Contract
Exhibit
10.2
NEITHER
THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
(A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND, TO THE EXTENT
REQUIRED, ANY APPLICABLE STATE SECURITIES LAWS OR (B) UPON DELIVERY OF AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE.
CONVERTIBLE
PROMISSORY NOTE
HORIZON
FUEL CELL TECHNOLOGIES PTE LTD.
Due
November 18, 2007
U.S.
$5,000,000 October 19, 2007
Horizon
Fuel Cell Technologies Pte
Ltd., a company limited by shares duly organized and existing under the laws
of
the Republic of Singapore (herein referred to as the “Company”) for value
received, hereby promises to pay to Millennium Cell Inc. or its permitted
assigns (the “Holder”), the principal sum of FIVE MILLION U.S. DOLLARS
($5,000,000) (the “Principal Amount”) on November 18, 2007 (subject to
acceleration as provided herein, the “Maturity Date”) in the manner set
forth herein.
PREAMBLE
WHEREAS,
on the date hereof, the
Company and the Holder have entered into a Securities Purchase and Sale
Agreement (the “Agreement”), whereby (i) the Holder has agreed to issue
to the Company a number of shares of the Holder’s common stock, par value $0.001
per share with an agreed value of U.S. $5,000,000 and (ii) the Company has
agreed to issue to the Holder and the Holder has agreed to accept this
Convertible Promissory Note (this “Note”) which, subject to the Horizon
Shareholder Approval, shall be automatically convertible into a number of the
Company’s ordinary shares of S$1.00 each in the share capital (“Horizon
Ordinary Shares”) with an agreed value of U.S. $5,000,000;
WHEREAS,
the issuance by the Company of
the Horizon Ordinary Shares to the Holder upon conversion of this Note requires
the Horizon Shareholder Approval; and
WHEREAS,
capitalized terms used and not
otherwise defined herein shall have the meanings assigned to such terms in
the
Agreement.
Section
1 Payment
of Principal Amount. The Principal Amount shall be payable in
full on the Maturity Date, unless the Conversion Date occurs on or prior to
the
Maturity Date. All sums payable hereunder shall be payable in lawful
money of the United States of America, to the Holder. If any
withholding or other taxes are imposed on the payment of any sums hereunder,
the
Company shall pay such additional amounts to the Holder as are necessary for
the
Holder to receive the entire Principal Amount.
Section
2 Automatic
Conversion of Note into Horizon Shares. This Note shall
automatically, and without action on the part of the Holder, be converted into
an aggregate of 33,740 Horizon Ordinary Shares (which number of Horizon Ordinary
Shares is subject to ratable adjustment for any stock split, stock dividend,
reverse stock split, subdivision, combination, capital reorganization or
reclassification, or any other similar change in the capitalization of the
Company effected during the period commencing on the date hereof and ending
on
the Conversion Date (as defined below)) (the “Horizon Shares”) on the
date the Horizon Shareholder Approval is obtained (the “Conversion
Date”), provided that the Conversion Date occurs on or prior to the Maturity
Date. As promptly as practicable after the Conversion Date, but in no
event later than five (5) Business Days after the later of (x) the Conversion
Date and (y) the date upon which the Holder shall have delivered to the Company
such documents as the Company shall have reasonably requested from the Holder
which are necessary to register the Holder as a shareholder of the Company
(such
date, the “Settlement Date”) (i) the Company shall issue to the Holder a
certificate representing the Horizon Shares registered in the name of the Holder
and endorsed with the legend referenced in Section 3.8 of the Agreement
and (ii) the Holder shall surrender this Note to the Company for
cancellation. Notwithstanding the foregoing, as of the Conversion
Date, the right of the Holder to receive the Principal Amount shall cease and
the Holder shall be deemed to have become the holder of record of the Horizon
Shares. The Company covenants that it will (i) at all times reserve
and keep available out of its authorized share capital, a sufficient number
of
Horizon Ordinary Shares for issuance upon conversion of this Note, (ii) upon
issuance of the Horizon Shares on the Settlement Date, the Horizon Shares will
be duly and validly issued, fully paid and nonassessable, (iii) use its
reasonable best efforts to obtain the Horizon Shareholder Approval as soon
as
practicable after the date hereof and (iv) notify the Holder in writing (or
via
email transmission) promptly after the receipt of the Horizon Shareholder
Approval.
Section
3 Events
of Default.
