EXECUTION COPY
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REGISTRATION RIGHTS
AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (hereinafter referred to
as the "Agreement"), dated as of the 5th day of April, 2006, is entered into
by and among EEI Acquisition Co., LLC, a Delaware limited liability company
or its wholly owned designated subsidiary ("EEI Co."), Electro Energy Inc., a
Florida corporation (the "Company") and Lithium Nickel Asset Holding Company
I, Inc., a Delaware corporation ("LNAH").
W I T N E S S E T H:
WHEREAS, EEI Co. desires to purchase and LNAH desires to sell certain
assets (the "Assets") of LNAH (the "Acquisition") pursuant to an Asset Purchase
Agreement by and among EEI Co., the Company and LNAH, dated of even date
herewith (the "Asset Purchase Agreement") in consideration of the Purchase Price
(as defined in the Asset Purchase Agreement) and on the terms and conditions set
forth therein and in certain ancillary agreements referenced in the Asset
Purchase Agreement.
WHEREAS, pursuant to the Asset Purchase Agreement, upon the closing of
the Acquisition , the Company shall issue to LNAH, inter alia: (i) Five Million
Seven Hundred Fifty Thousand (5,750,000) unregistered shares (the "Stock
Consideration") of its common stock, par value $.001 per share (the "Electro
Energy Common Stock" or "Common Shares"); and (ii) a six-year warrant to
purchase Two Million (2,000,000) unregistered shares of Electro Energy Common
Stock at an exercise price of seven dollars ($7.00) per share, subject to the
vesting schedule set forth therein (the "Purchase Warrant"), in each case,
subject to certain terms and conditions set forth in the Asset Purchase
Agreement; and
WHEREAS, in furtherance of the Acquisition, the Company intends to
offer certain debentures (the "Notes") in connection with the Financing, as
defined in the Asset Purchase Agreement (the "Financing");
WHEREAS, the Company plans to file the Financing Registration Statement
(as defined herein) in order to register the Common Shares into which the Notes
may be converted;
WHEREAS, the Company plans to file the Subsequent Registration
Statement (as defined herein); and
WHEREAS, the Company and LNAH desire to make conditional provisions for
the registration of a certain portion of the Stock Consideration.
NOW, THEREFORE, for and in consideration of the premises and of the
mutual covenants, representations, warranties and Agreements herein contained,
the parties hereto agree as follows:
SECTION I
DEFINITIONS
1.1 As used in this Agreement, the following capitalized terms
shall have the following meanings:
"Closing" means the closing of the Acquisition in accordance
with the Asset Purchase Agreement.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Financing Registration" means the registration described in
Section 2.1 hereof.
"Financing Registration Statement" means the "Shelf
Registration Statement" as defined in the Financing Registration Rights
Agreement.
"Financing Registration Rights Agreement" means the
Registration Rights Agreement by and between the Company and the purchasers of
Notes in the Financing.
"GAAP" means generally accepted accounting principles, as in
effect from time to time in the United States, consistently applied
"Initial Registrable Securities" mean Seven Hundred and Fifty
Thousand (750,000) shares of the Stock Consideration, owned by LNAH.
"Person" means a natural person, partnership, Company,
business trust, association, joint venture or other entity or a government or
agency or political subdivision thereof.
"Prospectus" means the prospectus included in either the
Financing Registration Statement or the Subsequent Registration Statement, as
supplemented by any and all prospectus supplements and as amended by any and all
post-effective amendments and including all material incorporated by reference
in such prospectus.
"Securities Act" means the Securities Act of 1933, as from
time to time amended.
"Subsequent Registrable Securities" means Four Hundred
Thousand (400,000) shares of the Stock Consideration owned by LNAH.
"Subsequent Registration Statement" means the registration
statement filed by the Company after the Closing (other than the Financing
Registration Statement) pursuant to which the Subsequent Registrable Securities
shall be covered in accordance with the provisions of this Agreement, including
the Prospectus included in such registration statement, amendments (including
post-effective amendments) and supplements to such registration statement, and
all exhibits to and all material incorporated by reference in such registration
statement.
