by
the Investor bears to the total number of shares of Common Stock of the Company
then outstanding (on a Fully Diluted Basis) (the “Proportionate
Share”).
(c) If
the Investor elects not to purchase or obtain at least its Proportionate Share
of all New Securities referred to in the Offer Notice as provided in
Section 3.1(b)
hereof, the Company may, during the sixty (60) day period following the
expiration of the period provided in Section 3.1(b)
hereof, offer such New Securities (collectively, the “Refused
Securities”)
to any Person at a price not less than, and upon terms no more favorable to the
offeree than, those specified in the Offer Notice. If the Company does not enter
into an agreement for the sale of the New Securities within such period, or if
such agreement is not consummated within sixty (60) days of the execution
thereof, the right provided hereunder shall be deemed to be revived and the
Company shall offer the Investor the right to purchase at least its
Proportionate Share of such New Securities in accordance with this Section 3.1.
(d) The
Investor’s right to maintain ownership as provided in this Section
3.1
shall not be applicable to (i) any securities to be issued to employees,
officers or directors of, or consultants or advisors to, the Company pursuant to
stock purchase or stock option plans or other arrangements that are for purposes
of compensation to such person in their
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capacity
as employees, officers, directors, consultants or advisors and are approved by
the Board, subject to a maximum of the lower of (x) 4,000,000 shares of
Common Stock (as adjusted by stock dividends, splits, subdivisions or
combinations of shares and on an as-converted basis) and (y) 10% of the
outstanding shares of Common Stock (determined on a Fully Diluted
Basis), (ii)
any securities of any class or series issued or to be issued pursuant to any
convertible debentures, options or warrants outstanding as of the date of the
Joint Development Agreement; (iii) any securities of any class or series issued
or to be issued pursuant to the conversion or exercise of any securities issued
in connection with the Joint Development Agreement; (iv) any securities issued
for consideration other than cash pursuant to a merger, consolidation,
acquisition or similar business combination, subject to a maximum of the lower
of (x) 2,000,000 shares of Common Stock (as adjusted by stock dividends,
splits, subdivisions or combinations of shares and on an as-converted basis) and
(y) 5% of the outstanding shares of Common Stock (determined on a Fully
Diluted Basis); or (v) any securities issued in connection with any stock split,
stock dividend, recapitalization or similar transaction by the
Company
;
provided,
however,
the exceptions to Section
3.1
contained in clause (i) and clause (iv) of this paragraph shall no longer be
available to the Company if, after the date hereof, the Company issues Limited
Issuance Shares (as defined below) in an aggregate amount equal to or greater
than the lower of (x) 5,000,000 shares of Common Stock (as adjusted by stock
dividends, splits, subdivisions or combinations of shares and on an as-converted
basis) and (y) 12.5% of the outstanding shares of Common Stock (determined on a
Fully Diluted Basis).
The
term “Limited
Issuance Shares”
means either (x) shares of Common Stock or (y) the maximum number of
shares of Common Stock issuable upon conversion, exchange or exercise of Common
Stock Equivalents:
(a) issued
to employees, officers or directors of, or consultants or advisors to, the
Company pursuant to stock purchase or stock option plans or other arrangements
that are for purposes of compensation to such persons in their capacity as
employees, officers, directors, consultants or advisors and are approved by the
Board, subject to an aggregate maximum of the lower of (x) 4,000,000 shares of
Common Stock (as adjusted by stock dividends, splits, subdivisions or
combinations of shares and on an as-converted basis) and (y) 10% of the
outstanding shares of Common Stock (determined on a Fully Diluted Basis);
(b) issued
for consideration other than cash pursuant to a merger, consolidation,
acquisition or similar business combination, subject to an aggregate maximum of
the lower of (x) 2,000,000 shares of Common Stock (as adjusted by stock
dividends, splits, subdivisions or combinations of shares and on an as-converted
basis) and (y) 5% of the outstanding shares of Common Stock (determined on a
Fully Diluted Basis);
(c) issued
as consideration, whether in whole or in part, to any person or entity for
providing services or supplying goods to the Company, subject to an aggregate
maximum of the lower of (x) 2,000,000 shares of Common Stock (as adjusted by
stock dividends, splits, subdivisions or combinations of shares and on an
as-converted basis) and (y) 5% of the outstanding shares of Common Stock
(determined on a Fully Diluted Basis);
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(d) issued
to any entity which is or will be, itself or through its subsidiaries or
affiliates, an operating company in a business related to or complementary with
the business of the Company and in which the Company receives reasonably
material benefits in addition to the investment of funds, subject to an
aggregate maximum of the lower of (x) 2,000,000 shares of Common Stock (as
adjusted by stock dividends, splits, subdivisions or combinations of shares and
on an as-converted basis) and (y) 5% of the outstanding shares of Common Stock
(determined on a Fully Diluted Basis);
(e) issued
pursuant to any equipment leasing arrangement, subject to an aggregate maximum
of the lower of (x) 2,000,000 shares of Common Stock (as adjusted by stock
dividends, splits, subdivisions or combinations of shares and on an as-converted
basis) and (y) 5% of the outstanding shares of Common Stock (determined on a
Fully Diluted Basis); and
(f) issued
to pay all or a portion of any investment banking, finders or similar fee or
commission, which entitles the holders thereof to acquire shares of Common Stock
at a price not less than the market price of the Common Stock on the date of
such issuance and which is not subject to any adjustments other than on account
of stock splits and reverse stock splits, subject to an aggregate maximum of the
lower of (x) 2,000,000 shares of Common Stock (as adjusted by stock dividends,
splits, subdivisions or combinations of shares and on an as-converted basis) and
(y) 5% of the outstanding shares of Common Stock (determined on a Fully Diluted
Basis).