(a) Either
of the following shall constitute an “Event of Default” under this
Note:
(i) a
decree or order by a court of competent jurisdiction shall have been entered
adjudging the Company bankrupt or insolvent, or approving as properly filed
a
petition seeking reorganization of the Company under any applicable law; or
a
decree or order of a court of competent jurisdiction shall have been entered
appointing a receiver, liquidator, sequestrator, trustee or assignee (or other
similar official) in bankruptcy or insolvency of the Company or all or a major
part of its property, or for the winding-up or liquidation of its affairs;
or
2
(ii) the
Company shall institute proceedings under any applicable law to be adjudicated
a
bankrupt, or shall consent to the institution of any such proceedings against
it, or shall file a petition or consent seeking reorganization under any
applicable law, or shall consent to the filing of any such petition, or shall
consent to the appointment of a receiver, liquidator, sequestrator, trustee
or
assignee (or other similar official) in bankruptcy or insolvency of it or all
or
a major part of its property, or shall make an assignment for the benefit of
creditors or shall admit in writing its inability to pay its debts generally
as
they become due or shall take corporate action directed toward any such
action.
(b) Whenever
any Event of Default shall have occurred and be continuing the Holder may
declare, by notice in writing to the Company, the entire unpaid Principal Amount
to be immediately due and payable, and upon any such declaration the same shall
become and shall be immediately due and payable, anything contained in this
Note
to the contrary notwithstanding; and the Holder shall be entitled in its
discretion to proceed to protect and enforce its rights by any lawful
means.
(c) From
and
after the Maturity Date, interest on the Principal Amount shall accrue at the
rate of 10% per annum until such time as the entire Principal Amount and accrued
and unpaid interest has been paid in full. If it shall be found that
any interest payable under this Note shall violate applicable laws governing
usury, the applicable rate of interest due hereunder shall be reduced to the
maximum permitted rate of interest under such laws.
Section
4 Waivers;
No Setoff. The Company hereby waives presentment, demand for
payment, notice of dishonor and protest, and all other notices or demands under
applicable law in connection with the delivery, acceptance, default or
enforcement of this Note. The payment obligations of the Company
under this Note shall not be subject to any set-off, counterclaim, reduction
or
defense which the Company has or may have against the Holder.
Section
5 Costs. If
the Holder initiates legal action to enforce rights hereunder, the Holder shall
be entitled to be reimbursed by the Company for its reasonable attorneys’ fees
and costs related to such enforcement action.
Section
6 Governing
Law. The validity, construction and interpretation of this Note,
and the rights of the Holder and the obligations of the Company hereunder,
shall
be governed by the substantive laws of the State of New York without regard
to
the conflict of law rules thereof.
Section
7 Consent
to Jurisdiction and Service of Process. The Company hereby
irrevocably (a) agrees that any suit, action or other proceeding arising out
of
this Note shall be brought in the United States District Court for the Southern
District of New York or in any courts of the State of New York sitting in the
borough of Manhattan, (b) consents to the jurisdiction of such courts in any
such suit, action or proceeding, (c) waives any objection which it may have
to
the laying of venue of any such suit, action or proceeding in any of such
courts, and (d) agrees that service of process by overnight courier or
registered or certified mail, at the address listed in Section 7.6 of the
Agreement shall be good and sufficient service of process. The
Company hereby irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or related to this Note.
3
Section
8 Notices. All
notices, requests, demands and other communications relating to this Note shall
be in writing, and sufficient if delivered in the manner and to the addresses
set forth in Section 7.6 of the Agreement.
Section
9 Headings. The
section headings herein are for convenience only and shall not affect the
construction hereof.
Section
10 Successors
and Assigns. All covenants and agreements in this Note by the
Company shall bind its successors and assigns.
Section
11 Severability. In
case any provision in this Note shall be invalid, illegal or unenforceable,
the
validity, legality, and enforceability of the remaining provisions shall not
in
any way be affected or impaired thereby.
Section
12 Modification. The
Company may not amend or modify this Note in any manner without the prior
written consent of the Holder.
**
Remainder of Page Intentionally Blank, Signature Page Follows **
4
IN
WITNESS WHEREOF, the Company has
caused this Note to be duly executed as of the day and year above
written.
HORIZON
FUEL CELL TECHNOLOGIES
PTE LTD.
By: Xxxxx
Xxxxxxxxx
Director
By: Xxxxxx
Xx
Director,
Chief Executive Officer
5