"Warrant Shares" mean any and all shares of Common Stock
issued or issuable upon exercise of the Purchase Warrant.
SECTION II
REGISTRATION RIGHTS
2.1 Initial Registration Statement.
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(a) In connection with the Financing, the Company is required under
the Financing Registration Rights Agreement to file the Financing Registration
Statement. The Company agrees to include the Initial Registrable Securities in
the Financing Registration Statement to permit the resale of such Initial
Registrable Securities at the same time and in the same manner as the
"Conversion Shares" (as defined in the Financing Registration Statement) are
registered under the Financing Registration Statement.
(b) The Company agrees that it shall not amend the Financing
Registration Statement in any way that would impair the rights of LNAH under
this Agreement to a greater extent than the rights of the other selling
stockholders under the Financing Registration Statement would be impaired.
2.2 Subsequent Registration Statement.
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(a) FILING OF SUBSEQUENT REGISTRATION STATEMENT. If, at any time
after Closing, the Company proposes to file a registration statement under the
Securities Act with respect to an offering for its own account of any class of
its equity securities (other than a registration statement on Form S-8 (or any
successor form) or any other registration statement relating solely to employee
benefit plans or filed in connection with an exchange offer, a transaction to
which Rule 145 (or any successor provision) under the Securities Act applies or
an offering of securities solely to the Company's existing shareholders), then
the Company shall give written notice of such proposed filing to LNAH as soon as
practicable (but no later than 30 days) before the anticipated filing date (the
"Subsequent Registration Notice") via facsimile and/or express overnight mail,
and such Subsequent Registration Notice shall permit LNAH to register up to the
entire amount of the Subsequent Registrable Securities (and any Excluded
Registrable Securities).
(b) If the Subsequent Registration Notice is sent by the Company
prior to the first anniversary of the Closing, the Subsequent Registrable
Securities shall be included in such offering, subject to the terms and
conditions set forth in 2.2(d), and LNAH shall forfeit and tender to the Company
Five Hundred Thousand (500,000) Purchase Warrants, exercisable for Five Hundred
Thousand (500,000) Warrant Shares (the "Forfeited Warrants"). The Forfeited
Warrants shall be cancelled by the Company, and LNAH shall have no further
rights to any inherent value in such Forfeited Warrants or the underlying
corresponding Warrant Shares.
(c) If the Subsequent Registration Notice is sent by the Company
after the first anniversary of the Closing, LNAH shall have the option to elect
whether such Subsequent Registrable Securities are to be included in the
Subsequent Registration, subject to the terms and conditions in this Section
2.2(c).
(i) If LNAH wishes to not have the Subsequent Registrable
Securities included in the Subsequent Registration Statement, LNAH shall advise
the Company in writing within 10 business days after the date on which the
Subsequent Registration Notice is sent.
(ii) If LNAH fails to provide timely notice of its intent to
not be included in the Subsequent Registration Statement, the Company shall
include the Subsequent Registrable Securities included in the Subsequent
Registration Statement, and LNAH shall forfeit and tender to the Company the
Forfeited Warrants, which shall be cancelled by the Company and LNAH shall have
no further rights to any inherent value in such Forfeited Warrants or the
corresponding underlying Warrant Shares.
(d) If, in accordance with this Section 2.2, the Subsequent
Registrable Securities (and any Excluded Registrable Securities) are to be
included in the Subsequent Registration, then:
(i) If the Company's offering is to be an underwritten
offering, the Company shall, subject to the further provisions of this
Agreement, use its reasonable best efforts to cause the managing underwriter or
underwriters to permit LNAH to be included in the registration for such offering
to include such Subsequent Registrable Securities (and any Excluded Registrable
Securities) in such offering on the same terms and conditions as any similar
securities of the Company included therein.