4. Investor
Put Option.
4.1. Put
Rights.
Subject to Section
4.2,
upon the occurrence of a Put Triggering Event during the Put Period, the
Investor will have the right to require the Company to purchase all or any
portion of the Preferred Stock and Common Stock held by the Investor (including
without limitation any Common Stock held by Investor by virtue of its exercising
of any Warrants) (the “Put
Right”)
at a price equal to the greater of (x) the aggregate Initial Series A
Liquidation Value plus the aggregate Initial Series B Liquidation Value plus the
purchase price paid by the Company in connection with the exercise of any such
Warrants, in each to the extent such securities are subject to the Put Right,
and (y) an amount equal to the number of shares of Common Stock (on an
as-converted basis) that are subject to the Put Right multiplied the VWAP for
the thirty (30)-trading day period immediately preceding such date (the
“Put
Purchase Price”).
4.2. Notices.
(a) At
least thirty (30) days prior to any occurrence of a Put Triggering Event, the
Company may deliver a written request to the Investor describing in reasonable
detail a specific Put Triggering Event that the Company intends to engage in and
requesting that the
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Investor
not exercise its Put Right upon the occurrence of the specified Put Triggering
Event (the “Company
Request”).
If the Investor does not respond in writing to a Company Request within thirty
(30) days after receipt by the Investor thereof, the Investor shall not have a
Put Right in respect of the Put Triggering Event specified in such Company
Request. If the Investor agrees in writing to the request summarized in the
Company Request, then the Investor shall not have a Put Right in respect of the
Put Triggering Event specified in such Company Request. If the Investor does not
agree in writing to the request summarized in the Company Request, then the
Investor shall have a Put Right in respect of the Put Triggering Event specified
in such Company Request.
(b) Within
five (5) Business Days after the occurrence of a Put Triggering Event, the
Company shall provide written notice to the Investor that a Put Triggering Event
has occurred (the “Put
Notice”).
If the Investor does not give written notice to the Company of the Investor’s
exercise of the Put Right within thirty (30) calendar days after the date that
the Company has furnished a Put Notice, then the Investor shall not have a Put
Right in respect of such Put Triggering Event.
4.3. Payment
of the Put Purchase Price.
The Company shall pay to the Investor the Put Purchase Price as follows:
(a) 25%
of the Put Purchase Price shall be paid by the Company to the Investor promptly
upon the Investor’s exercise of the Put Right, but in no event more than five
(5) Business Days thereafter (the “Initial
Put Payment”);
and
(b) simultaneously
upon the payment of the Initial Put Payment, the Company shall execute and
deliver a promissory note substantially in the form of Exhibit
A
hereto (the “Note”),
which Note shall provide for the payment of the remaining Put Purchase Price in
accordance with the following schedule: (i) 25% of the Put Purchase Price (plus
interest thereupon at a rate of 12% per annum) shall be paid by the Company to
the Investor within one hundred eighty (180) days of the Investor’s exercise of
the Put Right; and (ii) 5% of the Put Purchase Price (plus interest thereupon at
a rate of 12% per annum) shall be paid by the Company to the Investor on each
succeeding ninety (90) day anniversary of the Investor’s exercise of the Put
Right until the Put Purchase Price has been paid in full, which in no event
shall be later than the third anniversary of the Company’s receipt of the Put
Notice.
5. Miscellaneous.
5.1. Transfer;
Successors and Assigns.