(ii) The right of LNAH to registration pursuant to this
Section 2.2 in connection with an offering by the Company shall unless the
Company otherwise assents, be conditioned upon LNAH's participation as a seller
in such offering and its execution of an underwriting agreement, if applicable,
with the managing underwriter or underwriters selected by the Company.
Notwithstanding the foregoing, if the managing underwriter or underwriters (if
any) of such offering deliver a written opinion to the Company that either
because of (a) the kind of securities that the Company, LNAH and any other
persons or entities intend to include in such offering or (b) the size of the
offering that the Company, LNAH and any other persons or entities intend to
make, the success of the offering would be materially and adversely affected by
inclusion of the Subsequent Registrable Securities (and any Excluded Registrable
Securities) requested to be included, then (i) in the event that the size of the
offering is the basis of such managing underwriter's opinion, the number of
shares of Subsequent Registrable Securities (and the Initial Registrable
Securities in the event such securities were excluded from the Initial
Registration in accordance with Section 2.1) to be registered and offered for
the account of LNAH shall be reduced to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount recommended
by such managing underwriter or underwriters and (ii) in the event that the
combination of securities to be offered is the basis of such managing
underwriters opinion, (x) the Subsequent Registrable Securities (and any
Excluded Registrable Securities) to be included in such registration and
offering shall be reduced as described in clause (i) above or (y) if such
actions would, in the reasonable judgment of the managing underwriter, be
insufficient to substantially eliminate the adverse effect that inclusion of the
Subsequent Registrable Securities (and any Excluded Registrable Securities)
requested to be included would have on such offering, such Subsequent
Registrable Securities (and any Excluded Registrable Securities) will be
excluded entirely from such registration and offering.
(iii) Any Subsequent Registrable Securities (and any Excluded
Registrable Securities) excluded from an underwriting shall, if applicable, be
withdrawn from registration and shall not, without the consent of the Company,
be transferred in a public distribution prior to the earlier of ninety (90) days
(or such other shorter period of time as the managing underwriter may require)
after the effective date of the registration statement or ninety (90) days after
the date LNAH is notified of such exclusion.
SECTION III
REGISTRATION PROCEDURES
3.1 PROCEDURE. Whenever LNAH has agreed pursuant to Section 2.2 that
any Subsequent Registrable Securities be registered, the Company shall, subject
to the provisions of Section 4.3 hereof, use its reasonable best efforts to
effect the registration and the sale or distribution of such Initial Registrable
Securities or Subsequent Registrable Securities, as applicable, in accordance
with the intended method of disposition thereof as promptly as practicable, and
in connection with any such request, the Company shall:
(a) prepare and file with the Securities and Exchange Commission, a
registration statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and which form shall be
available for the sale or distribution of the Subsequent Registrable Securities,
as applicable, in accordance with the intended method of distribution thereof,
and use its reasonable best efforts to cause such registration statement to
become effective; provided that, (i) before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish to
one counsel selected by LNAH copies of all such documents proposed to be filed
and (ii) after the filing of the registration statement, the Company shall
promptly notify LNAH of any stop order issued or, to the knowledge of the
Company, threatened by the Securities and Exchange Commission and take all
reasonable actions to prevent the entry of such stop order or to remove it if
entered;
(b) comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by LNAH
thereof set forth in such registration statement;
(c) as soon as reasonably practicable, furnish to LNAH, prior to
filing a registration statement, copies of such registration statement as
proposed to be filed and thereafter furnish to LNAH such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration Statement (including each preliminary
prospectus) and such other documents as LNAH may reasonably request in order to
facilitate the disposition of the Subsequent Registrable Securities, as
applicable, owned by LNAH;
(d) promptly notify LNAH, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the occurrence
of any event known to the Company requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
or recipients of such Subsequent Registrable Securities, as applicable, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly make available to LNAH any such
supplement or amendment;
(e) enter into an underwriting agreement in customary form, the form
and substance of such underwriting agreement at the sole discretion of the
Company;
(f) make available for inspection by LNAH, any underwriter
participating in any sale or distribution pursuant to such registration
statement and any attorney, accountant or other agent retained by LNAH or
underwriter (collectively, the "Inspectors") all material financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers
and employees to supply all information reasonably requested for such purpose by
any such Inspector in connection with such registration statement; provided that
the Company shall have no obligation to permit such access to the Records or its
officers or employees in a manner that would unreasonably disrupt the normal
conduct of its business operations or create an undue burden on the Company.
LNAH and Inspector that actually reviews Records supplied by the Company that
include information that the Company identifies, in good faith, as being
confidential or proprietary ("Confidential Information") shall be required at
the Company's option, prior to any such review, to execute an agreement with the
Company providing that such Inspector shall not publicly disclose any
Confidential Information unless such disclosure is required by applicable law or
legal process and shall not use such information for any purpose other than the
limited purpose contemplated by this subsection (f). LNAH and Inspector shall be
required further to agree that it shall, upon learning that disclosure of
Confidential Information is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Confidential Information;
(g) in the event such sale is pursuant to an underwritten offering,
use its reasonable best efforts to obtain a comfort letter or letters from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters as the managing
underwriter reasonably requests; and
(h) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission and
make available to its security holders, as soon as reasonably practicable, an
earnings statement complying with the provisions of Section 11(a) of the
Securities Act (including, at the option of the Company, pursuant to Rule 158
(or any successor provision) under the Securities Act).
Upon receipt of any notice from the Company of the occurrence of any event of
the kind described in subsection (d) hereof, LNAH shall forthwith discontinue
all offerings, sales and other dispositions of Initial Registrable Securities or
Subsequent Registrable Securities, as applicable, pursuant to the registration
statement covering the Initial Registrable Securities or Subsequent Registrable
Securities, as applicable, until LNAH's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (d) hereof.
SECTION IV
CONDITIONS AND LIMITATIONS.
4.1 The Company's obligations under this Agreement shall be subject to
and limited by: (i) LNAH having complied with the terms of this Agreement; (ii)
any limitations and conditions as set forth in the Financing Registration Rights
Agreement; and (iii) any limitations and conditions as set forth in any future
agreements as required by any applicable underwriters.
4.2 The Company's obligation under this Agreement shall be subject to
the limitations and conditions specified herein, and to the condition that the
Company may at any time terminate its proposal to register equity securities for
its own account and discontinue its efforts to cause a registration statement to
become or remain effective as to any and all shares of Subsequent Registrable
Securities that would otherwise have been eligible for inclusion in such
registration.
SECTION V
CERTAIN COVENANTS OF LNAH
5.1 Notices and requests delivered to the Company by LNAH shall contain
such information regarding the Initial Registrable Securities or Subsequent
Registrable Securities, as applicable, to be so registered, the intended method
of disposition of such Initial Registrable Securities or Subsequent Registrable
Securities, as applicable, as shall reasonably be required in connection with
the actions contemplated to be taken pursuant to this Agreement. If any Initial
Registrable Securities or Subsequent Registrable Securities, as applicable, are
included in a registration statement pursuant to this Agreement, LNAH shall
execute all consents, powers of attorney, registration statements and other
documents reasonably required to be executed by it in order to cause such
registration statement to become effective. LNAH covenants that, in disposing of
its shares, LNAH will comply with Rules 10b-2, 10b-5, 10b-6 and 10b-7 (or any
successor provisions) under the Exchange Act and all other requirements of
applicable law.
SECTION VI
REGISTRATION EXPENSES
6.1 All Registration Expenses (as defined herein) will be borne by the
Company. Underwriting discounts and commissions applicable to the sale of the
Subsequent Registrable Securities, as applicable, shall be borne by LNAH, and
LNAH shall be responsible for the fees and expenses of any legal counsel,
accountants or other agents retained by LNAH and all other out-of-pocket
expenses incurred by LNAH in connection with any registration under this
Agreement.