No party shall assign any rights or obligations under this Agreement without the
prior written consent of the other party, provided,
however,
that the Investor may assign any and all rights and obligations under this
Agreement to any of its Affiliates. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.
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5.2. Governing
Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware without regard to its principles of conflicts of
laws.
5.3. Counterparts.
This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. This Agreement may also be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
5.4. Construction
of Certain Terms.
The titles of the articles, sections, and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement. Wherever the words “including,” “include” or “includes” are used in
this Agreement, they shall be deemed followed by the words “without limitation.”
References to any gender shall be deemed to mean any gender. The parties hereto
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
5.5. Notices.
All notices and other communications given or made pursuant to this Agreement
shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed electronic mail
or facsimile if sent during normal business hours of the recipient, and if not
so confirmed, then on the next business day, (c) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the address or facsimile number set forth below
or to such other address or facsimile number as delivered by notice to the other
in accordance with this Section
5.5:
If
to the Company:
0
Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
Attention:
President
Facsimile:
(000) 000-0000
With
a copy to:
Dickstein,
Shapiro, Xxxxx & Xxxxxxxx LLP
0000
X Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000-0000
Attention:
Xxxx Xxxxxxxxx
Facsimile:
202.887.0689
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If
to Purchaser:
If
to Dow:
The
Dow Chemical Company
0000
Xxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Director, Natural Resources Platform, Dow Ventures
Facsimile:
989.638.7133
With
a copy to:
The
Dow Chemical Company
0000
Xxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Business Counsel, Dow Ventures
Facsimile:
989.636.7594
King
& Spalding LLP
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxxx Xxxxxxx
Facsimile:
202.626.3737
5.6. Fees
and Expenses.
The Company and the Investor shall each pay its own costs and expenses in
connection with its performance of this Agreement.
5.7. Amendments
and Waivers.
Neither this Agreement nor any term of this Agreement may be amended, terminated
or waived without the written consent of the Company and the Investor. Any
amendment or waiver effected in accordance with this Section 5.7
shall be binding upon the Investor and each transferee of the securities, each
future holder of all such securities, and the Company.
5.8. Severability.
The invalidity of unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
5.9. Delays
or Omissions.
No delay or omission to exercise any right, power or remedy accruing to any
party under this Agreement, upon any breach or default of any other party under
this Agreement, shall impair any such right, power or remedy of such
non-breaching or non-defaulting party nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach or default under
this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
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5.10. Entire
Agreement.
This Agreement (including the Exhibits hereto) and the other Transaction
Agreements constitute the full and entire understanding and agreement between
the parties with respect to the subject matter hereof, and any other written or
oral agreement relating to the subject matter hereof existing between the
parties are expressly canceled.
5.11. Dispute
Resolution.
Any unresolved controversy or claim arising out of or relating to this
Agreement, except as (a) otherwise provided in this Agreement, or
(b) any such controversies or claims arising out of either party’s
intellectual property rights for which a provisional remedy or equitable relief
is sought, shall be submitted to arbitration by one arbitrator mutually agreed
upon by the parties, and if no agreement can be reached within 30 days after
names of potential arbitrators have been proposed by the American Arbitration
Association (the “AAA”),
then by one arbitrator having reasonable experience in corporate finance
transactions of the type provided for in this Agreement and who is chosen by the
AAA. The arbitration shall take place in the District of Columbia, in accordance
with the AAA rules then in effect, and judgment upon any award rendered in such
arbitration will be binding and may be entered in any court having jurisdiction
thereof. There shall be limited discovery prior to the arbitration hearing as
follows: (a) exchange of witness lists and copies of documentary evidence and
documents relating to or arising out of the issues to be arbitrated,
(b) depositions of all party witnesses and (c) such other depositions as
may be allowed by the arbitrators upon a showing of good cause. Depositions
shall be conducted in accordance with the Federal Rules of Civil Procedure, the
arbitrator shall be required to provide in writing to the parties the basis for
the award or order of such arbitrator, and a court reporter shall record all
hearings, with such record constituting the official transcript of such
proceedings. The arbitrator shall award reasonable attorney’s fees, costs, and
necessary disbursements in addition to any other relief to which the arbitrator
determines a party to be entitled. Each of the parties to this Agreement
consents to personal jurisdiction for any equitable action sought in the U.S.
District Court for the District of Columbia or any court of the District of
Columbia having subject matter jurisdiction.
IN
WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as of
the date first above written.
By:
Name:
Title:
THE
DOW CHEMICAL COMPANY:
By:
Name:
Title:
11