6.2 As used herein, the term Registration Expenses means all expenses
incident to the Company's performance of or compliance with this Agreement,
including without limitation all registration and filing fees, fees and expenses
of compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Initial Registrable Securities or Subsequent Registrable Securities, as
applicable), rating agency fees, printing expenses, the fees and expenses
incurred in connection with the listing or admission for quotation of the
securities to be registered an any securities exchange or quotation system and
fees and disbursements of counsel for the Company and its independent certified
public accountants (including the expenses of any special audit or comfort
letters required by or incident to such performance), securities act liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special expert retained by the Company in connection with
such registration and the fees and expenses of other persons retained by the
Company.
SECTION VII
INDEMNIFICATION; CONTRIBUTION
7.1 Indemnification by the Company. In connection with any offering of
Initial Registrable Securities or Subsequent Registrable Securities, as
applicable, pursuant to this Agreement, the Company shall indemnify and hold
harmless LNAH, its officers, directors and agents and each person, if any, who
controls LNAH within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable fees and disbursements
of counsel) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to Initial Registrable Securities or Subsequent Registrable
Securities, as applicable, or in any amendment or supplement thereto or in any
preliminary prospectus relating to Initial Registrable Securities or Subsequent
Registrable Securities, as applicable, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, except insofar as such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished to the Company by LNAH or on
LNAH's behalf expressly for use therein. In connection with any underwritten
offering of Initial Registrable Securities or Subsequent Registrable Securities,
as applicable, registered pursuant to this Agreement, the Company shall cause to
be included in any underwriting agreement with the underwriters of such offering
provisions indemnifying and providing for contribution to such underwriters and
their officers and directors and each person who controls such underwriters on
substantially the same basis as the provisions of this Section 7.1 indemnifying
and providing for contribution to LNAH.
7.2 Indemnification by LNAH. In connection with any offering of Initial
Registrable Securities or Subsequent Registrable Securities, as applicable,
pursuant to this Agreement, LNAH shall indemnify and hold harmless the Company,
its officers, directors and agents and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, and, in accordance with industry practice, in the case
of an offering of Initial Registrable Securities or Subsequent Registrable
Securities, as applicable, pursuant to this Agreement, each underwriter of such
Initial Registrable Securities or Subsequent Registrable Securities, as
applicable, if requested by such underwriter, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable fees and
disbursements of counsel) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to Initial Registrable Securities or Subsequent
Registrable Securities, as applicable, or in any amendment or supplement thereto
or in any preliminary prospectus relating to Initial Registrable Securities or
Subsequent Registrable Securities, as applicable, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made, provided that such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished in writing to the Company by
LNAH or on LNAH's behalf expressly for use therein. In connection with any
underwritten offering of Initial Registrable Securities or Subsequent
Registrable Securities, as applicable, registered pursuant to this Agreement,
LNAH shall cause to be included in any underwriting agreement with the
underwriters of such offering provisions indemnifying and providing for
contribution to such underwriters, their officers and directors and each person
who controls such underwriters on substantially the same basis as the provisions
of this Section 7.2 indemnifying and providing for contribution to the Company.
7.3 Conduct of Indemnification Proceedings. If any action or proceeding
(including any governmental investigation) shall be brought or asserted against
any indemnified party hereunder in respect of which indemnity may be sought from
an indemnifying party hereunder, such indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such indemnified party, and shall assume the payment of all expenses. Such
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses, (ii) the
indemnifying party shall have failed to assume the defense of such action or
proceeding and employ counsel reasonably satisfactory to such indemnified party,
or (iii) the named parties to any such action or proceeding (including any
impleaded parties) include both such indemnified party and such indemnifying
party, and such indemnified party shall have been advised by counsel that there
may be one or more legal defenses available to such indemnified party which are
different from or additional to those available to the indemnifying party (in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of such indemnified party; it being
understood, however, that the indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for such indemnified party, which firm shall be designated
in writing by such indemnified party and reasonably satisfactory to the
indemnifying party). The indemnifying party shall not be liable for any
settlement of any such action or proceeding erected without its written consent,
but if settled with its written consent, or if there is a final judgment for the
plaintiff in any such action or proceeding, the indemnifying party shall
indemnify and hold harmless the indemnified party from and against any loss or
liability (to the extent stated above) by reason of such settlement or judgment.
7.4 Contribution. If the indemnification provided for in this Section 7
is unavailable to the Company or LNAH in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each such indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments in such proportion as is appropriate to
reflect the relative fault of each such party in connection with such statements
or omissions or alleged statements or omissions, as well as any other relevant
equitable considerations. The relative fault of each such party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and LNAH agrees that it would
not be just and equitable if contribution pursuant to this Section 7.4 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding sentences.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding sentences shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claims.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation.
SECTION VIII
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
8.1 Existence and Rights. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the state of Florida.
The Company has all requisite corporate power and authority, to carry on its
business and to own and use the properties owned and used by it. True and
correct copies of the Company's Articles of Incorporation and Bylaws, as amended
to date, have been delivered to LNAH. The Company is qualified to conduct
business and is in good standing under the laws of each jurisdiction wherein the
nature of its business or its ownership of property requires it to be so
qualified, except where the failure to be so qualified, would not individually
or in the aggregate, have a material adverse effect on the assets or business of
the Company.
8.2 Corporate Authorization. The Company has all necessary power and
authority to enter into this Agreement and has taken all action, specifically
including, without limitation, all corporate action, necessary to execute,
deliver and perform this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and is a legally valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
8.3 No Conflict. The execution, delivery and performance of this
Agreement and of the related documents by the Company will not violate any
provision of the Company's Articles of Incorporation or the Bylaws; or violate
any law or rule or regulation of any administrative agency or governmental body;
or any order, writ, injunction or decree of any court, arbiter, administrative
agency or governmental authority having jurisdiction over the Company; or
violate any indenture, mortgage, contract, will, agreement or other undertaking
to which the Company is a party or is subject, or result in the creation or
imposition of any lien or encumbrance on any of the properties of the Company
under any of the foregoing.
8.4 Litigation. There is no litigation, proceeding, dispute, tax audit
or other governmental investigation pending, or to the best of the Company's
knowledge, threatened against, or affecting the Company's business or its assets
before any court or governmental agency or other body, which would adversely
affect the financial condition of the Company, its assets, or the conduct of the
Company's business, or which may impede the transaction contemplated herein.
There are no outstanding and unpaid judgments, tax deficiencies, statements, or
notices of assessments or other demands for payment of taxes served on or filed
against the Company. The Company is not in default with respect to an order,
writ, injunction, decree or demand of any court or other governmental or
regulatory authority.
8.5 Financing Registration Statement. The existence of this Agreement,
including the fact that the Initial Registrable Securities will be included in
the Financing Registration Statement and will be registered at the same time and
in the same manner as the Conversion Shares will be registered pursuant to such
agreement, have been disclosed by the Company to the purchasers of Notes in the
Financing.
SECTION IX
MISCELLANEOUS
9.1 Notices. Any notice or other communication required or permitted
hereunder shall be deemed given if in writing and delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally or sent by overnight air courier or facsimile
transmission or, if mailed, two days after the date of deposit in the United
States mails, as follows:
if to EEI Co. or the Company, to:
Electro Energy Inc.
00 Xxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx, Chairman and CEO
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Lev & Berlin, P.C.
000 Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
if to LNAH, to:
Lithium Nickel Asset Holding Company I, Inc.
0 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxxxx, XX 00000
Attention: Mr. Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Topspin Partners, L.P.
Three Expressway Plaza
Xxxxxx Heights, NY 11577
Attention: Xx. Xxx X. Xxxxxxx, Chairman & CEO
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxxx Ball Xxxxxx Xxxxxx & Xxxxxxxxxx, LLP
000 Xxx Xxxxxxx Xx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Any party may be given notice in accordance with this Section by any other party
at another address or person for receipt of notices, if such party so designates
such other person or address in writing in accordance with this Section 9,
paragraph 9.1.
9.2 Partial Invalidity. Each part of this Agreement is intended to be
separate. If any term, covenant, condition or provision hereof is illegal or
invalid or unenforceable for any reason whatsoever, such illegality, invalidity
or unenforceability shall not affect the legality, validity or enforceability of
the remaining parts of this Agreement and all such remaining parts hereto shall
not be impaired or invalidated in any way, but shall be legal, valid and
enforceable and have full force and effect as if the illegal, invalid,
unenforceable part has not been included.
9.3 Law Governing Agreement. This Agreement shall be interpreted,
construed and enforced and its construction and performance shall be governed by
the laws of the State of Connecticut, without giving effect to that state's
principles of conflicts of law.
9.4 Specific Performance. The Company acknowledges and agrees that in
the event of any breach of this Agreement, LNAH would be irreparably harmed and
could not be made whole by monetary damages. It is accordingly agreed that the
Company will waive the defense in any action for specific performance that a
remedy at law would be adequate and that LNAH, in addition to any other remedy
to which they may be entitled at law or in equity, shall be entitled to compel
specific performance of this Agreement.
9.5 Entire Agreement. This Agreement constitutes the entire
understanding and Agreement of the parties hereto, and supersedes any and all
prior understandings or other Agreements, either oral or in writing, if any,
among such parties with respect to the subject matter hereof and contains all of
the covenants and Agreements between the parties with respect thereto. Each
party to this Agreement acknowledges that no representations, inducements, or
Agreements, oral or otherwise, have been made by such party, or anyone acting on
behalf of such party, which are not embodied herein, and no other Agreement,
statement or promise not contained in this Agreement shall be valid or binding.
The parties hereto have had an opportunity to consult with their respective
attorneys concerning the meaning and the import of this Agreement and each has
read this Agreement, as signified by their signatures below, and is executing
the same for the purposes and consideration herein expressed.
9.6 Waivers. No delay on the part of any party in exercising any right,
power, or privilege hereunder shall operate as a waiver thereof. Nor shall any
waiver on the part of any party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies of any party based upon, arising out of or
otherwise in respect of any inaccuracy in or breach by any other party of any
representation, warranty, covenant or Agreement contained in this Agreement
shall in no way be limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such inaccuracy or breach is
based may also be the subject matter of any other representation, warranty,
covenant or Agreement contained in this Agreement (or in any other Agreement
between the parties) as to which there is no inaccuracy or breach.
9.7 Tax Consultation. Each Party acknowledges that it has had the
opportunity to and has consulted with their own separate independent accounting
and tax advisors in connection with the accounting and tax treatment for the
transactions contemplated hereby and the tax ramifications thereof. Each Party
shall bear all risk in connection with the accounting and tax treatment of the
transactions contemplated by this Agreement and no Party is relying on the other
Party in connection with the same.
9.8 Variations in Pronouns. Wherever the context shall so require, all
words herein in the male gender shall be deemed to include the female or neuter
gender and vice versa, all singular words shall include the plural, and all
plural words shall include the singular. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
9.9 Headings. The headings used in this Agreement are for
administrative purposes only and do not constitute substantive matter to be
considered in construing the terms and shall not affect the interpretation of
this Agreement. All references herein to Sections, subsections, and clauses,
shall be deemed references to such parts of this Agreement, unless the context
shall otherwise require. A reference to an article or section will mean an
article or section in this Agreement, unless otherwise explicitly set forth. The
titles and headings in this Agreement are for reference purposes only and will
not in any manner limit the construction of this Agreement. For the purposes of
such construction, this Agreement will be considered as a whole. The terms
"including" and "include" as used in this Agreement will be deemed to include
the phrase "without limitation."
9.10 Attorney's Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the substantially
prevailing party shall be entitled to reasonable attorneys' fees, costs, and
necessary disbursements, but only from the offending party, in addition to any
other relief to which it may be entitled.
9.11 Representation by Counsel. Each party acknowledges that it has had
the opportunity to be represented by separate independent counsel in the
negotiation of this Agreement, that any such respective attorneys were of its
own choosing, that each authorized representative has read this Agreement and
that he understands its meaning and legal consequences to each party. Each Party
warrants and represents that he has consulted with his attorney of choice, or
voluntarily chose not to do so, concerning the execution, the meaning and the
import of this Agreement, and has read this Agreement and fully understands the
terms hereof as signified by his signature below, and is executing the same of
his own free will for the purposes and consideration herein expressed. Each
Party warrants and represents that he has had sufficient time to consider
whether to enter into this Agreement and that he is relying solely on his own
judgment and the advice of his own counsel, if any, in deciding to execute this
Agreement. Each Party warrants and represents that he has read this Agreement in
its entirety and has consulted with his attorney, if any concerning the
execution of this Agreement. If any or all Parties have chosen not to seek
counsel, said party or parties hereby acknowledge that he or they refrained from
seeking counsel entirely of his or their own volition and with full knowledge of
the consequences of such a decision.
9.12 Presumption Against Scrivener. Each party waives the
presumption that this Agreement is presumed to be in favor of the party which
did not prepare it, in case of a dispute as to interpretation.
9.13 Further Assurances. At any time and from time to time after the
date hereof, at the request of any Party, and without further consideration,
every other party will execute and deliver such other and further instruments
and documents, and take such other action as the other Party may reasonably deem
necessary, convenient or desirable in order to more effectively assist any Party
in exercising all rights with respect thereto, and carrying out the business,
duties, and obligations created by this Agreement.
9.14 Amendments. This Agreement may not be modified, amended,
superceded, cancelled, renewed or extended, except in writing, signed by the
party or parties to be bound thereby or signed by their respective attorneys.
9.15 Binding Effect and Assignment. This Agreement and the terms,
covenants, conditions, provisions, obligations, undertakings, rights and
benefits hereof, shall be binding upon, and shall inure to the benefit of, the
undersigned parties and their respective heirs, executors, administrators,
representatives, officers, directors, Company, successors, agents, servants,
employees, attorneys, and assigns. This Agreement and any rights hereunder are
assignable by LNAH to the extent that LNAH has assigned or sold any Warrant or
portion thereof with the prior written consent of the Company. This Agreement
shall inure to the benefit of and bind the Parties hereto and their respective
legal representatives, successors, and permitted assigns.
9.16 Counterparts. This Agreement may be executed in several
counterparts by one or more of the undersigned and all such counterparts so
executed shall together be deemed and constitute one final Agreement, as if one
document had been signed by all parties hereto; and each such counterpart shall
be deemed an original, binding the parties subscribed hereto and multiple
signature pages affixed to a single copy of this Agreement shall be deemed to be
a fully executed original Agreement. Several counterparts consisting of multiple
copies hereof each signed by less than all parties, but together signed by all
parties shall constitute and be deemed a fully executed original Agreement.
[remainder of page intentionally left blank; signature pages follow]
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first set forth hereinabove, as evidenced by their respective signatures
below.
EEI ACQUISITION CO., LLC
By: Electro Energy, Inc., its
Managing Member
By:/s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
Hereunto Duly Authorized
LITHIUM NICKEL ASSET HOLDING
COMPANY I, INC.
By:/s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Chairman
Hereunto Duly Authorized
ELECTRO ENERGY INC.
By:/s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
Hereunto Duly Authorized
[signature page to Registration Rights Agreement]
